Power to require further evidence permits an assessing officer to summon documents and uphold an assessment when evidence is inadequate.

Under the governing statutory scheme the officer conducting an enquiry under section 23(3) may, read with the Act's attendance and compulsion powers, require production of specified evidence, summon witnesses, adjourn and issue fresh notices to secure that evidence; failure to produce required material may permit proceeding under the subsequent provision. The HC found the assessor conducted hearings, evaluated expert testimony and record production requests, reached a factual conclusion under section 23(3) and therefore held no pure question of law arose - the assessment was upheld on the factual record.

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Issues: Whether under section 23(3) of the Income-tax Act the Income-tax Officer, in determining assessment, may require further specified evidence from the assessee and exercise powers to summon or call for evidence under the Act, and whether any question of law arises from the assessment made under section 23(3).

Analysis: Section 23(3) must be read with the remainder of the Act, particularly section 37, which furnishes power to enforce attendance, examine witnesses, and compel production of documents when a judicial enquiry is held under section 23. Where the assessor is not satisfied with the return and a hearing is held after notice under section 23(2), the assessor may, consistent with the powers in section 37, require production of further evidence on specified points, adjourn, and give fresh notice to secure that evidence; failure by the assessee to produce such evidence may lead the officer to proceed under section 23(4). The facts stated show that the officer conducted hearings, weighed the evidence produced including expert testimony, requested production of daily stock records, and reached a factual conclusion under section 23(3). The matter therefore involves no pure question of law for the Court to decide.

Conclusion: The Income-tax Officer is entitled, when conducting an enquiry under section 23 read with section 37, to require further specified evidence and to take into account the absence or inadequacy of such evidence in arriving at an assessment under section 23(3); no question of law arises and the assessment is to be upheld.

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