State of Kerala v. C. Velukutty

60 ITR 239Supreme Court of India1966#1467 most cited

What is State of Kerala v. C. Velukutty authority for?

An assessment, including a best judgment assessment, must be conducted rationally, based on available material, and after collecting all necessary information. It is essential to adhere to the principles of natural justice by providing the assessee an effective and adequate opportunity of being heard.

78

judgments rely on this decision, according to BharatTax’s citation analysis of 292,668 Indian tax judgments — from 2015 to 2026.

Also referred to as

State of Kerala v. C. Velukutty · 60 ITR 239 · best judgment assessment · natural justice · opportunity of being heard · rational assessment · Assessing Officer duties · assessment procedure · rejection of books of account · Section 144 Income Tax Act

Sections most often in play

Section 250Section 271(1)(c)Section 271FSection 40A(3)Section 115BBESection 143(3)Section 144Section 194-IA

Issues it is cited on

section 69dsection 147(1)trade creditorsbogus share capitalsection 80a(5)section 153a(1)(b)best judgment assessmentsanctioning authoritysection 69bmistake apparent from recordrejection of books of accountsection 271f

Judgments citing State of Kerala v. C. Velukutty

SHRI ASHOKBHAI BHIMAJIBHAI PARMAR,VILLAGE RAJULA DISTRICT AMRELI vs. THE ITO WARD 3 (1) (4) AMRELI, AMRELI

In the result, all these four appeals are allowed for statistical purposes

ITA 634/RJT/2025[2011-12]Status: DisposedITAT Rajkot19 Jan 2026AY 2011-12

Bench: Dr. Arjun Lal Saini.

For Appellant: Written SubmissionFor Respondent: Shri Gopi Nath Chaubey, Sr. (DR)
Section 250Section 271(1)(c)Section 271F

…stances of each case. Though the section provides for a summary method because of the default of the assessee, it does not enable the assessing authority to function capriciously without regard to the available material - State of Kerala V/s. Velukutty [1966] 60 ITR 239 (SC). Estimate must be honest and fair. The authority making a best judgment assessee must make an honest and fair estimate of the income of the assessee and though arbitrariness cannot be avoided in such an estimate, the same must not be capricious but should have a reasonable nexus to the available material and the circumstances of the case Brij…

SHRI ASHOKBHAI BHIMAJIBHAI PARMAR,VILLAGE RAJULA DISTRICT AMRELI vs. THE ITO WARD 3 (1) (4) AMRELI, AMRELI

In the result, all these four appeals are allowed for statistical purposes

ITA 633/RJT/2025[2010-11]Status: DisposedITAT Rajkot19 Jan 2026AY 2010-11

Bench: Dr. Arjun Lal Saini.

For Appellant: Written SubmissionFor Respondent: Shri Gopi Nath Chaubey, Sr. (DR)
Section 250Section 271(1)(c)Section 271F

…stances of each case. Though the section provides for a summary method because of the default of the assessee, it does not enable the assessing authority to function capriciously without regard to the available material - State of Kerala V/s. Velukutty [1966] 60 ITR 239 (SC). Estimate must be honest and fair. The authority making a best judgment assessee must make an honest and fair estimate of the income of the assessee and though arbitrariness cannot be avoided in such an estimate, the same must not be capricious but should have a reasonable nexus to the available material and the circumstances of the case Brij…

SHRI ASHOKBHAI BHIMAJIBHAI PARMAR,VILLAGE RAJULA DISTRICT AMRELI vs. THE ITO WARD 3 (1) (4) AMRELI, AMRELI

In the result, all these four appeals are allowed for statistical purposes

ITA 632/RJT/2025[2010-11]Status: DisposedITAT Rajkot19 Jan 2026AY 2010-11

Bench: Dr. Arjun Lal Saini.

For Appellant: Written SubmissionFor Respondent: Shri Gopi Nath Chaubey, Sr. (DR)
Section 250Section 271(1)(c)Section 271F

…stances of each case. Though the section provides for a summary method because of the default of the assessee, it does not enable the assessing authority to function capriciously without regard to the available material - State of Kerala V/s. Velukutty [1966] 60 ITR 239 (SC). Estimate must be honest and fair. The authority making a best judgment assessee must make an honest and fair estimate of the income of the assessee and though arbitrariness cannot be avoided in such an estimate, the same must not be capricious but should have a reasonable nexus to the available material and the circumstances of the case Brij…

SHRI ASHOKBHAI BHIMAJIBHAI PARMAR,RAJKOT vs. THE ITO WARD 3 (1) (4), AMRELI

In the result, all these four appeals are allowed for statistical purposes

ITA 580/RJT/2025[2012-13]Status: DisposedITAT Rajkot19 Jan 2026AY 2012-13

Bench: Dr. Arjun Lal Saini.

For Appellant: Written SubmissionFor Respondent: Shri Gopi Nath Chaubey, Sr. (DR)
Section 250Section 271(1)(c)Section 271F

…stances of each case. Though the section provides for a summary method because of the default of the assessee, it does not enable the assessing authority to function capriciously without regard to the available material - State of Kerala V/s. Velukutty [1966] 60 ITR 239 (SC). Estimate must be honest and fair. The authority making a best judgment assessee must make an honest and fair estimate of the income of the assessee and though arbitrariness cannot be avoided in such an estimate, the same must not be capricious but should have a reasonable nexus to the available material and the circumstances of the case Brij…

HARDAYAL MILK PRODUCTS PRIVATE LIMITED,SHIKOHABAD vs. DCIT, CIRCLE-2(2)(1), FIROZABAD, FIROZABAD

In the result, the appeal preferred by the assessee is partly

ITA 342/AGR/2025[2013-14]Status: DisposedITAT Agra29 Dec 2025AY 2013-14

Bench: : Shri S. Rifaur Rahman & Shri Sunil Kumar Singhassessment Year: 2013-14

Section 143(2)Section 145(3)

…n the best judgment assessment an honest and fair estimate of the income should be made and the same must not be capricious but should have a reasonable nexus to the available material and the circumstances of the case. State of Kerala vs. C. Velukutty (1966) 60 ITR 239 (SC) it was held that though there is an element of guesswork in a ‘best judgment assessment’, it should not be a wild one, but should have a reasonable nexus to the available material and the circumstances of each case. Though the section provides for a summary method because of the default of the assessee, it does not enable the assessing author…

RMS KARAMCHARI BACHAT AND SAKH SAHAKARI SAMITI LIMITED JAIPUR,JAIPUR vs. ITO WARD-1(2), JAIPUR, JAIPUR

In the result, the appeals of the assessee are allowed

ITA 246/JPR/2025[2016-17]Status: DisposedITAT Jaipur13 Oct 2025AY 2016-17
For Appellant: Shri Deepak Sharma, C.AFor Respondent: Smt. Anita Rinesh, JCIT
Section 147Section 250

…tever\nmaterial is available on record or which the AO could and should have collected. Kindly\nrefer Brij Bhushan Lal Pradyuman Kumar v. CIT (1978) 115 ITR 524, CITv.\nLaxmi Naraian Badri Das (1937) 5 ITR 170 (PC) and State of Kerala v. C. Valu\nKutty (1966) 60 ITR 239 (SC) and also 203 ITR 630 (Cal). However, the AO has not\nconfirmed to these principles.\nThus, it is a clear case of violation of the principals of natural justice hence, the impugned\nassessment kindly be restored to the file of the AO for providing an effective and\nadequate opportunity of being heard and to decide all the issues judiciously.\n…

RMS KARAMCHARI BACHAT AND SAKH SAHAKARI SAMITI LIMITED JAIPUR,JAIPUR vs. ITO WARD-1(2), JAIPUR, JAIPUR

In the result, the appeals of the assessee are allowed

ITA 245/JPR/2025[2015-16]Status: DisposedITAT Jaipur13 Oct 2025AY 2015-16
For Appellant: Shri Deepak Sharma, C.AFor Respondent: Smt. Anita Rinesh, JCIT
Section 147Section 250

…tever\nmaterial is available on record or which the AO could and should have collected. Kindly\nrefer Brij Bhushan Lal Pradyuman Kumar v. CIT (1978) 115 ITR 524, CITv.\nLaxmi Naraian Badri Das (1937) 5 ITR 170 (PC) and State of Kerala v. C. Valu\nKutty (1966) 60 ITR 239 (SC) and also 203 ITR 630 (Cal). However, the AO has not\nconfirmed to these principles.\nThus, it is a clear case of violation of the principals of natural justice hence, the impugned\nassessment kindly be restored to the file of the AO for providing an effective and\nadequate opportunity of being heard and to decide all the issues judiciously.\n…

RMS KARAMCHARI BACHAT AND SAKH SAHAKARI SAMITI LIMITED JAIPUR,JAIPUR vs. ITO, WARD-1(2), JAIPUR, JAIPUR

In the result, the appeals of the assessee are allowed

ITA 244/JPR/2025[2014-15]Status: DisposedITAT Jaipur13 Oct 2025AY 2014-15
For Appellant: Shri Deepak Sharma, C.AFor Respondent: Smt. Anita Rinesh, JCIT
Section 147Section 250

…tever\nmaterial is available on record or which the AO could and should have collected. Kindly\nrefer Brij Bhushan Lal Pradyuman Kumar v. CIT (1978) 115 ITR 524, CITv.\nLaxmi Naraian Badri Das (1937) 5 ITR 170 (PC) and State of Kerala v. C. Valu\nKutty (1966) 60 ITR 239 (SC) and also 203 ITR 630 (Cal). However, the AO has not\nconfirmed to these principles.\nThus, it is a clear case of violation of the principals of natural justice hence, the impugned\nassessment kindly be restored to the file of the AO for providing an effective and\nadequate opportunity of being heard and to decide all the issues judiciously.\n…

RMS KARAMCHARI BACHAT AND SAKH SAHAKARI SAMITI LIMITED JAIPUR,JAIPUR vs. ITO WARD-1(2), JAIPUR, JAIPUR

In the result, the appeals of the assessee are allowed

ITA 243/JPR/2025[2013-14]Status: DisposedITAT Jaipur13 Oct 2025AY 2013-14
For Appellant: Shri Deepak Sharma, C.AFor Respondent: Smt. Anita Rinesh, JCIT
Section 147Section 250

…ever\nmaterial is available on record or which the AO could and should have collected. Kindly\nrefer Brij Bhushan Lal Pradyuman Kumar v. CIT (1978) 115 ITR 524, CIT v.\nLaxmi Naraian Badri Das (1937) 5 ITR 170 (PC) and State of Kerala v. C. Valu\nKutty (1966) 60 ITR 239 (SC) and also 203 ITR 630 (Cal). However, the AO has not\nconfirmed to these principles.\n\nThus, it is a clear case of violation of the principals of natural justice hence, the impugned\nassessment kindly be restored to the file of the AO for providing an effective and\nadequate opportunity of being heard and to decide all the issues judiciously.…

SEEMA SRIVASTAVA,PATNA vs. ITO,DC/AC-6, PATNA, PATNA

In the result, the appeal is dismissed

ITA 715/PAT/2024[2017-18]Status: DisposedITAT Patna06 Jun 2025AY 2017-18

Bench: Shri George Mathan & Shri Rakesh Mishra

Section 115BSection 142(1)Section 143(2)Section 143(3)Section 144Section 250Section 250(2)Section 48Section 54Section 54F

…claim that exemption. Accordingly, it is claimed that the AO's action was arbitrary, illegal and against provisions of law. She has relied on various case laws including the decision of the Supreme Court in the case of State of Kerala Vs. C. Velukutty (1966) 60 ITR 239 (SC) and Hukumchand Mills Ltd. Vs. State of Madhya Pradesh (1964) 52 ITR 583 (SC). 6.1.3 I have considered the submission carefully. The AO has referred to the issue in para 7 mentioning that "the assessee did not sell a residential house, therefore, the claim of exemption u/s 54 was not correct". The AO has observed that it was sale of asset othe…

PREM PRASAD,MALDA vs. ITO, WARD-3(2), MALDA

In the result, the appeal of the assessee is allowed for statistical purposes

ITA 12/KOL/2024[2017-18]Status: DisposedITAT Kolkata23 Jul 2024AY 2017-18

Bench: Shri Sanjay Garg & Shri Rakesh Mishraassessment Year: 2017-18

For Appellant: Shri Miraj D. Shah, ARFor Respondent: Shri P. P. Barman, Addl. CIT, Sr. DR
Section 143Section 143(3)Section 250

…IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH KOLKATA BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND SHRI RAKESH MISHRA, ACCOUNTANT MEMBER Assessment Year: 2017-18 Prem Prasad Income Tax Officer, Ward-3(2), Tulshihatta, PS. Harischan- Malda Vs. drapur, Malda, West Bengal – 732140. (PAN: APNPP7328E) (Appellant) (Respondent) Present for: Appellant by : Shri Miraj D. Shah, AR Respondent by : Shri P. P. Barman, Addl. CIT, Sr. DR Date of Hearing : 01.05.2024 Date of Pronouncement : 23.07.2024 O R D E R PER RAKESH MISHRA, ACCOUNTANT MEMBER: This appeal filed by the assessee is against the order of the Ld. Commissioner…

MASUDAN TANTI,BHAGALPUR vs. CIT, NFAC, DELHI

In the result, the appeal of the assessee is allowed for statistical purposes

ITA 29/PAT/2023[2013-14]Status: DisposedITAT Patna22 Jul 2024AY 2013-14

Bench: Shri Sanjay Garg & Shri Rakesh Mishraassessment Year: 2013-14

For Appellant: Shri R. N. Bedi, CAFor Respondent: Dr. Lalita Kumari, Sr. DR
Section 142(1)Section 147Section 148Section 250Section 44

…riness cannot be avoided in such estimate the same must not be capricious but should have a reasonable nexus to the available material and the circumstances of the case. 9 MasudanTanti, AY: 2013-14 Also, in the case of State of Kerala v. C. Velukutty [1966] 60 ITR 239 (SC) it has been held that Under section 12(2)(b ) of the Act, power is conferred on the assessing authority in the circumstances mentioned thereunder to assess the dealer to the best of his judgment. The limits of the power are implicit in the expression "best of his judgment". Judgment is a faculty to decide matters with wisdom truly and legally…

JHUNJHUNBALAJI MOTORS PVT.LTD.,JHUNJHUNU vs. ACIT CIRCLE-JHUNJHUNU, JHUNJHUNU

ITA 344/JPR/2024[2014-15]Status: DisposedITAT Jaipur10 Jul 2024AY 2014-15
For Appellant: Sh. Anil Kumar Sharma (CA)For Respondent: Sh. A. S. Nehra (Addl. CIT)
Section 133(6)Section 142(1)Section 144Section 148Section 151(2)

…ertinent to note that case was re- opened as there was cash deposit of Rs 3,87,07,178/- in the bank account. Therefore, there exists a reasonable possibility that the cash sale to have been accounted for. In the case of State of Kerala vs C. Velukutty [(1966) 60 ITR 239 (SC)), Justice J Subba Rao, observed. "The limits of the power are implicit in the expression…

JHUNJHUNBALJI MOTORS PVT.LTD.,JHUNJHUNU vs. ACIT, CIRCLE-JHUNJHUNU, JHUNJHUNU

ITA 343/JPR/2024[2013-14]Status: DisposedITAT Jaipur10 Jul 2024AY 2013-14
For Appellant: Sh. Anil Kumar Sharma (CA)For Respondent: Sh. A. S. Nehra (Addl. CIT)
Section 133(6)Section 142(1)Section 144Section 148Section 151(2)

…ertinent to note that case was re- opened as there was cash deposit of Rs 3,87,07,178/- in the bank account. Therefore, there exists a reasonable possibility that the cash sale to have been accounted for. In the case of State of Kerala vs C. Velukutty [(1966) 60 ITR 239 (SC)), Justice J Subba Rao, observed. "The limits of the power are implicit in the expression…

LOKESH GHIYA,NAGDA vs. INCOME TAX OFFICER, UJJAIN

In the result, appeal of the assessee is partly allowed

ITA 504/IND/2023[2012-13]Status: DisposedITAT Indore16 Apr 2024AY 2012-13

Bench: Shri Vijay Pal Rao & Shri B.M. Biyanilokesh Ghiya Ito 27, Government Colony Nagda Ujjain Vs. M.P. (Appellant / Assessee) (Respondent/ Revenue) Pan: Aoipg2695D Assessee By Shri Amit Choudhary Ar Revenue By Shri Ashish Porwal, Sr. Dr Date Of Hearing 09.04.2024 Date Of Pronouncement 16.04.2024

Section 139Section 144Section 147Section 148Section 44A

…2 of 7 ITANo.504/Ind/2023 Lokesh Ghiya (ii) Triyogi Narayan Singh Vs. Commissioner of Income- tax-X, Kolkata* [2015] 60 taxmann.com 351 (Calcutta) (iii) Dhakeswari Cotton Mills Ltd vs CIT (1954) 26 ITR 775 (SC), (iv) State of Kerala Vs. C. Velukutty [1966] 60 ITR 239 (SC) (v) V.B. Gadkari Vs. ITO (1985) 59 STC 362, 364 (M.P.) vi) Shankar Khadsari Sugar Mills Vs. CIT 193 ITR 669 (Kar.) 1992 ( 3. On the other hand, Ld. DR has submitted that the assessee has not filed any return of income u/s 139 of the Act nor in response to notice issued by the AO u/s 148 of the Act. Therefore, the contention of the assessee c…

DCIT, CC-2, JAIPUR vs. SHRI JITENDRA KUMAR AGARWAL, JAIPUR

In the result, appeal of the assessee is dismissed and that of the revenue is also stands dismissed

ITA 181/JPR/2020[2017-18]Status: DisposedITAT Jaipur07 Jun 2023AY 2017-18

Bench: SHRI SANDEEP GOSAIN (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

For Appellant: Sh. Manish Agarwal (CA)For Respondent: Sh. Sanjay Dhariwal (CIT) &
Section 132Section 143Section 143(3)Section 145(3)Section 68

…and all other matters which he thinks will assist him in arriving at a fair and proper estimate; and though there must necessarily be guesswork in the matter, it must be honest guesswork. In that sense, too, the assessment must be, to some extent, arbitrary. 60 ITR 239 (SC) State of Kerala V/s Velukutty: Shri Jitendra Kumar Agarwal vs. DCIT The limits of the power are implicit in the expression ‘best of his judgment’. Judgment is a faculty to decide matters with wisdom truly and legally. Judgement does not depend upon the arbitrary caprice of a judge, but on settled and invariable principles of justice. Though…

DCIT, CC-2, JAIPUR vs. M/S. ROYAL JEWELLERS, JAIPUR

The appeal of the assessee is partly allowed and that of the revenue stands dismissed

ITA 177/JPR/2020[2017-18]Status: DisposedITAT Jaipur07 Jun 2023AY 2017-18

Bench: SHRI SANDEEP GOSAIN (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

For Appellant: Sh. Manish Agarwal (CA)For Respondent: Sh. Sanjay Dhariwal (CIT) &
Section 132Section 143Section 143(3)Section 145(3)Section 68

…and all other matters which he thinks will assist him in arriving at a fair and proper estimate; and though there must necessarily be guesswork in the matter, it must be honest guesswork. In that sense, too, the assessment must be, to some extent, arbitrary. 60 ITR 239 (SC) State of Kerala V/s Velukutty: The limits of the power are implicit in the expression ‘best of his judgment’. Judgment is a faculty to decide matters with wisdom truly and legally. Judgement does not depend upon the arbitrary caprice of a judge, but on settled and invariable principles of justice. Though there is an element of guesswork in a…

DCIT, CC-2, JAIPUR vs. M/S. ROYAL JEWELLERS, JAIPUR

In the result, appeal of the assessee in ITA No

ITA 176/JPR/2020[2016-17]Status: DisposedITAT Jaipur07 Jun 2023AY 2016-17

Bench: SHRI SANDEEP GOSAIN (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

For Appellant: Sh. Manish Agarwal (CA)For Respondent: Sh. Sanjay Dhariwal(CIT)&
Section 143Section 143(3)Section 145(3)

…and all other matters which he thinks will assist him in arriving at a fair and proper estimate; and though there must necessarily be guesswork in the matter, it must be honest guesswork. In that sense, too, the assessment must be, to some extent, arbitrary. 60 ITR 239 (SC) State of Kerala V/s Velukutty: The limits of the power are implicit in the expression ‘best of his judgment’. Judgment is a faculty to decide matters with wisdom truly and legally. Judgement does not depend upon the arbitrary caprice of a judge, but on settled and invariable principles of justice. Though there is an element of guesswork in a…

DCIT, CC-2, JAIPUR vs. M/S. ROYAL JEWELLERS, JAIPUR

In the result, appeal of the assessee in ITA No

ITA 175/JPR/2020[2015-16]Status: DisposedITAT Jaipur07 Jun 2023AY 2015-16

Bench: SHRI SANDEEP GOSAIN (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

For Appellant: Sh. Manish Agarwal (CA)For Respondent: Sh. Sanjay Dhariwal(CIT)&
Section 143Section 143(3)Section 145(3)

…and all other matters which he thinks will assist him in arriving at a fair and proper estimate; and though there must necessarily be guesswork in the matter, it must be honest guesswork. In that sense, too, the assessment must be, to some extent, arbitrary. 60 ITR 239 (SC) State of Kerala V/s Velukutty: The limits of the power are implicit in the expression ‘best of his judgment’. Judgment is a faculty to decide matters with wisdom truly and legally. Judgement does not depend upon the arbitrary caprice of a judge, but on settled and invariable principles of justice. Though there is an element of guesswork in a…

DCIT, CC-2, JAIPUR vs. M/S. ROYAL JEWELLERS, JAIPUR

In the result, appeal of the assessee in ITA No

ITA 174/JPR/2020[2014-15]Status: DisposedITAT Jaipur07 Jun 2023AY 2014-15

Bench: SHRI SANDEEP GOSAIN (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

For Appellant: Sh. Manish Agarwal (CA)For Respondent: Sh. Sanjay Dhariwal(CIT)&
Section 143Section 143(3)Section 145(3)

…and all other matters which he thinks will assist him in arriving at a fair and proper estimate; and though there must necessarily be guesswork in the matter, it must be honest guesswork. In that sense, too, the assessment must be, to some extent, arbitrary. 60 ITR 239 (SC) State of Kerala V/s Velukutty: The limits of the power are implicit in the expression ‘best of his judgment’. Judgment is a faculty to decide matters with wisdom truly and legally. Judgement does not depend upon the arbitrary caprice of a judge, but on settled and invariable principles of justice. Though there is an element of guesswork in a…

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