Defective return is not a nullity, but failure to produce accounts can still independently justify summary assessment.

A defective return filed without the required profit and loss account and balance-sheet under the mercantile system is not automatically a nullity in law if it otherwise substantially complies with the prescribed form; the statutory scheme contemplates an to complete or rectify omissions, so summary assessment cannot rest solely on the footing that no return was made. By contrast, non-compliance with a notice requiring production of accounts is a distinct statutory default and can independently justify summary assessment even if no notice calling for attendance and evidence was issued. The return was therefore not treated as no return, but the separate accounts-production default remained sufficient to sustain the assessment.

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Issues: (i) Whether a return filed without the required profit and loss account and balance-sheet, in a case governed by the mercantile system, could be treated as no return in law so as to justify assessment under the summary assessment provision without first issuing notice under the provision dealing with completion of a defective return. (ii) Whether non-compliance with a notice calling for accounts under the accounts-production provision could independently justify summary assessment even though no notice had been issued under the provision calling for attendance and evidence.

Issue (i): Whether a return filed without the required profit and loss account and balance-sheet, in a case governed by the mercantile system, could be treated as no return in law so as to justify assessment under the summary assessment provision without first issuing notice under the provision dealing with completion of a defective return.

Analysis: A return required under the notice to furnish income is distinct from the annexures required by the rules. An omission to attach the profit and loss account and balance-sheet, though a defect, does not by itself make the return nonexistent in law where the return otherwise substantially complies with the prescribed form. The statutory scheme provides a separate opportunity to rectify omissions or complete the return, and notice calling for attendance and evidence is the proper step before rejecting such a return as invalid. Where the return is only defective and not a complete nullity, the summary assessment power cannot be invoked merely on the footing that no return was made.

Conclusion: The issue was answered in the negative and in favour of the assessee.

Issue (ii): Whether non-compliance with a notice calling for accounts under the accounts-production provision could independently justify summary assessment even though no notice had been issued under the provision calling for attendance and evidence.

Analysis: The notice calling for accounts serves a purpose different from the notice calling for attendance and evidence. The power to require production of accounts may be exercised before or after the filing of the return, and it is not dependent on prior issue of the attendance-and-evidence notice. Failure to comply with the accounts-production notice is itself a distinct statutory default and independently attracts the summary assessment power. The absence of the attendance-and-evidence notice does not nullify the consequence of non-compliance with the accounts-production notice.

Conclusion: The issue was answered in the affirmative and in favour of the Revenue.

Final Conclusion: The reference was disposed of by holding that the return was not to be treated as a nullity, but the separate default in not complying with the accounts-production notice was sufficient to sustain the summary assessment.

Ratio Decidendi: A defective return is not necessarily no return in law, but non-compliance with a notice requiring production of accounts is an independent default that can by itself justify summary assessment.

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