1978 (4) TMI 19

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....t nil from the teh-bazari business. The ITO got information that the assessee had taken a teh-bazari contract in Patti Sultanpur, eight miles from Kashipur. The contract was taken in the name of Shiv Raj Saran, who was the real sister's husband of one partner and the son-in-law of the other partner, of the assessee-firm. The ITO issued notice under s. 142 of the I.T. Act. requiring the assessee to produce the accounts of this contract business. The assessee replied by a letter that it had never taken any contract of teh-bazari of Patti Sultanpur. The ITO, however, was not satisfied. He passed an assessment order to the best of his judgment under s. 144. In it he included an amount of Rs. 81,750 as the net income from the teh-bazari contract....

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....e instance of the Commissioner, the Tribunal has referred for our opinion the following question of law : " Whether, on the facts and in the circumstances of the case, the Tribunal was justified in cancelling the Income-tax Officer's order under section 186(2) even though there was on the part of the assessee-firm such failure in respect of the assessment year 1971-72 which called for an assessment under section 144 of the Income-tax Act, 1961 ? " The ITO having been informed that the assessee had carried on teh-bazari contract business at Patti Sultanpur, issued a notice under s. 142 requiring the assessee to produce the account books relating to that contract. In a written reply, the assessee stated that it had not taken any such contr....