DAYALDAS KHUSHIRAM Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THESE two appeals arise out of a supplementary assessment of the appellant, Mr. Dayaldas Khushiram, for the assessment year 1937-38, made by the Income-tax Officer, Section II (Central), under Section 23(4) and Section 34 of the Income-tax Act. The appellant applied, under Section 27, to cancel the best judgment assessment, but the Income-tax Officer dismissed the application. The appellant took that order, as well as the order of assessment, in appeal to the Appellate Assistant Commissioner who, in each case, declined to interfere. THESE two appeals are respectively taken from his orders, and involve common facts. They were heard together, and may be conveniently disposed of in one judgment. The facts will make a long narration. We shall therefore confine ourselves at the outset only to such as will help of outline the case, and notice others in their proper place in the course of this judgment.

(2.) THE first assessment of the appellant for the year 1937-38 was made by the Income-tax Officer, C Ward, Section II, Bombay. THE appellant did not return any income, and submitted the form of the return with the remark "Accounts not kept; income to be estimated." Considering the past assessment which, under similar circumstances, had been made on a progressively higher income as estimated, and also the fact that the appellant had been re-assessed under Section 34 in the proceeding two years, the Income-tax Officer assessed him on an estimated income of Rs. 25,000, under Section 23(4) of the Act, on October 8, 1937.

(3.) WE shall first deal with the appeal from the order under Section 27 of the Act. After the appellant had filed a supplementary return, the Income-tax officer issued the first set of notices under Section 23(2) and Section 22(4), calling upon him to produce evidence in support of his return, also books of account for the Samvat year 1992, as well as all his bank pass-books, counterfoils of cheques, rent and tax bills, Ankdas of ready and forward business an all accounts showing investments. These requisitions were repeated not less than five times, till February 1940. The only compliance that the appellant made was to produce two pass-books of the Central Bank, Zaveri Bazar Branch, and the Bank of India, respectively. The letter did not relate to the accounting period which was Samvat year 1992, and was therefore useless.