R K BALA Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) This is a reference under Section 66(1), Income-tax Act, 1923 made by the Appellate Tribunal on two points of law arising in the case in the following circumstances: The assessment year is 1947-48. The Income-tax Officer had sent a notice under Section 22(2) of the Act asking for the Return in June, 1947. The assesses on 29-6-1947 applied for two months' time for furnishing the Return. Time was extended to the end of July, 1947. The fact remains that no Return was received by the Income-tax Officer at any time whatsoever. On 9-2-1948, the Income-tax officer issued a notice by registered post under Section 23(4) for production of books on 23-2-48. The assessee's representative however prayed for time to comply with the notice under Section 22(4). On this the Income-tax Officer sent a further notice under Section 22(4) for production of books on 12-3-1948. As no Return had been received and notice under Section 22(4) had not been complied with, the Income-tax Officer made, assessment under Section 23(4) on 13-3-1948 according to his best judgment. The assessee filed an application under Section 27 of the Act for reopening the matter on the ground that in fact he had sent the Return by post on 7-3-1948 and further that the notice under Section 22{4) was received by him only on 17-31948, that is, five days after the date fixed, for the production of the books in the notice under Section 22(4). Thereafter, it appears the case had taken a chequered career. The Income-tax Officer having refused the grayer of the assessee, he (the assessee) went up in appeal before the appellate, Assistant Commissioner who allowed the assessee's appeal by an order for reopening of the assessment under Section 27 of the Act. The department filed an appeal before the Appellate Tribunal. There being a difference of opinion between two Members who originally heard the appeal, the opinion of the third Member decided the case in favour of the department. As I have indicated above the Income-tax Officer had never received the Return in compliance with the notice under Section 22(2) but nevertheless there is no dispute over the fact that the assessee had sent the Return by post on 7-3-1948 to the Income-tax Officer, and further that in fact the second notice under Section 22(4) for requiring the assessee to produce the account-books on 12th March was received by the assessee on 17th March. On these facts, the following two questions have been referred to us:

(2.) We will take up question No. (1) first It will be pertinent' to reproduce Subsections (2), (3) and (4) of Section 22 and Sub-section (4) of Section 23 which run as follows:

(3.) After going through these sections carefully we are unable to accept the contention of Mr. Mohanty that the words "make the return" used in Section 23(4) do not convey the meaning of delivery to or receipt by the Income-tax Officer. It is one of the settled principles of construction that the terms used in the section ought to be interpreted with reference to, the context in which expressions have been used in the statute. It will be sufficient for our purpose, in support of this well settled principle, to refer to a decision of the Madras High Court in the case of -- 'Viswanathan Chettiar v. Comrnr. of Income-tax, Madras", AIR 1954 Mad 928 (A). Their Lordships observed;