Best judgment assessment upheld: combined notice for attendance and accounts was valid, and non-compliance triggered section 23(4).

A combined notice requiring attendance and production of accounts was held valid, and non-compliance with it could justify best judgment assessment under section 23(4) on the Income Tax Officer's information. Filing a return under section 22(2) did not prevent the officer from calling for accounts and personal attendance before deciding whether to accept the return. A further notice under section 23(2) was not required where the assessee failed to comply with a lawful notice under section 22(4). The reference was answered against the assessee, and the assessment power under section 23(4) was upheld on the facts.

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Issues: (i) Whether a combined notice under sections 23(2) and 22(4) is valid and whether non-compliance with it can justify assessment under section 23(4); (ii) whether, where an assessee has filed a return under section 22(2), a notice under section 22(4) is valid so as to justify assessment under section 23(4) on non-compliance.

Issue (i): Whether a combined notice under sections 23(2) and 22(4) is valid and whether non-compliance with it can justify assessment under section 23(4).

Analysis: The questions were treated as covered by existing authority. A notice may validly combine the requirements of attendance and production of accounts. Where the assessee does not comply with the requirement to produce accounts, the default attracts section 23(4), which authorises assessment on the best of the Income Tax Officer's information.

Conclusion: The combined notice is valid, and non-compliance with its terms can justify assessment under section 23(4).

Issue (ii): Whether, where an assessee has filed a return under section 22(2), a notice under section 22(4) is valid so as to justify assessment under section 23(4) on non-compliance.

Analysis: Filing of a return does not prevent the Income Tax Officer from requiring production of accounts and personal attendance before deciding whether to accept the return. A further notice under section 23(2) is not a precondition to the exercise of power under section 23(4) where the assessee fails to produce the accounts lawfully called for under section 22(4).

Conclusion: The notice under section 22(4) is valid, and failure to comply can support assessment under section 23(4) without a further notice under section 23(2).

Final Conclusion: The reference was answered against the assessee, and the assessment power under section 23(4) was upheld on the facts.

Ratio Decidendi: A lawful requisition for attendance and production of accounts may be combined, and non-compliance with such a requisition can attract best judgment assessment under section 23(4) without the need for a separate notice under section 23(2).

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