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“best judgment assessment”

Assessment ProceduresSection 144Section 1441,400 judgments

The decision most relied on for best judgment assessment is Kachwala Gems v. JCIT (288 ITR 10), cited in 332 judgments on BharatTax.

Leading authorities on best judgment assessment

Kachwala Gems v. JCIT
288 ITR 10 · 2007 · Supreme Court
332
citing judgments

In a best judgment assessment, some guesswork is inherent, but the estimate must be fair and not arbitrary. Books of account can be rejected under Section 145(3) if the assessee fails to substantiate entries or prove the genuineness of transactions, leading to estimation of income.

Commissioner of Sales Tax v. H.M. Esufali H.M. Abdulali
90 ITR 271 · 1973 · Supreme Court
232
citing judgments

The Supreme Court established principles for best judgment assessments, stating that some guesswork is inevitable but the assessment must be bona fide, rational, and free from bias or capriciousness. An appellate authority cannot substitute its judgment for that of the Assessing Officer unless the AO's assessment is shown to be biased, irrational, vindictive, or capricious, especially when the assessee fails to provide proper accounts or counter-evidence.

CIT v. Gurubachhan Singh J. Juneja
302 ITR 63 · 2008 · High Court
147
citing judgments

When unaccounted receipts or suppressed sales are detected and books of account are rejected under Section 145(3), additions to income must be restricted to the profit element embedded in such transactions, not the entire transaction value. This profit element is to be estimated by considering the assessee's regular profit ratio as per books of account.

Man Mohan Sadani v. CIT
304 ITR 52 · 2008 · High Court
132
citing judgments

When assessing income from undisclosed or unrecorded sales, the entire sale proceeds cannot be added to the assessee's income; instead, only the net profit embedded in such unaccounted sales, determined by applying the assessee's net profit rate, should be taxed.

Brij Bhushan Lal Paraduman Kumar v. CIT
115 ITR 524 · 1978 · Supreme Court
113
citing judgments

The Supreme Court holds that an Assessing Officer, when making a best judgment assessment or estimating income, must act fairly, honestly, and rationally, basing the estimation on available material and avoiding arbitrary or capricious decisions. Adherence to natural justice principles is crucial during assessment proceedings.

CIT v. Laxminarain Badridas
5 ITR 170 · 1937 · Supreme Court
79
citing judgments

An income tax officer making a best judgment assessment must act honestly, not dishonestly, vindictively, or capriciously. They must make a fair estimate of the assessment, considering local knowledge, repute, and previous assessments.

State of Kerala v. C. Velukutty
60 ITR 239 · 1966 · Supreme Court
78
citing judgments

A best judgment assessment must be based on wisdom, truth, and legal principles, not arbitrary caprice. While it involves estimation and guesswork, this must have a reasonable nexus to available material and the case's circumstances.

Shankar Khandasari Sugar Mills v. CIT
193 ITR 669 · 1992 · High Court
64
citing judgments

Best judgment assessments under Section 144 must be a fair and rational estimation of income by the Assessing Officer, not capricious or arbitrary. Appellate authorities should accept clarificatory evidence to test the fairness of such assessments, even if produced for the first time.

Judgments citing best judgment assessment

High Voit Electicals P Ltd, Mumbai vs. Income Tax Officer Ward -1, Palghar

In the result, the appeal is dismissed

ITA 4465/MUM/2025[2013-14]Status: DisposedITAT Mumbai30 Jul 2026AY 2013-14

Bench: Shri Sandeep Gosain & Shri Omkareshwar Chidara

Section 142(1)Section 143(3)Section 147Section 250Section 271(1)(b)

assessed the total income of the appellant for A.Y.2013-14 that was determined at Rs.21,40,940/- and passed the assessment order under best judgment assessment u/s 144of the Income Tax Act, 1961. Since, the appellant has concealed the income, hence penalty proceeding was initiated by the AO issuing show cause

High Voit Electicals P Ltd, Mumbai vs. Income Tax Officer Ward -1, Palghar

In the result, the appeal is dismissed

ITA 4464/MUM/2025[2013-14]Status: DisposedITAT Mumbai30 Jul 2026AY 2013-14

Bench: Shri Sandeep Gosain & Shri Omkareshwar Chidara

Section 142(1)Section 143(3)Section 147Section 250Section 271(1)(b)

assessed the total income of the appellant for A.Y.2013-14 that was determined at Rs.21,40,940/- and passed the assessment order under best judgment assessment u/s 144of the Income Tax Act, 1961. Since, the appellant has concealed the income, hence penalty proceeding was initiated by the AO issuing show cause

High Voit Electicals P Ltd, Mumbai vs. Income Tax Officer Ward -1, Palghar

In the result, the appeal is dismissed

ITA 4463/MUM/2025[2013-14]Status: DisposedITAT Mumbai30 Jul 2026AY 2013-14

Bench: Shri Sandeep Gosain & Shri Omkareshwar Chidara

Section 142(1)Section 143(3)Section 147Section 250Section 271(1)(b)

assessed the total income of the appellant for A.Y.2013-14 that was determined at Rs.21,40,940/- and passed the assessment order under best judgment assessment u/s 144of the Income Tax Act, 1961. Since, the appellant has concealed the income, hence penalty proceeding was initiated by the AO issuing show cause

High Voit Electicals P Ltd, Mumbai vs. Income Tax Officer Ward -1, Palghar

In the result, the appeal is dismissed

ITA 4462/MUM/2025[2013-14]Status: DisposedITAT Mumbai30 Jul 2026AY 2013-14

Bench: Shri Sandeep Gosain & Shri Omkareshwar Chidara

Section 142(1)Section 143(3)Section 147Section 250Section 271(1)(b)

assessed the total income of the appellant for A.Y.2013-14 that was determined at Rs.21,40,940/- and passed the assessment order under best judgment assessment u/s 144of the Income Tax Act, 1961. Since, the appellant has concealed the income, hence penalty proceeding was initiated by the AO issuing show cause

Deputy Commissioner of Income Tax, Central Circle-II, Noida vs. Pacific Mining Products Pvt. Ltd., Delhi

Appeal is allowed for statistical purposes”

ITA 1984/DEL/2024[2013-14]Status: DisposedITAT Delhi27 Jul 2026AY 2013-14

Bench: Shri S Rifaur Rahman & Shri Sudhir Kumarita No.1983/Del/2024 Assessment Year- 2012-13 Ita No.1984/Del/2024 Assessment Year- 2013-14 Ita No.1985/Del/2024 Assessment Year- 2014-15 Ita No.1986/Del/2024 Assessment Year- 2015-16

For Appellant: N o n eFor Respondent: Shri Sumer Singh Meena, CIT DR

date of compliance was fixed on 12/06/2017. Simultaneously, a letter was written dated 03/07/2017 to the assessee to show cause as to why best judgment assessment under Section 144 of the Act may not be made in its case since the assessee has failed to cooperate & comply to the directions ... cooperative attitude of the assessee & failure to comply with the Direction under section 142(2A) to get the accounts audited entails a best judgment assessment under section 144 of the Act. In the given circumstances, there is no other alternative than to complete the assessment order ex-parte

Yuvradhani Agro & Developers Pvt Ltd, Yavatmal vs. ITO Ward-1, Yavatmal

In the result, the appeal of the assessee is allowed

ITA 47/NAG/2026[2017-18]Status: DisposedITAT Nagpur26 Mar 2026AY 2017-18

Bench: Dr.Manish Boradआयकर अपील सं. / Ita No.47/Nag/2026 Assessment Year : 2017-18 Yuvradhani Agro & Developers Vs. Income Tax Officer, Pvt Ltd. Ward-1, Yavatmal G.No 68 Ralegaon, Yavatmal 445402, Maharashtra Pan: Aaacy5622R Appellant Respondent

For Appellant: Ms.Alfiya RozieFor Respondent: Shri Surjit Kumar Saha
Section 144Section 148Section 69A

validly issued and served upon the assessee. However, the assessee remained non-compliant resulting into passing of 2 Yuvradhani Agro & Developers Pvt Ltd. Best Judgment assessment and addition of Rs.25.00 lakh made u/s.69A of the Act towards unexplained money. Thereafter assessee preferred appeal before ld.CIT(A) which was delayed

Jayeshkumar Kailashchandra Bhadada, Ahmedabad vs. The ITO, Ward-3(3)(5), Ahmedabad

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

ITA 2318/AHD/2025[2018-19]Status: DisposedITAT Ahmedabad26 Mar 2026AY 2018-19

Bench: Shri Tr Senthil Kumar & Shri Narendra Prasad Sinhaassessment Years: 2018-19

Section 147Section 148Section 148A

result of bogus transactions with M/s. Bright Corporation. The action of the appellant authority and the AO for passing the ex-parte best judgment assessment order is not according to law. 3. The opportunity to submit details in the case was not properly given and without giving a chance

Vineet Kumar, Dharamshala vs. Income Tax Officer, Dharmshala

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

ITA 1090/CHANDI/2025[2017-2018]Status: DisposedITAT Chandigarh19 Mar 2026AY 2017-2018

Bench: SHRI. LALIET KUMAR (Judicial Member)

For Appellant: NoneFor Respondent: Shri Dr. Ranjit Kaur, Addl. CIT, Sr. DR
Section 142(1)Section 144Section 147Section 148Section 148ASection 250(6)Section 69A

jurisdiction on account of alleged invalid issuance of notice under section 148, non-compliance of procedure prescribed under section 148A, improper invocation of best judgment assessment despite compliance, and failure of the authorities below to consider replies and evidences furnished by the assessee. 5. None appeared at the time

Step Logistics Private Limited, Raipur vs. Dy. Commissioner of Income Tax, Circle 1(1), Raipur

In the result, appeal of the assessee in ITA

ITA 636/RPR/2025[2017-18]Status: DisposedITAT Raipur19 Mar 2026AY 2017-18

Bench: Shri Partha Sarathi Chaudhury & Shri Avdhesh Kumar Mishraआयकर अपील सं. / Ita No.636/Rpr/2025 "नधा"रण वष" / Assessment Year : 2017-18 Step Logistics Private Limited A-1, Mahavir Gaushala Complex, K.K Road, Raipur (C.G.)-492 001 Pan: Aancs0382F

For Appellant: S/shri Praveen Khandelwal &For Respondent: Dr. Priyanka Patel, Sr. DR
Section 127Section 143(2)Section 143(3)Section 68

basis of the rejection appears to be best judgment of assessment done by him. The rejection of the books should precede the best judgment assessment. On facts, the Revenue has not been able to show any defect in the respondent's records which would warrant rejection of the books ... making a best judgment assessment. Thus, on facts the view taken by the Tribunal is a possible view. Therefore, no substantial question of law arises. Thus not entertained.” [Emphasis supplied] 21. The Division Bench of the Karnataka High Court in the case of CIT v. Anil Kumar

Susmita Sudhakar Ukarde, Chiplun vs. Income-Tax Officer, Ward, Ratnagiri

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

ITA 3118/PUN/2025[2016-17]Status: DisposedITAT Pune17 Mar 2026AY 2016-17

Bench: Dr.Manish Boradआयकर अपील सं. / Ita No.3118/Pun/2025 Assessment Year : 2016-17 Susmita Sudhakar Ukarde, Vs. Income Tax Officer, Z P Primary School, Ward Ratnagiri Pilawali, Vanagewadi, Jail Road, Ratnagiri Kalambat, Ratnagiri-415605 Maharashtra Pan : Aajpu4746Q Appellant Respondent

For Appellant: Shri Anup ShahaFor Respondent: Shri Dayanand Jawalikar
Section 147

ld.CIT(A) has dismissed the appeal being barred by limitation and also assessee could not appear before the ld. Assessing Officer resulting into Best Judgment assessment. Only prayer is made to afford one more opportunity to go before ld.Jurisdictional Assessing Officer and ld. DR supported the order of ld.CIT

Sasireka Boopathi, Thanjavur vs. Income Tax Officer, Thanjavur

In the result, the appeal filed by the Assessee stands Partly

ITA 4113/CHNY/2025[2019-2020]Status: DisposedITAT Chennai17 Mar 2026AY 2019-2020

Bench: Shri George George K, Vice- & Shri Inturi Rama Raoआयकर अपील सं. / Ita No.4113/Chny/2025 "नधा"रण वष" / Assessment Year: 2019-20 Sasireka Boopathi, Vs Income Tax Officer, 1/263, Vellalar Street, Thanjavur. Saliyamangalam, Papanasam, Thanjavur – 613504 Pan: Gpfpb2689J Appellant/ Assessee Respondent / Revenue Assessee By Shri Gokularaman – Ca Revenue By Ms. V Aswathy – Jcit Date Of Hearing 18/02/2026 Date Of Pronouncement 17/03/2026 आदेश/ Order Per Inturi Rama Rao, Am : This Appeal Filed By The Assessee Directed Against The Order Of Ld.Commissioner Of Income Tax(Appeal)[Nfac], Delhi Passed Under Section 250 Of The Income Tax Act, 1961 For The A.Y.2019-20 Dated 19.09.2025. The Assessee Raised The Following Grounds Of Appeal :

Section 139Section 142(1)Section 144Section 144BSection 147Section 148Section 148ASection 151ASection 250

notices issued u/s.142(1) of the Act. In the circumstances, the ITA No.4113/CHNY/2025 [A] Assessing Officer proceeded with framing best judgment assessment u/s.144 vide order dated 29.02.2024 passed u/s.147 read with section 144B of the Income Tax Act, 1961 at a total income of Rs.6,00,000/-. While doing

Ansari Pakkidakala, Belthangady vs. Income Tax Officer, Ward-1, Puttur

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

ITA 146/BANG/2025[2017-18]Status: DisposedITAT Bangalore17 Mar 2026AY 2017-18
Section 142(1)Section 144Section 249Section 264Section 44ASection 69A

income but the assessee failed to file the return. In the absence of response from the assessee, the AO proceeded to complete best judgment assessment as per section 144 of the Act. 4. The AO from the bank statement of the assessee observed that during the year the bank account

DCIT, Central Circle 1, Rajkot vs. Shri Deepak Mohanlal Purswani, Rajkot

ITA 665/RJT/2024[2022-23]Status: DisposedITAT Rajkot13 Mar 2026AY 2022-23

Bench: Dr. Arjun Lal Saini & Dr. Dinesh Mohan Sinhaआयकर अपील सं/.Ita No.630 & 631/Rjt/2024 निर्धारण वर्ष / Assessment Year: (2021-2022 & 2022-23) Hybrid Hearing Shree Deepak Mohanlal Puruswani बनाम The Dcit, Cc-1 Rajkot Nr. Maa Krupa, 4- Saurashtra Kala Vs. Aaykar Bhawan "Amruta Estate", Kendra Society, Opp. Nirmala Convent, Mg Road, Rajkot 360001, Kalawad Road, Rajkot-360001 (अपीलार्थी/Appellant) स्थायीलेखासं/. जीआइआरसं/.Pan No. : Ajvpp5139P (प्रत्यर्थी/Respondent) आयकर अपील सं/. Ita No.665/Rjt/2024 निर्धारण वर्ष / Assessment Year: (2022-23) The Dcit, Cc-1 Rajkot बनाम Shree Deepak Mohanlal Puruswani Aaykar Bhawan“Amruta Estate", 2Nd Vs. Nr. Maa Krupa, 4- Saurashtra Kala Floor Mg Road Kendra Society, Opp. Nirmala Rajkot 360001, Gujrat Convent, Kalawad Road, (अपीलार्थी/Appellant) स्थायीलेखासं/. जीआइआरसं/.Pan No. : Ajvpp5139P Rajkot-360001 (प्रत्यर्थी/Respondent) निर्धारितीकीओरसे/Assessee By : Shri Mehul Ranpura, Ld. Ar राजस्वकीओरसे/Revenue By : Shri Abhimanyu Singh Yadav, Ld. Sr. Dr सुनवाईकीतारीख / Date Of Hearing : 16/01/2026 घोषणाकीतारीख /Date Of Pronouncement : 13/03/2026 आदेश/Order Per, Bench: Captioned Appeals Filed By The Assessee & Revenue, Pertaining To

For Appellant: Shri Mehul Ranpura, Ld. ARFor Respondent: Shri Abhimanyu Singh Yadav, Ld. SR. DR
Section 143(3)Section 147Section 250

held that authorities concerned should try to make an honest and fair estimate of income even in a best judgment assessment and should not act totally arbitrarily. 1. Without prejudice to the above, on verification of the above stated data and relevant extract from the statements, it is not understood

Poreddy Sambasiva Reddy, Kadiri vs. ITO, Ward-1, Hindupur

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

ITA 1862/HYD/2025[2018-19]Status: DisposedITAT Hyderabad13 Mar 2026AY 2018-19

Bench: Shri Vijay Pal Rao & Shri Madhusudan Sawdiaआयकर अपीलसं./I.T.A. No.1862/Hyd/2025 ("नधा"रणवष"/ Assessment Year: 2018-19) Poreddy Sambasiva Reddy, Vs. Income Tax Officer, Kadiri. Ward-1, Pan: Bibpr4972G Hindupur. (अपीलाथ"/ Appellant) (""यथ"/ Respondent) करदाताका""त"न"ध"व/ : Shri Nvv Gopalal Krishna, Ca Assessee Represented By राज"वका""त"न"ध"व/ : Dr. Sachin Kumar, Sr.Ar Department Represented By सुनवाईसमा"तहोनेक""त"थ/ : 09/03/2026 Date Of Conclusion Of Hearing घोषणा क" तार"ख/ : 13/03/2026 Date Of Pronouncement Order Per Madhusudan Sawdia, A.M.: This Appeal Is Filed By Shri Poreddy Sambasiva Reddy, Kadiri (“The Assessee”), Feeling Aggrieved By The Order Passed By The Learned Commissioner Of Income Tax (Appeals), National Faceless Appeal Centre (Nfac), Delhi (“Ld. Cit(A)”) Dated 22/10/2025 For The Assessment Year (“A.Y.” 2018-19. Poreddy Sambasiva Reddy Vs. Ito 2. The Assessee Has Raised The Following Grounds Of Appeal:

Section 142(1)Section 144Section 147Section 148Section 250Section 69A

before drawing adverse conclusions. The impugned addition, made without corroboration OR ownership nexus, is arbitrary and unsustainable. 3. Improper Invocation of Section 144 (Best Judgment Assessment) The learned AO wrongly invoked section 144 despite absence of valid service OR effective communication of notices under section 142(1) and 148A

Income Tax Officer, Coimbatore vs. Sivakumar Sathyapriya, Coimbatore

ITA 4107/CHNY/2025[2017-18]Status: DisposedITAT Chennai13 Mar 2026AY 2017-18

Bench: Shri George George K, Vice- & Shri Inturi Rama Rao

Section 130Section 144Section 147Section 148Section 148ASection 151ASection 250

issued u/s.148 of the Act, nor the notices issued u/s.142(1) of the Act . In the circumstances, the Assessing Officer proceeded with framing best judgment assessment u/s.144 vide order dated 17.03.2025 passed u/s.147 read with section 144B of the Income Tax Act, 1961 at a total income of Rs.13

C 2062 Kaveripakkam Primary Agricultural Coop Crdeit Society, Vellore vs. ITO, Ward-1, Vellore

ITA 3998/CHNY/2025[2019-20]Status: DisposedITAT Chennai13 Mar 2026AY 2019-20

Bench: Shri Inturi Rama Rao & Shri Manu Kumar Giriआयकर अपील सं. / Ita No.3998/Chny/2025 िनधा"रण वष" / Assessment Year: 2019-20 C 2062 Kaveripakkam Primary Vs Income-Tax Officer, Agricultural Coop Credit Society, Ward-1, No.2, Barracks 320, Theradi Street, Cross Street, Officers Kaveripakkam, Arakkonam, Lane, Vellore-632001. Vellore – 632505. Pan: Aahfc5813C Appellant/ Assessee Respondent /Revenue Assessee By Shri J. Saravanan – Advocate Revenue By Ms. R Anitha, Addl.Cit(Dr) Date Of Hearing 18/02/2026 Date Of Pronouncement 13/03/2026 आदेश/ Order Per Inturi Rama Rao, Am : This Appeal Filed By The Assessee Directed Against The Order Of Ld.Commissioner Of Income Tax(Appeal)[Nfac], Delhi Passed Under Section 250 Of The Income Tax Act, 1961 For The A.Y.2019-20 Dated 08.08.2025. The Assesseeraised The Following Grounds Of Appeal :

Section 139Section 142(1)Section 144Section 144BSection 147Section 148Section 148ASection 151ASection 250Section 69A

issued u/s.148 of the Act, nor the notices issued u/s.142(1) of the Act. In the circumstances, the Assessing Officer proceeded with framing best judgment assessment u/s.144 vide order dated 11.03.2024 passed u/s.147 r.w.s 144 read with section 144B of ITA No.3998/CHNY/2025 [A] the Income

S. Balasubramanian, Pollachi vs. ITO, Ncw-1(7), Madurai

In the result, all the appeals filed by the assessee are allowed for statistical purposes

ITA 3726/CHNY/2025[2019-20]Status: DisposedITAT Chennai13 Mar 2026AY 2019-20

Bench: Shri Aby T. Varkey & Ms. Padmavathy. S

For Appellant: Mr. A. Arjunaraj C.A ""For Respondent: Dr.M.D. Vijay Kumar, JCIT
Section 144Section 148Section 270ASection 271ASection 271BSection 272A(1)(d)

assessment proceedings going on before the Assessing Officer (AO) which resulted in the AO passing ex-parte order u/s.144 of the Act (best judgment assessment) for both the assessment years. Only when the recovery proceedings were initiated against the assessee and the assessee was alerted by a telephone call from

S Balasubramanain, Pollachi vs. ITO, Ncw-1(7), Madurai

In the result, all the appeals filed by the assessee are allowed for statistical purposes

ITA 3725/CHNY/2025[2019-20]Status: DisposedITAT Chennai13 Mar 2026AY 2019-20

Bench: Shri Aby T. Varkey & Ms. Padmavathy. S

For Appellant: Mr. A. Arjunaraj C.A ""For Respondent: Dr.M.D. Vijay Kumar, JCIT
Section 144Section 148Section 270ASection 271ASection 271BSection 272A(1)(d)

assessment proceedings going on before the Assessing Officer (AO) which resulted in the AO passing ex-parte order u/s.144 of the Act (best judgment assessment) for both the assessment years. Only when the recovery proceedings were initiated against the assessee and the assessee was alerted by a telephone call from

S Balasubramanian, Pollachi vs. ITO, Ncw-1(7), Madurai

In the result, all the appeals filed by the assessee are allowed for statistical purposes

ITA 3724/CHNY/2025[2019-20]Status: DisposedITAT Chennai13 Mar 2026AY 2019-20

Bench: Shri Aby T. Varkey & Ms. Padmavathy. S

For Appellant: Mr. A. Arjunaraj C.A ""For Respondent: Dr.M.D. Vijay Kumar, JCIT
Section 144Section 148Section 270ASection 271ASection 271BSection 272A(1)(d)

assessment proceedings going on before the Assessing Officer (AO) which resulted in the AO passing ex-parte order u/s.144 of the Act (best judgment assessment) for both the assessment years. Only when the recovery proceedings were initiated against the assessee and the assessee was alerted by a telephone call from

S Balasubramanian, Pollachi vs. ITO, Ncw-1(7), Madurai

In the result, all the appeals filed by the assessee are allowed for statistical purposes

ITA 3723/CHNY/2025[2019-20]Status: DisposedITAT Chennai13 Mar 2026AY 2019-20

Bench: Shri Aby T. Varkey & Ms. Padmavathy. S

For Appellant: Mr. A. Arjunaraj C.A ""For Respondent: Dr.M.D. Vijay Kumar, JCIT
Section 144Section 148Section 270ASection 271ASection 271BSection 272A(1)(d)

assessment proceedings going on before the Assessing Officer (AO) which resulted in the AO passing ex-parte order u/s.144 of the Act (best judgment assessment) for both the assessment years. Only when the recovery proceedings were initiated against the assessee and the assessee was alerted by a telephone call from