Judgement

Appeal (No. 43 of 1936) from a judgment of the Court of the Judicial Commissioner, Central Provinces (April 12, 1934), upon a reference under s. 66, sub-s. 2, of the Indian Income-tax Act, 1922.

This appeal related to an assessment made upon the respondent taxpayer by the Income-tax Officer of Akola " to the best of his judgment " under s. 23, sub-s. 4, of the Income-tax Act, 1922, consequent upon the alleged failure of the respondent to comply with all the terms of a notice, requiring him to produce accounts, issued by the officer under s. 22, sub-s. 4, of the Act. One of the questions raised in the appeal was whether the order of assessment passed by the Income-tax Officer was, in all the circumstances, made to the best of his judgment.

The facts, the seven points referred to the Court of the Judicial Commissioner, and the relevant provisions of the Indian Income-tax Act, 1922, appear from the judgment of the Judicial Committee.

The Judicial Commissioner and the Additional Judicial Commissioner before whom the reference came held (inter alia) that the notice was legal and that the officer had jurisdiction to make the summary assessments under s. 23, sub-s. 4, of the Act. They were of opinion, however, that no assessment would be an assessment by the officer "to the best of his judgment " within the meaning of

s. 23, sub-s. 4, unless, first, a local inquiry to ascertain the income for the previous year of the proposed assessee was first held, and secondly, the officer placed on the record a note of the details and results of his inquiry. They held that the present assessment rested merely on the caprice of the officer and was not made " to the best of his judgment " within the meaning of sub-s. 4 of s. 23.

1937- Jan-25-Wallach for the appellant. The Income-tax Officer was justified in thinking that there was no reason why the books should not have been produced, and in proceeding to make the assessment on the information available. The question for consideration under s. 27 is not whether the assessment was correct or not, but whether there was sufficient ground for the assessees non-compliance with the order to produce accounts. There is no appeal from an assessment made under s. 23, sub-s. 4, even if it is made arbitrarily by the Income-tax Officer. Under

s. 33 an unreasonable and arbitrary assessment can be reviewed by the Commissioner that is the only check on the Income-tax Officer if he fails to assess " to the best of his judgment." [Reference was made to Krishakumar and Mahendrakumar Ghosh, In re (( 1930) I. L. R. 58 C. 906.), and Krishna Kumar and Mahendra Kumar Ghose v. Commissioner of Income-tax, Bengal. (( 1931) 5 I. T. C. 295, 301.)] No question of law is raised in the questions submitted to the Court of the Judicial Commissioner. In the absence of proof to the contrary, it must be presumed that in estimating the income of the assessee respondent at Rs. 1,00,000, and in making an assessment in that amount, the Income-tax Officer acted according to the best of his judgment, and there is no evidence to the contrary. There was no evidence that the assessee had been prevented by any cause from complying with the terms of the notice issued to him under s. 22, sub-s. 4. The judgment of the Judicial Commissioners was erroneous, and should be reversed. [Reference was also made to Gopinath Naik

v. Commissioner of Income-tax. (( 1935) I. L. R. 58 A. 200, 206, 227.)]

Law. Rep. 64 Ind. App. 102 ( 1936- 1937) Commissioner of Income-Tax V. Badridas Ramrai Shop

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The respondent did not appear.

Feb. 19. The judgment of their Lordships was delivered by

LORD RUSSELL OF KILLOWEN. In this case the Commissioner of Income-tax for the United and Central Provinces appeals from a judgment of the Court of the Judicial Commissioner, Central Provinces, on a reference under s. 66, sub-s. 2, of the Indian Income-tax Act

(XI. of 1922). The respondent taxpayer did not appear on the hearing of the appeal.

The case relates to an assess