Assessment validity and reference limits depend on notice compliance, accredited-agent service, and the scope of section 66.

Service of a requisition on an assessee's accredited agent is treated as sufficient notice under section 22(4), and failure to produce existing account books after such notice justifies assessment under section 23(4). The text also states that a denial of the books' existence does not excuse non-compliance once their existence is established through inspection. On the reference issue, section 66 is described as confined to orders made in appellate proceedings and not to a Commissioner's original penalty order made in the exercise of his own jurisdiction, so no reference lies on that point.

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Issues: (i) Whether the assessment made under section 23(4) of the Indian Income-tax Act was valid when the assessee failed to produce the account books called for under section 22(4). (ii) Whether the High Court could require a reference under section 66 in respect of the Commissioner's original order imposing penalty under section 28.

Issue (i): Whether the assessment made under section 23(4) of the Indian Income-tax Act was valid when the assessee failed to produce the account books called for under section 22(4).

Analysis: The finding accepted was that the Income-tax Officer had inspected and signed the relevant books during a local enquiry and that the books later produced were not the same books. Service of the requisition on the assessee's gomastha, who was treated as the accredited agent, was sufficient. A denial of the existence of the books did not excuse non-production once the books were found to exist and the assessee failed to comply with the notice under section 22(4). On those facts, the officer had jurisdiction to proceed under section 23(4).

Conclusion: The assessment under section 23(4) was valid and the point was answered against the assessee.

Issue (ii): Whether the High Court could require a reference under section 66 in respect of the Commissioner's original order imposing penalty under section 28.

Analysis: Section 66 was held not to extend to an original order made by the Commissioner in the exercise of his own jurisdiction. The reference procedure was treated as applicable only to orders made in appellate proceedings and not to an original penalty order passed by the Commissioner himself. On that basis, the penalty-related question was held not to be referable.

Conclusion: The High Court had no jurisdiction to call for a reference on the Commissioner's original penalty order, and the point was answered against the assessee.

Final Conclusion: The application failed in its entirety and the relief sought by the assessee was refused.

Ratio Decidendi: Service of a requisition on the assessee's accredited agent is sufficient, non-production of existing account books amounts to failure to comply with a lawful notice under section 22(4), and section 66 does not authorise a reference against a Commissioner's original order made otherwise than in appellate proceedings.

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