COMMISSIONER OF INCOME-TAX Vs. DHANMAL CHELLARAM

JUDGEMENT

(1.) IN this case the assessee was served with a notice under Section 22 (2) for the assessment year 1939-40 on July 18, 1939, and a notice under Section 22 (4) for production of books was served on him on January 6, 1941. With regard to the production of books, extension of time was granted to him until February 25, 1941, when some books were produced but other books were not produced. That assessment was completed on September 22, 1943. For the assessment year 1940-41 notice under Section 22 (2) was served on July 20, 1940, and notice under Section 22 (4) was issued on February 11, 1941. No books were produced. Assessment was completed on September 22, 1943. For the assessment year 1941-42 a notice under Section 22 (2) was served on June 6, 1941, and notice under Section 22 (4) was served for production of books on August 11, 1948, Time was extended till August 31, 1943. The assessment was completed on September 22, 1943. Then the assessee applied to the INcome-tax Officer under Section 27 to set aside these assessments, but, the INcome-tax Officer declined to do so, and the Appellate Assistant Commissioner on appeal agreed with the INcome-tax Officer. Then the matter went before the Appellate Tribunal, and for the first time a point was urged by the assessee that inasmuch as the notice issued under Section 22 (2) and Section 22 (4) was invalid, further time should have been given to him and that there was sufficient cause for his not producing the books when called upon to do so.

(2.) IT is perfectly true that when the three assessments were made, the notices that were issued under Section 22 (2) or 22 (4) were in the eye of the law bad notices, but Ordinance XLV of 1944 which was promulgated on October 3, 1944, validated all these notices. The question that arises is whether notwithstanding the validation of these notices, the fact that at the time when the notices were issued they were invalid constituted sufficient cause within the meaning of Section 27 which prevented the assessee from complying with the notices under Section 22 (4 ).

(3.) THE other case relied upon is Commissioner of Income-tax v. Ekba1 & Co. (1944) 47 Bom. L. R. 181 : S. C. 13 I. T. R. 154. THEre Sir Leonard Stone and Mr. Justice Kania held that notice under Section 22 (2) was not a valid notice as it did not allow the assessee the time for making the assessment which was required under the law. THE point as to the validity of the notice was not taken by the assesee either before the Income-tax Officer or the Appellate Assistant Commissioner and it was taken for the first time before the Tribunal. Notwithstanding this both the learned Chief Justice and Mr. Justice Kania came to the conclusion that the assessee was entitled to have the assessment set aside. From this Mr. Seervai argues that although the assessee did not put forward the contention with regard to the invalidity of the notice either before the Income-tax Officer or the Appellate Assistant Commissioner, he is still entitled to take the point as it is a point of law. It is perfectly patent that if there is a factor which goes to vitiate the notice or to render it invalid or illegal, such a point can be taken at any stage and there would not be anything like an estoppel operating against the assessee. But here we arc not concerned with the invalidity of the notice. THE whole reference proceeds on the assumption that the notice has been rendered valid and it must be deemed to be valid at all times. THE only question we have got to consider is whether the particular cause on which Mr. Seervai is relying was a cause which in fact prevented the assessee from complying with the notice under Section 22 (4), and, as I have said, as that cause was never suggested, the assessee must fail to have his assessment set aside under Section 27. We, therefore, answer the question in the negative. THE assessee to pay the costs. .