Best judgment assessment upheld where transferred tax case could rely on earlier notice and non-filing of return persisted

A notice under section 22(2) was treated as a condition precedent to a best judgment assessment under section 23(4) where no return was filed, but a valid transfer of the case under section 5(7A) allowed the successor Income-tax Officer to proceed on the notice already issued by the transferor. The objection that fresh notice or Official Gazette publication was required was rejected because section 5(6) did not apply to that transfer. The assessee's failure to file the required return therefore justified the assessment, which was upheld as valid.

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Issues: Whether the assessment made under section 23(4) of the Indian Income-tax Act was vitiated by the alleged invalidity of the notice under section 22(2) and the transfer of the case to the Special Circle, Nagpur.

Analysis: A notice under section 22(2) is a condition precedent for making a best judgment assessment under section 23(4) when the assessee fails to file a return. The case was transferred under section 5(7A) of the Indian Income-tax Act, which empowered the successor Income-tax Officer to proceed with the matter without re-issuing a notice already issued by the transferring officer. The contention that the transfer required publication in the Official Gazette was rejected, as section 5(6) had no application to such a transfer. The successor officer was therefore competent to rely on the earlier notice, and the assessee's failure to file the required return was sufficient to sustain the assessment.

Conclusion: The assessment under section 23(4) was valid, and the challenge based on the alleged invalidity of the notice and transfer failed.

Ratio Decidendi: Where a case is validly transferred under section 5(7A), the successor Income-tax Officer may act on a notice already issued by the transferor officer, and the assessee's failure to comply with section 22(2) justifies a best judgment assessment under section 23(4).

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