Law: Income Tax Act, 1922

Section: 22(2),23(1),23(3)28(1)

Income tax Act (XI of 1922)----S. 22 (2) Return Not correct or complete, giving income merely approximately Income¬ tax Officer could accept return as valid and proceed to assess under S. 23 (1) or 23 (3) Appeal against assessment Penalty imposed under S. 28 (1) Validity Income tax Act (XI of 1922), S. 23 (3) & 28 (1) : A I R 1945 Pesh. 18 affirmed. JUDGMENT LORD SIMONDS. The substantial question raised in this appeal which is brought from the judgment of the Court of the Judicial Commissioner, North West Frontier Province, is whether an order of the Appellate Assistant Commissioner, Rawalpindi Range, of 18th January 1942, imposing on the appellant a penalty of Rs. 14,000 under section 28, income tax Act 1922, as amended upto the relevant date, is a valid order. The question arises in this way. The appellant during the years 1937 and 1938 carried on business as a supply contractor at Bannu in the North West Frontier Province, supplying livestock, wood and vegetables to the military units stationed in Waziristan. On 13th April 1938 a notice was sent to him under section 22 (2) of the Act requiring him to furnish on or before 13th May 1938, a return for the year 1938 199 of his income for the previous year 1937 38. He did not do so. After two attempts to serve him with notice under section 22 (4) of the Act to produce accounts or documents had failed, he was served with such a notice returnable on 18th October 1938. On the same day he appeared before the Income tax Officer and produced a return made out on the usual form. This return showed no income except against Item 5, which is headed "Business, trade, commerce, manufacture, or dealing in property, shares or securities (details as in Note 5)". Against this item was an entry of Rs. 10,000, which sum was also entered as the total income of the appellant. The declaration in the return was duly signed by the appellant. The details in Note 5 were not given, a matter which in these proceedings has assumed great importance. On the same day the appellant made a statement to the Income tax Officer in the Vernacular which he duly recorded. This statement according to the translation recorded in the judgment of the…

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