Law: Income Tax Act, 1922

Section: 22(1) (2), (3), (4), 23(4)

Income-tax-Best judgment assessment-Notice to produce documents under S. 22(4) after submission of return under S. 22(3)- Non-compliance-Best judgment assessment-Validity of notice and best judgment assessment- Indian Income-tax Act, 1922, Ss. 22(1)? (2), (3), (4) & 23(4). Inasmuch as subsection (4) of section 22 refers to sub sections (1) and (2) alone of the said section 22 and omits subsection (3) thereof, a notice under subsection (4) of section 22 for production of documents cannot be validly issued where an assessee has submitted a voluntary return under subsection (3) ; and a best judgment assessment cannot be validly made under section 23(4) for non-compliance with such notice. Commissioner of Income-tax v. Ranchhoddas Karsondas (1959) 36 I T R 569 (S C) ; Gursahai Saigal v. Commissioner of Income tax (1963) 48 I T R 1 (S C) ; Kandaswami (R. P.) v. Commissioner of Income-tax (1963) 49 I T R 344 ; Radhakrishna Rungta v. Seventh Income-tax Officer, C-II Ward, Bombay (1963) 49 I T R 846 and Rama Iyer (P. S.) v. Commissioner of Income-tax (1957) 33 I T R 458 ref. JUDGMENT V. G. OAK, J.-This special appeal arises out of assessment proceedings under the Income-tax Act, 1922 (hereafter referred to as the Act). Messrs Adarsh Construction Company is a firm consisting of three partners. On October 13, 1961, the firm furnished a statement under subsection (3) of section 22 of the Act with respect to income for the assessment years 1959-60 and 1960-61. The same day the Income-tax Officer issued a notice to the firm under subsection (4) of section 22 of the Act for filing certain documents. The Income-tax Officer was informed that the firm was not in a position to file all the documents mentioned in the notice wader section 22 (4). The Income-tax Officer took up the position that the firm had failed to comply with the notice served upon it under section 22(4). On November 30, 1961, an assessment order was passed under section 23(4) of the Act on the footing that the firm had failed to comply with the notice under section 22(4) of the Act. A notice of demand was also issued on that basis. The firm filed in this Court a writ petition challenging the assessment…