SUDHIR KUMAR LAHA AND MANINDRA KUMAR LAHA SHEBAITS LEGAL REPRESENTATIVES OF ANATH KRISHNA LAHA (DECEASED) Vs. COMMISSIONER OF INCOME-TAX

JUDGEMENT

(1.) The question posed in this case is:

(2.) The facts are as follows: The Assessees are Sudhir Kumar Laha and Manindra Kumar Laha described in the assessment proceedings as shebaits and legal representatives of Anath Krishna Laha, deceased. The case relates to the assessment year 1947-48, the corresponding accounting year having ended on March 31, 1947. The deceased, Anath Krishna Laha, was an executor appointed by the will of Joggeswar Laha dated December 22, 1920, along with one Radhakanta Paul and Nrityakali Dassi, as executrix. By his will Joggeswar Laha bequeathed his business to his nephew Anath Krishna Laha and directed his executors and executrix who were also appointed trustees to carry out certain religious and charitable trusts mentioned in his will. He also appointed shebaits of three deities to be installed as directed in his will. Provision was also made for expenses in connection with the Puja of the deities and for meeting of certain other expenses. After the discharge of the said expenses the balance was to be utilised for the payment of rates, taxes, Government revenue and other incidental expenses. The surplus, if any, was to be utilised by the executrix, executors and trustees in such manner as might appear to them fit and proper for other religious and charitable acts. Joggeswar Laha died on January 22, 1921. Probate of the will was taken soon thereafter. The statement of the case shows that the administration of the estate was complete prior to the assessment year 1947-48. For the assessment years 1942-43 to 1946-47, income from the properties were assessed in the hands of the shebait Anath Krishna Laha in the name of three deities. The Income-tax Officer, however, thought that the assessment should be made in the name of the executors and trustees for the assessment years 1946-47 to 1954-55 inclusive and he started proceedings under Section 34(1)(a) of the Act. This case relates to the assessment year 1947-48 for which assessment was made on March 7, 19(sic) under Section 23(4) of the Act as no return had been filed. The Assessee appealed unsuccessfully to the Appellate Assistant Commissioner and then to the Appellate Tribunal. He filed no application under Section 27 but contended that the assessment under Section 23(4) was invalid. The revenue authorities contended that as the assessment had been made under Section 23(4) and no application had been made under Section 27 all that the Assessee could do was to question the quantum of the assessment and that it was not open to him so challenge the basis or legality thereof. This contention was upheld by the Tribunal relying upon the decision in Sri Padampat Singhania v. Commissioner of Income-tax, U.P. and Ajmir-Merwara, 1953 24 ITR 141. The question before us is whether it is open to an Assessee who claims that he is not liable at all to be assessed to prefer an appeal under Section 30(1) of the Act against a best of judgment assessment under Section 23(4), he having filed no return and not having taken proceedings under Section 27 of the Act.

(3.) On a plain reading of the sections it appears to me that the Tribunal had erred in law. Provisions for submitting returns of income are made in Section 22 of the Act. Under Sub-section (1) of the section it is obligatory on the Income-tax Officer to give notice by publication in the press and in the prescribed manner on or before May 1, in each year requiring every person whose total income during the previous year exceeded the maximum amount which is not chargeable to income-tax to furnish a return of his total income and total world income during that year. Under Section 22(2) it is also competent to the Income-tax Officer where he is of opinion that a particular person has an income which renders him liable to income-tax to serve a notice calling upon him to submit a return. Under Sub-section (4) the Income-tax Officer is authorised to serve a notice on any person who has made a return calling upon him to produce or caused to be produced such accounts or documents as he may require for the purpose of the section. The assessment then takes place under Section 23. Under Sub-section (1) it is open to the Income-tax Officer if he is satisfied that the return submitted is correct and complete to assess the total income of the Assessee and to determine the sum payable by him. Under Sub-section (2) he may serve a notice requiring the Assessee to produce or cause to be produced any evidence on which the Assessee may rely in support of his return if he is not satisfied about the correctness of the return. Where such a notice has been complied with it is open to the Income-tax Officer after hearing such evidence as may be produced to proceed under Sub-section (3) and make an order in writing assessing the total income of the Assessee determining the sum payable by him. Sub-section (4) deals with cases where the Assessee fails to make a return required by any notice given under Sub-section (2) of Section 22 or has not made a return or a revised return under Sub-section (3) of till section or fails to comply with the terms of a notice or under Sub-section (4) of the said section or having made a return, fails to comply with all the terms of a notice issued under Sub-section (2) of Section 23. In such a case the Income-tax Officer must make the assessment to the best of his judgment and determine the sum payable by the Assessee on the basis of such assessment.