K MUNIRATNAM MUDALIAR Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THESE cases relate to assessments made by the Income-tax Officer under section 23(4) of the Indian Income-tax Act subsequent to the failure of the assessee to comply with the terms of a notice issued under section 23(2) of the Act. In Tax Case No. 145 of 1960 the question that has been referred to us is

(2.) "Whether on the facts and in the circumstances of the case there was no material before the Appellate Tribunal to justify the decision that Rs. 30, 000 should be added to the assessee's disclosed income on the basis of an estimate under section 23(4) of the Income-tax Act "

(3.) THE Income-tax Officer, City Circle-V, issued fresh notice under section 23(2) and posted the case for hearing on December 26, 1955. THE assessee failed to appear and the proceedings were adjourned to January 18, 1956. On that date, the assessee wanted an adjournment to enable him to produce the necessary evidence in support of his returns. But the Income-tax Officer, very properly, refused to adjourn the case. He, therefore, proceeded to complete the assessment under section 23(4) to the best of his judgment. In respect of assessment year 1952-53 he accepted the assessee's return of income from his individual business as Rs. 2, 726 but estimated his share income from the partnership firm at Rs. 20, 000. He also estimated that the assessee should have made an income of Rs. 10, 000 by exploiting other pictures during the relevant year of account. THE result was that the assessee's total income for that year was fixed at Rs. 32, 726. For the subsequent year 1953-54, the Income-tax Officer refused to accept the return of the assessee showing loss and took the view that the assessee must have earned income, during the year, which he estimated at Rs. 30, 000THE assessee took steps under section 27 of the Act to have the above assessments under section 23(4) set aside, but failed.