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.) It has got to be remembered that under Section 27 it is for the assessee to show cause and it is for the Income-tax Officer to be satisfied that the cause shown is a sufficient cause. It was never suggested by the assessee before the Income-tax Officer, or before the Assistant Appellate Commissioner, or, even as a matter of fact, before the Appellate Tribunal that the reason why he could not comply with the notices under Section 22(4) was that he thought those notices were bad in law and he was under no obligation to produce the books. The cause which he showed before the Income-tax Officer and the Appellate Assistant Commissioner was an entirely different cause and that cause was found insufficient by both those officers. It was only before the Tribunal that this point was urged, not on the ground that the supposed invalidity of the notice weighed upon the mind of the assessee and prevented him from complying with the notice, but purely as a matter of law that inasmuch as the notices were invalid at the time when they were issued, their validation subsequently did not prevent the assessee from putting forward the case of sufficient cause under Section 27. We fail to see how a question of law in this form can arise with regard to the sufficiency of cause shewn by the assessee. There must be found as a fact that a particular cause operated upon the mind of the assessee which prevented him from complying with the notice. That is a pure question of fact. The sufficiency of it may be a question of law, but in this case the very basic fact is absent, viz. that the invalidity of the notice did operate upon the mind of the assessee and thereby prevented him from complying with the notice. Therefore, in my opinion, the Tribunal was not right in coming to the conclusion that the assessee was prevented by sufficient cause from complying with the notice.