TMI Blog1970 (7) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... t 2007 (S.Y.), a cash deposit of Rs. 17,000 was found in the books of the assessee on September 10, 1949. The amount was credited to the account of one Abdul Sattar Abdul Ghani. The amount was withdrawn on October 11, 1949. The Income-tax Officer, in the course of his assessment of the assessee-firm for the year 1950-51, noticed this deposit and asked the assessee to explain the nature and source thereof. The assessee's explanation was that Abdul Sattar and his son, Mohammad Ismail, were carrying on business at Moolganj in Kanpur. Mohammad Ismail was well known to the partners of the assessee-firm. When Mohammad Ismail was going home in Kutch he deposited the sum of Rs. 17,000 with the assessee-firm and he took back the amount on his return ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee that he was not given a reasonable opportunity and facility to produce evidence in support of its explanation is justified. In this case a notice under section 23(2) of the Act was issued to the assessee. In reply to this notice the assessee submitted its explanation to the Income-tax Officer on October 22, 1954, by means of a letter. In paragraph 5 of this letter the assessee stated as follows : " Deposit of Rs. 17,000 in the account of M/s. Abdul Sattar Abdul Ghani. Mohammed Ismail, son of Abdul Sattar, was formerly working in M/s. Habib Moosa who was very well known to us. He and his father, Abdul Sattar, were carrying on business in Moolganj, Kanpur. At the time of his going to his home in Kutch he deposited this amount of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be there produced, such evidence on which the assessee might rely in support of the return. In the present case, it is evident that the Income-tax Officer was not satisfied as to the correctness of the return submitted by the assessee under section 22 of the Act. The Income-tax Officer, therefore, served the notice on the assessee to produce or cause to be produced such evidence on which it might rely in support of the return. It is implicit in the terms of section 23(2) of the Act that the Income-tax Officer should give the assessee reasonable time and opportunity to produce evidence. The Income-tax Officer, however, appears to have acted with undue haste. He made no order on the letter of the assessee dated October 22, 1954, and comple ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all for the relevant files and they were produced before it. But, curiously enough, the Tribunal has not said a word about these files either in its appellate order dated August 5, 1957, or in the statement of case submitted by it on August 28, 1962. At any rate, it does not appear that the departmental representative produced the files before the Tribunal to the knowledge of the assessee. In our opinion, the assessee has been materially prejudiced on account of the failure on the part of the Income-tax Officer to call for and examine the evidence which was offered by the assessee to explain the nature and the source of the sum of Rs. 17,000. The assessee has also been prejudiced on account of the fact that, if the assessment files relati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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