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TMI Blog1962 (10) TMI 87X X X X Extracts X X X X X X X X Extracts X X X X ..... read with section 22(2) was served on the assessee by affixing it at the premises, 232-234, Kalbadevi Road, Bombay, where, according to the information received by the Income Tax Officer, the assessee was carrying on business in Bombay. This notice was pasted on the premises on March 29, 1955. The assessee did not furnish any return of his income in response to the aforesaid notice. During the inquiries, the Income Tax Officer further came to know that there were also other remittances from Bombay to the assessee's account and the extent of such transactions was quite a large one. In an assessment under section 23(4), the Income Tax Officer held that the amounts credited in the bank accounts represented the profits of the assessee in the business of speculation. This finding was based on the fact that the address of the assessee in Bombay was Marwari Chambers, which was in occupation of speculators. The Income Tax Officer estimated the income of the assessee at ₹ 3,00,000 and completed the assessment under section 23(4) on 24th March, 1956, treating the assessee as a resident. Consequent on the assessment under section 23(4), a notice of demand was issued, and was served ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 23(4) on the following grounds : "(1) That the proceedings under section 34(1) are bad in law; (2) that the assessment was invalid because the Income Tax Officer had no jurisdiction to assess the applicant who is a non-resident; (3) that the service of notice under section 34 was invalid; (4) that the assessment was erroneously made under section 23(4); and (5) that the estimate of income at ₹ 3 lakhs was excessive." 3. The Appellate Assistant Commissioner rejected every one of these contentions and dismissed the appeal. The assessee took a further appeal to the Tribunal against the order of the Appellate Assistant Commissioner. One of the contentions raised in the grounds of appeal but the question of legality of assessment under section 23(4) was given up. The grounds which were pressed before the Tribunal were : "(1) That section 34 was not properly invoked in the case as the Income Tax Officer had no jurisdiction to make assessment and as there could be no reasonable satisfaction about income having escaped assessment; (2) that the assessee was not carrying on business at 232-234, Kalbadevi Road; (3) that the applicant was not a re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on, and we reframe it as follows : "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in not considering the contention of the assessee as regards the validity of the proceedings taken under section 34(1) (a) read with section 22(2) of the Income Tax Act ?" 6. Mr. Bajaj, appearing on behalf of the assessee, contends that the right of appeal conferred on an assessee under section 30(1) is a right which the assessee could exercise independently of section 27. It is not necessary for the assessee to take any proceedings under section 27. He could straight-away approach the appellate authority by filing an appeal under sub-section (1) of section 30 of the Act, challenging the validity of the assessment order under section 23(4) of the Act, on the ground that the provisions of the Indian Income Tax Act did not apply to the case. This exactly was the assessee's case. According to him, he was not a resident in the taxable territories. On the other hand, he was throughout the year residing at Jaipur. It was also the assessee's case that he did not carry on any business in the relevant assessment year in Bombay; the provisions of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee as regards the validity of the proceedings under section 34 of the Indian Income Tax Act. 9. The scope and ambit of an appeal, where the assessee was amenable to the provisions of the Indian Income Tax Act, have been considered by this court in Mauladin Ayub Firm v. Commissioner of Income Tax. In that case, the Income Tax Officer believed that the assessee was maintaining a separate set of books which had not been produced before him. He, therefore, issued a notice to produce the second set of books. The assessee contended that he did not maintain two sets of books, and that whatever books he had, had been produced, and, therefore, he could not comply with the notice. As the assessee failed to comply with the notice, the Income Tax Officer assessed the assessee under section 23(4) of the Indian Income Tax Act to the best of his judgment. The assessee made no application under section 27 to have the best judgment assessment set aside, but appealed to the Appellate Assistant Commissioner under section 30, and in this appeal, he questioned the validity of the Income Tax Officer's assessment. It was held that the assessee was not entitled to challenge the validity of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was prevented by sufficient cause from complying, with the terms of the last-mentioned notices, the Income Tax Officer shall cancel the assessment and proceed to make a fresh assessment in accordance with the provisions of section 23". 11. It would be seen that if the assessee has a grievance that he was prevented by sufficient cause from making a return required by section 22; then, it is open to him to make an application under section 27, and get the ex part assessment made against him set aside. Now, in the instant case, the assessee was served with a notice under sub-section (2) of section 22 read with section 34(1) (a) of the Act. That notice required the assessee to furnish, within the period stated in the notice, a return, in the prescribed form and verified in the prescribed manner, of his total income. The assessee has not filed a return in response to this notice. The ground urged for not filing a return is that he did not receive the notice because he was not residing at the address at which the notice was served by affixing it to the premises. Now, this ground is a sufficient cause preventing the assessee within the meaning of the section for failure to file a re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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