Alfred Henry Lionel Leach, C.J.

1. In accordance with the direction of the Court given under Section 66(3) of the Indian Income Tax Act the Commissioner of Income Tax has referred the following question for the Courts decision:

When there is evidence on which the Income Tax Officer can base a finding that the assessees books are unreliable and consequently rejects them and the assessee fails to produce other evidence, can the Income Tax Officer assess under Section 23(3) of the Act to the best of his judgment?

The words to the best of his judgment are used only in Sub-section (4), which requires the Income Tax Officer to make the assessment to the best of his judgment when there has been a default of the nature contemplated by the sub-section. Sub-section (3) directs the Income Tax Officer to make the assessment after hearing such evidence as the assessee may produce and such other evidence as the Income Tax Officer may require him to produce on specified points. No direction is given to the Income Tax Officer when assessing under Sub-section (3) and the assessee fails to produce evidence or produces evidence which the Income Tax Officer considers unreliable or incomplete. The