CHHOTELAL GOBARDHAN DAS Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE question referred to us under Section 66 (2), income -tax Act, is as follows : 'Whether in an appeal under Section 33 (1), Income -tax Act,against an order passed under Section 23 (4), the validity of the assessment made under Section 23 (4), can be challenged when no second appeal against the order of the Appellate Assistant Commissioner confirming the order of the Income -tax Officer passed under Section 27 refusing to cancel the assessment so made was filed ?'

(2.) ON 16 -10 -1942 the Income -tax Officer made an assessment under Section 23 (4), Income -tax Act, on an estimated income of Rs. 10,000. The assessee had made a return and had claimed that he had suffered a loss of Rs. 13,320 -5 -3. The Income -tax Officer thereafter issued notice to the assessee to produce his Sauda Bahi so that the Income -tax Officer may be able to ascertain whether the assessee's contention that he had suffered loss to the extent mentioned by him was correct. The assessee, however, did not produce the Sau a Bahi and the Income tax Officer made the assessment as stated above.

(3.) THE assessee then filed two appeals before the appellate Assistant Commissioner of Income -tax one against the assessment order, dated 16 -10 -1942, and the other against the order, dated 27 -1 -1943, refusing to set aside the order of 16 -10 -1942, and make a fresh assessment. These two appeals were heard separately by the Appellate Assistant Commissioner of Income -tax on different dates, On 5 -8 -1943, the Appellate Assistant Commissioner of Income -tax dismissed the appeal against the order, dated 27 1 -1943 and on 7 -8 -1943, he partly allowed the appeal against the order dated 16 -10 -1942, and modified that order. Against the order, dated 7 -8 -1943, an appeal was filed before the Income -tax Appellate Tribunal. At the time of the hearing of the appeal, however, it was argued that the assessment made under Section 23 (4) of the Act was wrong and that the application under Section 27 should, therefore, have been granted and a fresh assessment made in accordance with the provisions of that section. The Tribunal said as follows :