Best judgment assessment is justified when required account books are withheld, and later-year assessments do not affect legality.

Under the Income-tax Act, an assessee must produce the accounts and documents called for in a notice, and the Income-tax Officer is the final judge of their relevance. Partial production does not amount to compliance where required books are withheld, so failure to produce all called-for books justifies best judgment assessment under Section 23(4). The legality of an assessment is not undermined merely because a later year's assessment was made on a different basis or on the same material. The stated result is that the assessment was sustained and the assessee's challenge failed.

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Issues: (i) Whether failure to produce all account books called for under the notice issued under Section 22(4) amounted to non-compliance attracting best judgment assessment under Section 23(4). (ii) Whether the manner in which the assessment was made for a subsequent year affected the legality of the assessment for the year in question.

Issue (i): Whether failure to produce all account books called for under the notice issued under Section 22(4) amounted to non-compliance attracting best judgment assessment under Section 23(4).

Analysis: The statutory scheme required the assessee to comply with the Income-tax Officer's demand for accounts and documents. The relevance of the documents called for was for the Income-tax Officer to judge, not the assessee. Partial production did not amount to compliance where books specifically required were withheld. Once there was failure to comply with all the terms of the notice, the Officer was entitled to make a best judgment assessment.

Conclusion: The withholding of some of the required books constituted non-compliance, and the assessment under Section 23(4) was justified.

Issue (ii): Whether the manner in which the assessment was made for a subsequent year affected the legality of the assessment for the year in question.

Analysis: The fact that a later assessment was made on the basis of the same material could not control the legality of the earlier assessment. A lawful order could not be invalidated merely because a different course was adopted in a subsequent year.

Conclusion: The subsequent year's assessment did not provide any ground to disturb the assessment for the year in question.

Final Conclusion: The questions were answered against the assessee, the petition failed, and the assessment was sustained.

Ratio Decidendi: Under Section 22(4) and Section 23(4) of the Income-tax Act, the Income-tax Officer is the final judge of the accounts and documents required for assessment, and failure to produce the books called for justifies best judgment assessment.

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