Law: Income Tax Act, 1922

Section: 23(4), 27, 34(1)(a).

Income-tax -Reassessment - Notice and best judgment assessment - No application to set aside assessment-Appeal filed-Whether validity of notice can be raised in appeal-Indian Income-tax Act, 1922, Ss. 23(4), 27 & 34(1)(a). In an appeal against an assessment under section 23(4), the validity of the notice under section 34(1)(a) in pursuance of which the assessment was made cannot be raised without resorting to proceedings under section 27. Chhotelal Gobardan Das v. Commissioner of Income-tax (1953) 23 I T R 272 ; Gaurishanker Kedia v. Commissioner of Income-tax (1963) 49 I T R 655 ; Mauladin Ayub Firm v. Commissioner of Income-tax (1959) 35 I T R 449 and Naba Kumar Singh Dudhuria v. Commissioner of Income-tax (1944) 12 1 T R 327 ref. JUDGMENT MEHAR SINGH, C. J.-A notice under section 34(1)(a) of the Indian Income-tax Act, 1922 (Act XI of 1922), was given by the Income-tax Officer to the assessee on having gained knowledge that the assessee had brought a sum of Rs. 40,125 from abroad; the notice having been issued on October 20, 1956. The service of the notice was made by affixation on the outside of the house of the assessee according to the address given in the notice on March 3, 1967. In that notice the assessee was required to file return by April 8, 1957. On May 17, 1957, a further notice was given to the assessee under subsection (4) of section 22 of the Act for production of books and other documents by May 30, 1957. In the meantime, it appears, the assessee had gone to England and on September 6, 1957, the Income-tax Officer wrote a letter to him in regard to the case arising out of the notice under section 34(1)(a) of the Act. The assessee made no return. On March 28, 1958, the Income-tax Officer made an assessment order against the assessee under subsection (4) of section 23 of the Act ; copy of that order is Annexure "A". Against that order the assessee filed an appeal which was accepted by the Appellate Assistant Commissioner of Income-tax on November 4, 1959, on the ground that, according to rule 28 of Order V of the Code of Civil Procedure, substituted service by affixation could only be made after the Court had made a specific order…