TMI Blog1993 (8) TMI 314X X X X Extracts X X X X X X X X Extracts X X X X ..... re doing business of chemists and druggists, at ₹ 9,00,000 and applied a flat rate of 25 per cent. to compute the gross profits. The assessees then made an application under Section 27 for setting aside the assessment under Section 23(4). That application was dismissed by the Income-tax Officer. The assessees then preferred two appeals to the Appellate Assistant Commissioner, one against the order of the Income-tax Officer under Section 27 and the other against the quantum of the assessment under Section 23(4). The Appellate Assistant Commissioner dismissed the appeal against the order of the Income-tax Officer under Section 27. With regard to the appeal in respect of the quantum under Section 23(4) he made an order of remand and dire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st a best judgment assessment the Appellate Assistant Commissioner thinks it necessary to have the books of account of the assessees examined, he has the power to do so and his jurisdiction cannot be challenged. On the other hand, it is contended-and with considerable force-that conferring such power upon the Appellate Assistant Commissioner would really be stultifying the whole scheme of the Act and by-passing the provisions of section 27 of the Act. It is pointed out that in this particular case the assessees did not produce the books of account in answer to the notice served upon them under Section 22(4). They made an application under Section 27 to cancel the assessment made under Section 23(4) and to be given an opportunity to produce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udgment. It is true that the further inquiry contemplated by Section 31(2) must be an inquiry for the purposes of disposing of the appeal, and the question in appeal before the Appellate Assistant Commissioner must be whether the judgment of the Income-tax Officer was properly exercised under Section 23(4) and whether the quantum arrived at by the Income-tax Officer was properly and fairly arrived at. But can it be said that under no circumstances is the Appellate Assistant Commissioner permitted to direct the Income-tax Officer to look at the books of account, which books have not been and cannot be produced for the purpose of the ordinary assessment? We fully appreciate the point of view put forward on behalf of the Department that the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he point of view of its practical application. In this particular case with which we are dealing, there can be no doubt that the order of the Appellate Assistant Commissioner is entirely erroneous. He points out that the order under Section 27 clearly shows that the default committed by the assessees was clear and complete, and then he expresses the opinion that as the assessees are not habitual defaulters and regret the default which has been committed and give an oral assurance that in future all the notices will be complied with regularly and properly, he wishes to give the assessees one more opportunity to produce their books of account. Therefore, in this particular case the Appellate Assistant Commissioner has not made this order of r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re filed against the order of the Income-tax Officer. One was an order under Section 27 and the other was an order under Section 23(4), and the appeal against the order under Section 27 was dismissed. Then an order for remand was made by the Appellate Assistant Commissioner and the order of remand was to recompute the income on the basis of further inquiry and the Income-tax Officer was asked as well to look into the assessee's accounts. The Income-tax Officer made the inquiry and on the basis of the accounts produced by the assessee he made a further assessment. When the remand report came back to the Appellate Assistant Commissioner, that office was being held by another person and he refused to look at the remand report holding that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the Act. But in this particular case it is not even necessary to give the academic answer as had to be done by the Punjab High Court, because if the order made by the Appellate Assistant Commissioner is an erroneous order, as we hold it was, then it is sufficient for us to say that that particular order was not in accordance with law and that order not being in accordance with law, there was no obligation upon the Appellate Tribunal to consider the report made on that order. Mr. Kolah has attempted to argue that it is not open to the Department to contend that the order of the Appellate Assistant Commissioner was erroneous, inasmuch as that order has become final and no appeal has been preferred against it by the Commissione ..... X X X X Extracts X X X X X X X X Extracts X X X X
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