SEGU BUCHIAH SETTY Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS reference under section 66(2) of the Income-tax Act, 1922, involves the interpretation of section 27 of the Act. In respect of the assessment years 1953-54 and 1954-55, the assessee produced no return, although called upon to do so under section 22(2). He was thereupon served with a notice under section 22(4) and called upon to produce his accounts. On failure to produce them, the Income-tax Officer made an assessment under section 23(4).

(2.) THE assessee then asked for cancellation of the assessment under section 27 on the ground that there was sufficient reason for non-compliance with the notices issued under section 22(2) and under section 22(4). THE Income-tax Officer, who held that there was no sufficient cause for non-compliance with the notice served under section 22(2), was however of the opinion that there was sufficient cause for non-compliance with the notice served under section 22(4). But, being of the opinion that the cancellation of the assessment was not possible, unless there was sufficient cause for non-compliance with both the notices, he refused to cancel the assessment.

(3.) MR.Srinivasan for the assessee contends that the cancellation of the assessment under this section was imperative, if, notwithstanding there being no sufficient cause to comply with the notice issued under section 22(2) there was sufficient cause for non-compliance with the notice issued under section 22(4), and that it does not make it necessary for the assessee to prove that there was sufficient cause for non compliance with both the notices.