TMI Blog1940 (9) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... on has been taken for the first time to-day before us and not even yesterday when the case was opened. The family has an income from property and from money-lending and Benarsi silk business. In response to the notice under Section 22(2) a return was filed by the assessee declaring an income of ₹ 12,758. Notices under Sections 22(4) and 23(2) were then issued and the books were produced on the 25th of August 1937. The Income-tax Officer examined the books and issued another notice under Section 22(4) requiring the assessee to produce all his books of account for the last three years and the assessee was further required by means of a notice under Section 23(3) to give proof on certain specified points. The assessee seems to have gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 47,624. He thought that the Hath Bahis were kept in an exceedingly irregular manner and were not genuine but had been prepared to explain the deposits in the personal account of Gopal Das. Certain other omissions were discovered, more particularly a hand-note for ₹ 900 executed by one Vijai Ram on the 14th of September, 1934, in favour of Lala Ganga Das, a member of the family, did not appear either in the account books or in the Hath Bahis. He says towards the end of his assessment order: In the circumstances I am convinced that the Hath Bahis in question do not reflect the real state of affairs and have been prepared specially for income-tax purposes to help the assessee out of an unenviable situation. That apart from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a case in connection with proceedings under Section 27 of the Act. The learned Commissioner was of the opinion that the assessee was claiming a reference in connection with the order of the Assistant Commissioner dated the 26th of April, 1938, dismissing the appeal of the assessee in connection with the assessment under Section 23(4). We may, however, take it that the assessee wanted a reference to this Court because of the proceedings, original and appellate, in the application under Section 27 of the Act. The questions of law that were formulated in the application to the Commissioner are:- (1) Whether all the proceedings in this case are ab initio void as the notice purported to have been served on the petitioner under sub-section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nection because we have to be satisfied of the correctness of the Commissioner's decision and when the decision is not supported by reasons it is difficult to say whether the decision is correct or not. In spite of the fact that the decision of the Commissioner is faulty in this respect, we have arrived at the result that the circumstances do not warrant our requiring the Commissioner to state a case. The questions that were formulated by the assessee did not directly suggest that the assessee was challenging in any way the decision of the Assistant Commissioner of Income-tax dated the 25th of June 1938 in the proceedings under Section 27 of the Act. The questions directly suggested that the assessment under Section 23(4) was invalid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t cause from making the return required by Section 22. Now in the present case the assessee did submit a return and therefore there is no question of a default in submitting the return and then of that default being explained by sufficient cause. If, however, it can be argued that the notices being illegal the assessee could submit such return as he chose, correct or incorrect, and no further proceedings because of the invalidity of the notices could be started and if started were void, the submission of the counsel for the Department is that there was no real irregularity in the notice. We have seen the notice that was issued to the assessee and in that notice, as in all such notices, the assessee was required to submit a return and fou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... admitted by the assessee that in the assessment year 1936- 37 also there had been an omission. We are, therefore, of the opinion that the first question of law does not arise in the present case. The next question is that a notice under Section 23(2) was essential after the assessee had submitted an application to the Income-tax Officer mentioning certain omissions. It is true that under the provisions of the Act, when an Income-tax Officer is satisfied with a return made under Section 22, he shall assess the total income of the assessee and determine the sum payable by him on the basis of that return but if the Income-tax Officer has reason to believe that the return made under Section 22 was incorrect and incomplete, he shall serve on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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