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TMI Blog1969 (2) TMI 58X X X X Extracts X X X X X X X X Extracts X X X X ..... e Indian Income-tax Act, 1922. On May 9, 1962, an application was made under section 27 of the said Act before the Income-tax Officer requiring the Income-tax Officer to reopen the assessment made under section 23(4) and to make a fresh assessment on the ground that the assessee was prevented by sufficient cause from complying with the notices under sections 22(2) and 22(4) of the Indian Income-tax Act, 1922. It was admitted in the said petition under section 27 of the Indian Income-tax Act, 1922, that the notice under section 22(2) was served long ago, but it was stated that owing to the alleged illness of the accountant and various other domestic troubles the assessee could not comply with the said notice. It was, thereafter, stated in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on March 15, 1962, it was quite possible that the notice on the firm was also for March 15, 1962, by making the alterations in the assessee's copy of the notice, but through inadvertence no entry to that effect was made in the records of this case. In those circumstances, the Appellate Assistant Commissioner was of the opinion that the assessee did not have reasonable opportunity of complying with the notice under section 22(4) of the Indian Income-tax Act, 1922. The Appellate Assistant Commissioner, however, did not refer to or deal with the question whether there has been failure or non-compliance by the assessee with the notice under section 22(2) of the Indian Income-tax Act, 1922. The Appellate Assistant Commissioner allowed the appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2(2) of the Indian Income-tax Act, 1922, provides : "In the case of any person whose total income is, in the Income-tax Officer's opinion, of such an amount as to render such person liable to income-tax, the Income-tax Officer may serve a notice upon him requiring him to furnish, within such period, not being less than 30 days, as may be specified in the notice, a return in the prescribed form and verified in the prescribed manner setting forth (along with such other particulars as may be provided for in the notice) his total income and total world income during the previous year : Provided that the Income-tax Officer may in his discretion extend the date for the delivery of the return." Sub-section (3) of section 22 is in the following ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Income-tax Officer is authorised to proceed to make an assessment under section 23(4) of the Indian Income-tax Act, 1922. In the Bench decision of the Allahabad High Court in the case of Behari Lal Chatterji v. Commissioner of Income-tax, it was held that an assessment to the best of judgment can be made under section 23(4) of the Income-tax Act, if there is a failure to make a return under sections 22(1) and 22(2). It is not necessary for applying section 23(4) that there should be a non-compliance with a notice under section 22(4) of the Indian Income-tax Act, 1922. In the case of Commissioner of Income-tax v. Ranchhoddas Karsondas , the Supreme Court, explaining the scheme of the section, observed as follows : "It will be seen from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (3) of the Indian Income-tax Act, 1922. The expression "default" as mentioned in Stroud's Judicial Dictionary, page 757, volume I, is a French word. The word "defelta" is legally taken for non-appearance in court. It is a relative term and its connotation naturally depends upon the context. In the context of the scheme in which the expression has been used in this case, we are of the opinion that it has been used in the sense as a failure to perform an obligation, statutory or contractual. Mere inaction in not taking the benefit of a privilege is not a default in the context of the scheme of the section. Section 22(3) of the Indian Income-tax Act, 1922, does not impose any obligation upon the assessee. It affords an additional opportunity a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th notice under section 22(2) of the Indian Income-tax Act, 1922, that is to say, there has been default under section 22(2) of the Act. If that is the position, then the Income-tax Officer was justified in proceeding to make the assessment under section 23(4) of the Indian Income-tax Act, 1922. Inasmuch as there was no obligation imposed upon the assessee by section 22(3) of the Indian Income-tax Act, 1922, there is no question of any default of compliance with section 22(3) of the Indian Income-tax Act, 1922. Therefore, there is no question of the assessee being prevented by sufficient cause in not complying with the requirement of section 22(3) of the Indian Income-tax Act, 1922. In that view of the matter, we are of the opinion that th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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