Court upholds Income-tax Officer's assessment, deems notices valid, absence of Section 23(2) notice not critical. Questions not legal.

GOPALDAS PARSHOTTAMDAS Versus COMMISSIONER OF INCOME TAX, C.P. & U.P.

GOPALDAS PARSHOTTAMDAS Versus COMMISSIONER OF INCOME TAX, C.P. & U.P. - [1941] 9 ITR 130 (All) Issues:
1. Validity of notices issued under Sections 22(2) and 23(2).
2. Requirement of notice under Section 23(2) after submitting an application mentioning omissions.
3. Assessment under Section 23(3) versus Section 23(4) after hearing further evidence.

Analysis:

Issue 1: The first issue raised in the case was the validity of the notices issued under Sections 22(2) and 23(2). The assessee argued that the notice under Section 22(2) was illegal as it did not specify the particular person required to furnish the return. However, the court found that the notice clearly indicated the requirement to submit a return, and the assessee had previously filed returns as a Hindu undivided family without confusion. Therefore, the court held that the notice was not invalid, and the assessee had no grounds for non-compliance.

Issue 2: The second issue involved the necessity of a notice under Section 23(2) after the assessee submitted an application mentioning omissions. The court explained that while a notice under Section 23(2) is required if the Income-tax Officer believes the return is incorrect, in this case, no revised return was filed under Section 22(3). As a result, the court concluded that a fresh notice under Section 23(2) was not essential in this situation, and the absence of such notice did not invalidate the assessment.

Issue 3: The final issue pertained to the assessment under Section 23(3) versus Section 23(4) after hearing further evidence. The court clarified that even after issuing a notice under Section 23(3), an assessment could still be made under Section 23(4) if there was a default in complying with notices under Section 22(4) or 23(2). The court emphasized that it was not mandatory for the assessment to be conducted solely under Section 23(3) and that the Income-tax Officer had the discretion to proceed under Section 23(4) based on the circumstances.

In conclusion, the court dismissed the appeal, stating that the questions raised did not constitute legal issues under the circumstances of the case. The court found that the notices issued were valid, the absence of a notice under Section 23(2) was not crucial, and the assessment under Section 23(4) was justified based on the defaults observed. The court upheld the assessment made by the Income-tax Officer and rejected the application with costs awarded to the counsel for the Department.