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Income-tax Reference No. -520 of 1972, decided on 27th September, 1983.

---S.23(3)--Self-assessment scheme--Return filed by assessee under self-assessment scheme--I.T.O. resorting to assessment under S.23(3) of Income-tax Act without pointing out that provisions of said scheme were not complied with by assessee--Recourse to assessment under S.23(3) by I.T.O., held, was not justified and Income-tax Officer directed to accept return of income filed by assessee.

Nasrullah Awan for Appellant.

Respondent in person

Date of hearing: 27th September 1983.

- The department has filed application under section 66(1) of the Income-tax Act raising the following questions:--

"(1) Whether on the facts and in the circumstances of the case the Income-tax Appellate Tribunal was justified in directing the Income-tax Officer to accept the return of income filed under self-assessment scheme when the said scheme is no bar for the Income-tax Officer to proceed under normal law and discretion is vested in the Income-tax Officer by rule 46 of the Income-tax Rules regarding self-assessment procedure

(2) Whether on the facts and in the circumstances of the case the Income-tax Appellate Tribunal was justified in directing the income-tax Officer to accept the return of income filed under self-assessment scheme when no books of accounts were maintained. by the assessee "

The respondent derives income from the property and from horse racing. For the assessment year 1970-71 the assessee filed his return declaring the total income of Rs.22,993 under the self-assessment scheme. The Income-tax Officer, however proceeded under section 23(3) and computed the total income of Rs.35,600. The respondent filed an appeal before the learned Income-tax Appellate Tribunal, who allowed it, and remanded the case back to the Income-tax Officer for passing a fresh order on the basis of the return filed under self-assessment scheme and if he wanted to reject the return income he must give good reason for it.

The admitted position is that the respondent had filed return under the self-assessment scheme. In his order the Income-tax Officer has nowhere pointed out that the provision of this scheme have not been complied with by the respondent. In these circumstances, the Income-tax Officer was not justified in resorting to assessment under section 23(3) of the Income-tax Act. This legal position is not disputed by the learned counsel for the department. We, therefore, answer both the questions in the affirmative.

Reference answered.

M.B.A. Questions answered in affirmative.

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