Bhandari, C.J. - (1.) These three applications under Section 66 (2), Income-tax Act, relate to assessments for the years 1947-48, 1948-49 and 1949-50 and raise a common question of law, namely whether the assessee was afforded a reasonable opportunity of meeting the case of the Income-tax Department.
(2.) The assessee in this case is one Mohammad Ishaq who is carrying on business in Sadar Bazar at Delhi. On 11-8-1949 he appeared before the Income-tax Officer, Delhi, and submitted returns in respect of his income for the years 1947-48 and 1948-49. The Income-tax Officer recorded his statement and served him with a notice under Section 23 (2) of the Act. requiring him to produce immediately the evidence on which he relied in support of the returns. The latter asked for time to produce his evidence and the case was accordingly adjourned to 8-10-1949. On 10-10-1949, Mr. Pardhuman Kumar, counsel for the assesses, appeared before the Income-tax Officer and stated that the assessee had to leave suddenly for Bombay two days before as his daughter had been taken seriously ill. The counsel produced the assessee's pass book issued by the Punjab National Bank. On 13-10-1949 the Income-tax Officer issued a notice to the assessee under Section 22(4) of the statute requiring him to appear on the following day and to produce the accounts and documents mentioned in the order. The assessee appeared before the Income-tax Officer as directed but he expressed his inability, in view of the shortness of time, to produce the accounts or documents required of him. The Income-tax Officer declined to adjourn the case for the production of books of account and proceeded to record an order in which he stated that on the basis of information which he had obtained from other sources he was satisfied that the assessee had been supplying tin scrap for several years to various factories in Delhi. He accordingly assessed the assessee's income at Rs. 1,75,000/- from scrap business alone. The assessments were made for the years 1944 to 1950 and were confirmed by the Appellate Assistant Commissioner in appeal.
(3.) The assessee preferred six separate appeals to the Income-tax Appellate Tribunal at Delhi hi which he challenged the correctness of the assessments for the years 1944 to 1950. One of the grounds taken up in the memorandum was that the assessment was vitiated in law as the assessee had not been afforded a reasonable opportunity (a) of producing his accounts and furnishing his evidence under Sections 22(4) and 23(2) of the Income-tax Act and (b) of rebutting the conjectures and allegations of the Income-tax Officer which were based on the so- called enquiries but regarding which no information whatever was imparted to the assessee himself. The Tribunal held that the assessments for the years 1944 to 1947 were out of Jurisdiction, that the Income from tin scrap business should be computed at Rs. 50,000/- for the year 1947-48 and Rs. 1,00,000/- for the year 1948-49 and that the income for the year 1949-50 had been correctly assessed. In the result therefore the appeals against the 1944-45, 1945-46 and 1946-47 assessments were allowed 'in toto', the appeals against the 1947-48 and 1948-49 assessments were allowed 'pro tanto' and the appeal against the 1949-50 assessment was dismissed. In dealing with the objection taken up by the assessee that he had not been afforded a reasonable opportunity of rebutting the various assumptions on which the assessment was based the Tribunal observed as follows: "The assessee contends that the tin scrap business was started after the communal disturbances in 1947..... The Income-tax Officer, on the other hand, found that the assessee had been supplying tin scrap for several past years to various factories in the jurisdiction of that officer. It is true that the assessee was not faced with this position or given an opportunity to explain the transactions which he had with the factories concerned.....";