JUDGMENT

Bhide, J. - Civil Miscellaneous (reference) No. 549, and Civil Miscellaneous (reference) No. 550 of 1926 being connected will be disposed of together.

2. On a memorandum issued by this Court, the Income-tax Commissioner has referred the following question of law for decision, viz., whether, in the circumstances stated below, the income-tax officer legally proceeded to assess the petitioners under Section 23(4), and, therefore, no appeal lay to the Assistant Commissioner.

3. The petitioners are commission agents, admittedly carrying on three different businesses in Jullundur and Amritsar. Certain information received from Bombay led the income-tax officer, Jullundur, to believe that there was a fourth business of this firm carried on at Jullundur under the name "Karam Chand-Dina Nath." A notice under Section 22(4), Income-tax Act, was issued to the firm to produce accounts of this business, but the petitioners failed to do so and stated that no such business existed during the year for which the assessments in the two references were made, viz., 1924-1925, and 1925-1926. The income-tax officer thereupon proceeded to make an assessment to the best of his judgment under Section 23(4) on the ground that the petitioners had failed to comply with the terms of the notices issued under Section 22(4). Appeals were filed and were rejected by the Assistant Commissioner on the ground that no appeal lay, the assessments being under Section 23(4).

4. Two points have been urged on behalf of the petitioners, viz. (1)., that the income-tax officer had no power to issue a notice under Section 22(4) when inquiry had already started under Section 23(3), and that the assessment should have been under Section 23(3), and not under Section 23(4); (2) that as the accounts of the business asked for did not exist it cannot be said, that there was any failure to comply with the terms of the notices issued under Section 22(4). The petitioners appeared and stated that the accounts called for did not exist and it was impossible for the petitioners to do anything more to comply with the terms of the notices issued under Section 22(4).

5. There is an important point of distinction between the facts of the two references which must be noted at the outset. The assessment for the year 1924-1925 was a supplementary one under Section 34, Income-tax Act, while that for the year 1925-1926 was an original assessment under Section 23 of that Act. For the purposes of the supplementary assessment, the income-tax officer had certainly power to issue a fresh notice under Section 22(4) read with Section 34. As regards the assessment for the year 1925-1926, it was not disputed on behalf of the respondent that the notice under Section 2(4) was issued during the course of an inquiry under Section 23(3), but it was contended that the powers conferred by Section 22(4) are very wide and it was open to the income-tax officer to issue notice under that Sub-section at any time during the course of the assessment. Radha Krishan & Sons v. Income-tax Commissioner, Punjab A.I.R. 1927 Lah. 5 was cited as an authority; but that ruling only deals with the question whether an income-tax officer can call for accounts for the branch of a firm situated in a Native State. No authority directly in point has been cited; but, on a careful consideration of the provisions of Sections 22 and 23, the contention of the applicants, that a notice under Section 22(4) could not be issued after the commencement of an inquiry under Section 23(3), appears to us to be sound. Section 22 deals with "Return of Income," while Section 23 deals with "assessment." Under Section 22, the income-tax officer is authorized to call for a "Return of Income" and Sub-section (4) gives him power to call "such documents and accounts" as he may require. This is apparently intended to help the income-tax officer in deciding whether he will accept the return or proceed to make an inquiry under Section 23. If this were not so,