TMI Blog1970 (2) TMI 101X X X X Extracts X X X X X X X X Extracts X X X X ..... to this reference are clearly stated in the reference order. The quarter in respect of which the assessment has been made relates to the quarter ending with 31st December, 1958. The dealer is a wholesaler in grocery articles. He returned a profit at a rate of 4 per cent. in his account books. The assessing officer is of opinion that the normal profit in the locality in such business would be between 8 per cent. to 12 per cent. He accordingly estimated the rate of profit at 8 per cent. and enhanced the returned figures. The first appellate authority estimated the rate of profit at 6 per cent. The Tribunal upheld the order of the Assistant Commissioner. The Tribunal held that big dealers could usually maintain their accounts perfectly and ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... guess which is not subjected to explanation given by the assessee. The principle was very clearly laid down in Dhakeswari Cotton Mills Ltd. v. Commissioner of Income-tax, West BengalA.I.R. 1955 S.C. 65; 26 I.T.R. 775., in an income-tax case and the identical principles were followed in a sales tax case in Raghubar Mandal Harihar Mandal v. The State of Bihar. 4.. As a necessary corollary of the aforesaid principle the assessing authority cannot declare the account books to have not been properly maintained on the basis of information not supplied to the assessee. In this case the Tribunal came to the conclusion that account books were correctly maintained. He, however, did not act upon the account books on the basis of an information obta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... own. They are: (i) The taxing officer is not bound to rely on evidence produced by the assessee which he considers to be false. (ii) If he proposes to make an estimate in disregard of the evidence, oral or documentary, led by the assessee, he should in fairness disclose to the assessee the materials on which he is going to found that estimate. (iii) He is not, however, debarred from relying on private sources of information, which sources he may not disclose to the assessee at all. (iv) In case he proposes to use against the assessee the result of any private enquiries made by him, he must communicate to the assessee the substance of the information so proposed to be utilised to such extent as to put the assessee in possession of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithin its sweep the right of cross-examination. A number of decisions have been cited before us. It is unnecessary to examine all of them. Jayantilal Thakordas v. State of Gujarat[1969] 23 S.T.C. 11. is a Bench decision of the Gujarat High Court which takes a view in support of the revenue. For reasons discussed we are unable to accept this decision as laying down good law. If critically examined, it runs counter to the pronouncement of the Supreme Court in Raghubar Mandal's case[1957] 8 S.T.C. 770., though it has been referred to in that decision. It differed from Appukutty v. State of Kerala[1963] 14 S.T.C. 489., a Single Judge decision of the Kerala High Court, which according to us lays down the correct principle. In paragraph 8, his Lo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amination. The procedure for assessment is indicated in section 23(3) of the Act. The Income-tax Officer is not a court. Having regard to the nature of the proceedings, he occupies the position of a quasi-judicial tribunal. He is not bound by the rules of evidence in the Indian Evidence Act. The limit of the enquiry and the kind of materials or evidence which he can act upon cannot be specified and the statute has not attempted it. Wide though his powers be, he must act in consonance with rules of natural justice. One such rule is that he shall not use any material against the assessee without giving him an opportunity to meet it. The source of information for the material against the assessee need not be divulged. In fairness to the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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