Validity of assessment under Section 23(4) upheld where signed account books were not produced after proper notice.

Validity of assessment under Section 23(4) was upheld where the Commissioner found on facts that the Income Tax Officer had inspected and signed account books and the assessee failed to produce those books after proper notice to its accredited agent; accordingly the assessment was within the Officer's jurisdiction. The Commissioner's subsequent imposition of a penalty under Section 28 was sustained because the Commissioner's factual findings supported the determination of inaccuracy. The High Court cannot, under Section 66, require a statement of case in respect of an original order passed by the Commissioner.

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Issues: (i) Whether the assessment under Section 23(4) of the Income-tax Act was valid; (ii) Whether the penalty under Section 28 was validly imposed; (iii) Whether this Court can require the Commissioner to state a case under Section 66 in respect of an original order passed by the Commissioner (not passed on appeal).

Issue (i): Whether the assessment under Section 23(4) of the Income-tax Act was valid.

Analysis: The Commissioner found on facts that the Income Tax Officer had inspected and signed certain account books at the mill on 30th July 1926, that the books later produced were different, and that the assessee failed to produce the books which the officer had signed after proper notice served on the assessee's accredited agent. The Court is bound to accept the Commissioner's findings of fact and cannot reappraise those factual findings.

Conclusion: The assessment under Section 23(4) was valid and within the Income Tax Officer's jurisdiction.

Issue (ii): Whether the penalty under Section 28 was validly imposed.

Analysis: The Commissioner initially cancelled the penalty imposed by the Income Tax Officer on procedural grounds but subsequently, after calling on the assessee to show cause, imposed the penalty himself. The Court examined whether the procedural defects relied upon by the assessee defeated the Commissioner's power to proceed and found no ground to set aside the substantive determination of inaccuracy where the Commissioner's factual findings supported the imposition.

Conclusion: The Commissioner's order imposing the penalty under Section 28 was sustained.

Issue (iii): Whether this Court may require the Commissioner to state a case under Section 66 in respect of an original order made by the Commissioner.

Analysis: The Court considered the language and scope of Section 66 and relevant precedents. It noted that Section 66 permits the High Court to require a statement of case in relation to matters coming before the Commissioner on appeal from the Assistant Commissioner, but does not, by plain language, empower the High Court to call for a case in respect of an original order passed by the Commissioner himself.

Conclusion: This Court has no jurisdiction under Section 66 to require the Commissioner to state a case in respect of an original order passed by the Commissioner; that point does not arise for reference.

Final Conclusion: On the accepted findings of the Commissioner of fact and law, the assessment under Section 23(4) and the penalty under Section 28 are sustained, and the Court will not require the Commissioner to state a case under Section 66 in respect of an original order.

Ratio Decidendi: Where the Commissioner's factual findings establish that account books inspected and signed by the Income Tax Officer existed and were not produced after proper notice served on the assessee's accredited agent, the Income Tax Officer may validly make an assessment under Section 23(4); furthermore, Section 66 does not empower the High Court to require a statement of case in respect of original orders made by the Commissioner.

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