Best Judgement assessment and the remedies available against best judgement assessment-

TANMOY MUKHERJI INSTITUTE OF JURIDICAL SCIENCE

Dr. Tanmoy Mukherji

Advocate

 

Best Judgement assessment and the remedies available against best judgement assessment-

Tanmoy Mukherji

Advocate

Best Judgement Assessment means and assessment made by the Assessing Officer (AO) based on available information and evidence when the assessee fails to comply with the requirements of the Income tax Act.

Sec 144 empowers the AO to estimate income and determine tax liability according to the best judgement.

Diagram-

Statutory Provision-

Sec 144 of Income Tax Act, 1961

Circumstances for application-

Procedure of Best Judgment Assessment-

Principles governing Best Judgment Assessment-

The Assessor must be-

→Fair

→Rational

→Based on evidence

→Free from arbitrariness

→In confirmation with natural justice

→Honest

Sources used by AO-

The AO may rely upon:

Source	Example
Previous returns	Past income records
Bank statements	Credits & Transactions
GST Data	Business turnover
TDS information	Form 26 AS
Market Data	Comparable profits
Third party information	Information from customers / suppliers.

Reference Cases-

Comparative Chart-

Particulars	Self-Assessment	Regular Assessment	Best Judgement Assessment
Provisions	Sec 140 A	Sec 143(3)	Sec 144
Who calculates tax	Assessee	A.O.	A.O.
Cooperation required	Yes	Yes	No
Hearing opportunity	Not required	Required	Required
Basis	Return filed	Scrutiny	Available materials.

 

Remedies against Best Judgment Assessment-

Appeal before Commissioner-

Appeal before ITAT (Income Tax Appellate Tribunal)-

If dissatisfied with order of commissioner (Appeals).

Appeal before High Court-

Section 260A- Permitted only on a substantial question of law.

Appeal before Supreme Court-

Final appellate remedy.

Rectification-

Section 154- Where there is an apparent mistake on record.

Example- Calculation errors, Clerical mistakes.

Revision by Commissioner-

Section 264- Commissioner may revise assessment to provide relief to assessee.

Flow Diagram-

Advantages-

Disadvantages-