Patna High Court
Makhan Mal Ram Chand vs Commissioner Of Income Tax, Punjab. on 18 March, 1941
JUDGMENT
This is an application made by Messrs. Makhan Mal Ram Chand, shop keepers of the Peshawar City, for an order to require the Commissioner of Income-tax to state a case under Section 66 of the Act.
The facts of this case are that until 1936-37 the accounts as kept by the petitioners were accepted as the basis of an assessment. In the following year the Income-tax Officer refused to accept them and applied the proviso of Section 13 of the Act. An appeal to the Assistant Commissioner of Income-tax failed. The reasons which were given by the Income-tax authorities for refusing to accept the account books for this year were that the average rate of profits on the sales worked out at a much lower rate than that generally obtained in that particular line of business; that there was no stock account; that the cash sales were without details and not supported by any vouchers; that the classification of the sales made at the close of the day was more or less arbitrary and there was some doubt as to whether the kachcha rokar was regularly maintained. The latter statement was made largely on the fact that when surprise inspections on two occasions were made the entries of the Kachcha rokar had not been transferred to the packcka rokar.
Now it appears to me that no question of law whatsoever is involved in this case. The Income-tax Office is empowered to apply the proviso of Section 13 of the Act if the method employed for accounting by the assessee is in the opinion of the Income-tax Officer such that the income, profits and gains cannot properly be deduced therefrom. The most recent published authority on the case is reported as Ganga Ram Balmokand v. Commissioner of Income-tax, Punjab (1937) 5 I.T.R. 464; A.I.R. 1937 Lah. 721. In that case it was held that it was a matter entirely for the Income-tax Officer to determine whether the accounts kept by the assessee were such that the income, profits and gains could not be properly deduced therefrom and that the High Court would not interfere with any finding of an Income-tax Officer on such a point unless the decision had been arbitrary or capricious. In the present case reasons have been given by the Income-tax Officer and the Income-tax Assistant Commissioner as to why they are of opinion that the proviso to Section 13 should be applied.
I can find no question of law involved in this case and decline to call upon the Commissioner of Income-tax to state a case. The petition is dismissed with costs. Pleaders fee Rs. 30.
Application dismissed.