TMI Blog1952 (8) TMI 31X X X X Extracts X X X X X X X X Extracts X X X X ..... ccount books were produced. The Income Tax Officer then made his assessment under Section 23(4) as was open to him and he estimated the income of the assessee firm for the year under consideration at ₹ 65,000. In making this best judgment assessment he took into consideration the assessments made for two previous years on the basis of the assessees accounts showing incomes in each year approximately ₹ 35,000. He considered that non-submission of returns and withholding of accounts justified the presumption that income in the material year must have been much more than those of the two previous years. For failure to comply with the notices under Section 22(2) and 22(4) penalty was imposed upon the assessee. The assessee fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er. He seemed to hold that he was not bound by the action of his predecessor. In the course of his order he did say that he was unable to place any reliance upon the accounts which the assessee had then produced and he considered that the assessment based on these accounts therefore could not be supported. In the result he confirmed the order of assessment at ₹ 65,000 which had been originally made. The assessee filed three appeals to the Appellate Tribunal against the three orders dismissing his three appeals to the Appellate Assistant Commissioner. In the appeal against the penalty order the quantum of penalty was reduced. The appeal relating to Section 27 of the Act was dismissed. The present reference arises from the appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion account books of the assessee which had not been produced before the Income Tax Officer at the time the first assessment was made ? It seems to me the answer to this question must be in the affirmative. There is nothing in Section 31(2) which limits the scope of the further inquiry ordered under clause (2). Further inquiry by its very nature implies that fresh evidence should be led, and the account books of the assessee undoubtedly are fresh evidence. For the Department reference has been made to the provisions of Order XLI, rule 27, of the Code of Civil Procedure. This provision has no application to the present matter, for it deals merely with the rights of parties to lead further evidence before an appellate Court and has n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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