“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

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

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

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

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 3722/CHNY/2025[2018-19]Status: DisposedITAT Chennai13 Mar 2026AY 2018-19

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 3721/CHNY/2025[2018-19]Status: DisposedITAT Chennai13 Mar 2026AY 2018-19

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)

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 3720/CHNY/2025[2018-19]Status: DisposedITAT Chennai13 Mar 2026AY 2018-19

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)

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 3719/CHNY/2025[2018-19]Status: DisposedITAT Chennai13 Mar 2026AY 2018-19

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)

Income Tax Officer, Non Corporate Ward 22(1), Chennai vs. Ezhumalai, Thirukazhukundram

ITA 4108/CHNY/2025[2019-20]Status: DisposedITAT Chennai12 Mar 2026AY 2019-20

Bench: Shri George George K, Vice- & Shri Inturi Rama Raoआयकर अपील सं. / Ita No.4108/Chny/2025 िनधा"रण वष" / Assessment Year: 2019-20 Income Tax Officer, V Ezhumalai, Non Corporate Ward- S 1123, Ponpatharkoodam, 22(1), Tambaram Gangai Amman Koil Street, Thirukazhukundram, Chengalpattu – 603405 Pan: Acipe8113C Appellant/ Revenue Respondent / Assessee Assessee By None Revenue By Ms. V Aswathy – Jcit Date Of Hearing 18/02/2026 Date Of Pronouncement 12/03/2026 आदेश/ Order Per Inturi Rama Rao, Am : This Appeal Filed By The Revenue Directed Against The Order Of Ld.Commissioner Of Income Tax(Appeal)[Nfac], Delhi

Section 120Section 143(2)Section 144Section 147Section 148Section 148ASection 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 21.12.2023 passed u/s.147 r.w.s 144 read with section 144B of the Income Tax Act, 1961 at a total income

Basava Roaways (India) Pvt. Ltd, Sedam vs. Income Tax Officer, Ward-1, Gulbarga

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

ITA 565/BANG/2025[2013-14]Status: DisposedITAT Bangalore12 Mar 2026AY 2013-14

Bench: Shri Waseem Ahmed & Shri Keshav Dubeyassessment Year: 2013-14

For Appellant: Shri Rajkumar Hanchal, CAFor Respondent: Shri Ganesh R Ghale, Advocate – Standing

Section 142(1)Section 144Section 147Section 148Section 148ASection 194ASection 194CSection 250

reassessment proceedings on this count. Hence, this ground of appeal of the assessee is hereby dismissed. 13. Ground No. 4 relate to the best judgment assessment framed by the AO u/s 144 of the Act. 14. At the outset, we note that, at the time of hearing, the assessee

Abbas Fakhruddin, Mumbai vs. Income Tax Officer 20(1)(1), Mumbai

ITA 8297/MUM/2025[2017-18]Status: DisposedITAT Mumbai12 Mar 2026AY 2017-18

Bench: Shri Narender Kumar Choudhryshri Jagadish

For Appellant: Ms. Rupal Kaku, Ld. ARFor Respondent: Shri Surendra Mohan (Sr. DR.)

Section 144Section 147Section 148Section 148ASection 250Section 56(2)(vii)Section 69

However, the Assessee as per Assessment Year made no compliance. Therefore in the constrained circumstances, the Assessing Officer framed the assessment being a best judgment assessment by taking refuge of the provisions of section 144 of the Act, and ultimately made the addition of Rs.67,56,275/- being unexplained investment

Arch Tech Building Materials Private Limited, Cuddalore vs. ITO, Ward 1, Cuddalore

In the result, the appeal filed by the assessee stands partly allowed for statistical purposes

ITA 4044/CHNY/2025[2015-16]Status: DisposedITAT Chennai11 Mar 2026AY 2015-16

Bench: SHRI GEORGE GEORGE K (Vice President), SHRI INTURI RAMA RAO (Accountant Member)

Section 139Section 142(1)Section 144Section 144BSection 147Section 148Section 148ASection 250Section 282(1)

notices issued under section 142(1) of the Act. In the circumstances, the Assessing Officer proceeded with the framing best judgment assessment under section 144 of the Act, vide order dated 08.02.2023 passed under section 147 r.w.s 144 read with section 144B of the Income Tax Act at a total

C-2480 Elayangaram Paccs, Tirupattur vs. ITO, Tirupathur

In the result, appeal of the Assessee stands partly allowed for statistical purpose

ITA 4037/CHNY/2025[2018-19]Status: DisposedITAT Chennai11 Mar 2026AY 2018-19

Bench: Shri George George K, Vice- & Shri Inturi Rama Raoआयकर अपील सं. / Ita No.4037/Chny/2025 "नधा"रण वष" / Assessment Year: 2018-19 C-2480 Elayanagaram Assessment Unit, Primary Agricultural V Nfac, Income Tax Cooperative Credit Society, S. Department, Elayanagaram, Tirupattur. Ito-Che-W- Pan: Aahfc7142G (146)(2), Chennai. Appellant Respondent Assessee By Mr. Shyam Sundar – Ca Revenue By Ms. V Awasthay – Jcit Date Of Hearing 17/02/2026 Date Of Pronouncement 11/03/2026 आदेश / Order Per Inturi Rama Rao, Am: This Is An Appeal Filed By The Assessee Directed Against The Order Of Ld. Commissioner Of Income Tax(Appeals)[Nfac] Delhi [‘The Cit(A)’] Passed Under Section 250 Of The Income Tax Act

Section 115BSection 139(1)Section 142(1)Section 144Section 147Section 148Section 250Section 250(6)Section 69Section 80P(2)(a)

notices issued under section 142(1) of the Act. 5 3. In the circumstances, Assessing Officer proceeded with framing the best judgment assessment under section 144 vide order dated 06.03.2023 passed under section 147 r.w.s 144 read with section 144B of the Income Tax Act, 1961 at a total income

Easwaramurthy Prakash, Coimbatore vs. ITO, Ward-1(2), Tirupur

In the result, the appeal of the assessee is partly allowed

ITA 2247/CHNY/2025[2016-17]Status: DisposedITAT Chennai09 Mar 2026AY 2016-17

Bench: Shri George George K & Shri S.R. Raghunatha

For Appellant: Shri. Suraj Nahar, CAFor Respondent: Shri. N. Rajakumar, Addl.CIT

Section 144Section 147Section 148Section 44A

estimating the income of the assessee cannot be faulted in principle. 11. That said, it is trite law that even in a best judgment assessment, the estimation of income must be reasonable, fair and based on rational considerations, and should not be arbitrary or excessive. In the present case

Nagaraju Muniyappa, Kaggalipura Post, Kanakapu Bade Katte vs. Income Tax Officer Ward 7(2)(5), Bangalore, Karnataka

In the result, the appeal is allowed for statistical purposes

ITA 2499/BANG/2025[2016-17]Status: DisposedITAT Bangalore05 Mar 2026AY 2016-17

Bench: Shri Waseem Ahmed & Shri Keshav Dubeyassessment Year: 2016-17

For Appellant: Shri Siddesh Gaddi, CAFor Respondent: Shri Subramanian, JCIT (DR)

Section 144Section 250Section 251(1)(a)

brevity and convenience are not inclined to reproduce here. 3. The core issue before us is whether the ld. CIT(A), in a best judgment assessment u/s 144, can partially set aside one issue to the Page 2 of 7 AO while simultaneously confirming other additions — or whether he must ... making a fresh assessment. 8.2 The legislative intent behind the amendment, as evident from the explanatory memorandum, is to address best judgment assessments where substantial factual verification is required due to non-compliance at the assessment stage, and to enable a fresh examination by the AO in such cases

Tulsidas Virji Chothani, Mumbai vs. Income-Tax Officer Ward 27(3)(1), Mumbai

In the result, the appeal by the assessee is allowed

ITA 319/MUM/2026[2016-17]Status: DisposedITAT Mumbai04 Mar 2026AY 2016-17

Bench: Shri Vikram Singh Yadavshri Sandeep Singh Karhailtulsidas Virji Chothani, 601, 6Th Floor, Shantrunjay Building, Neelkanth Valley, Ghatkopar East, Mumbai - 400077 ............... Appellant Pan: Aabpc0337M V/S Income Tax Officer, Ward-27(3)(1) It-Office, Vasi Railway Station Building, ……………… Respondent Navi Mumbai - 400703

For Appellant: Shri Mehul ShahFor Respondent: Shri Pravin Salunkhe, Sr. DR

Section 142(1)Section 143(2)Section 143(3)Section 250Section 44A

Kachwala Gems v. JCIT (2007) 288 ITR 10 (SC), the Hon'ble Supreme Court held that:- “……………………It is well settled that in a best judgment assessment there is always a certain degree of guess work. No doubt the authorities concerned should try to make an honest and fair estimate ... income even in a best judgment assessment, and should not act totally arbitrarily, but there is necessarily some amount of guess work involved in a best judgment assessment, and it is the assessee himself who is to blame as he did not submit proper accounts. In our opinion there

Ashoka Minerals, Kanpur Dehat vs. Income Tax Officer, NFAC

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

ITA 384/LKW/2025[2018-19]Status: DisposedITAT Lucknow27 Feb 2026AY 2018-19

For Appellant: Sh. Samrat Chandra, C.AFor Respondent: Sh. R.R.N. Shukla, Add CIT DR

Section 147

India failed to furnish the bank statement in response to the notice under section 133(6), the AO proceeded to make a best judgment assessment by adding a sum of Rs. 1,12,78,456/- back to the income of the assessee under section 69A of the Income ... notices issued for compliance and this resulted in the ex parte order. However, it was pointed out that the authority making a best judgment assessment must make an honest and fair estimate of the income of the assessee and the said should have a reasonable nexus to the available material

Annakodiraj, Tirunelveli vs. ITO, Ward-1, Tirunelveli

In the result, the appeal filed by the assessee is allowed for statistical purposes

ITA 4123/CHNY/2025[2018-19]Status: DisposedITAT Chennai27 Feb 2026AY 2018-19

Bench: Shri George George K & Shri S.R. Raghunathaआयकर अपील सं./Ita No.: 4123/Chny/2025 िनधा"रण वष"/Assessment Year: 2018-19 Shri Annakodiraj, The Income Tax Officer, 93, Kankanankinaru, Vs. Ward 1, Balapathiraramapuram Po, Tirunelveli Vk Pudur Tk, Tirunelveli – 627 953. Pan: Bydpa 7546K (अपीलाथ"/Appellant) (""यथ"/Respondent) अपीलाथ" क" ओर से/Appellant By : Shri J. Saravanan, Advocate ""यथ" क" ओर से/Respondent By : Shri Aroon Praasad, Addl.Cit सुनवाई क" तारीख/Date Of Hearing : 26.02.2026 घोषणा क" तारीख/Date Of Pronouncement : 27.02.2026 आदेश/ O R D E R Per George George K: This Appeal Filed By The Assessee Is Directed Against The Order Of Commissioner Of Income Tax (Appeals), National Faceless Appeal Centre (Nfac), Delhi Dated 09.10.2025 Passed Under Section 250 Of The Income Tax Act, 1961 (Hereinafter Called ‘The Act’). The Relevant Assessment Year Is 2018-19. :- 2 -:

For Appellant: Shri J. Saravanan, AdvocateFor Respondent: Shri Aroon Praasad, Addl.CIT

Section 147Section 250

since assessee has not filed any evidences to substantiate his claim. The Ld.AR further submitted that the assessment is also best judgment assessment and hence, it was prayed in the interest of justice and equity, the issue may be restored to the files of the AO as a last opportunity

ITO, Ward-2(1), Begusarai vs. Manish Kumar Motani, Khagaria, Bihar

In the result, the appeal of the Revenue and CO of the Assessee are dismissed

ITA 442/PAT/2024[2017-18]Status: DisposedITAT Patna26 Feb 2026AY 2017-18

Bench: Shri Duvvuru Rl Reddy, Vp & Shri Rajesh Kumar, Am Ito, Ward 2(1), Begusarai Manish Kumar Motani, 3Rd Floor, G.S. Motors Building, Manish Kumar Motani, Hanuman Har Har Mahadev Chauk, Traders, Mill Road, Khagaria, Vs. Begusarai-851101, Begusarai, Khagaria, Bihari-851204 Bihar-851101 (Appellant) (Respondent) Pan No. Ajjpm4263D Co No. 02/Pat/2025 (Arising In Ita No. 442/Pat/2024 For A.Y. 2017-18) Ito, Ward 2(1), Begusarai Manish Kumar Motani, 3Rd Floor, G.S. Motors Building, Manish Kumar Motani, Hanuman Har Har Mahadev Chauk, Traders, Mill Road, Khagaria, Vs. Begusarai-851101, Begusarai, Khagaria, Bihari-851204 Bihar-851101 (Applicant) (Respondent) Assessee By : S/Shri A.K. Rastogi, S.K. Duta, Ars Revenue By : Shri A.H. Chowdhary, Dr Date Of Hearing: 24.11.2025 Date Of Pronouncement: 26.02.2026

For Appellant: S/Shri A.K. RastogiFor Respondent: Shri A.H. Chowdhary, DR

Section 133ASection 40A(3)

assessee, then he ought not to have made addition by relying upon same account books Held, yes-Whether he ought to have made best judgment assessment on basis of history and nature of business and net profit rate as shown by assessee in previous year - Held, yes [Para

Hemant Kumar Tikariha, Raipur vs. Income Tax Officer, Ward-1(1), Raipur

In the result, appeal of the assessee in ITA No

ITA 98/RPR/2026[2012-13]Status: DisposedITAT Raipur25 Feb 2026AY 2012-13

Bench: Shri Partha Sarathi Chaudhuryआयकर अपील सं./Ita Nos.97 & 98/Rpr/2026 "नधा"रण वष" /Assessment Years : 2011-12 & 2012-13

For Appellant: Shri Prafulla Pendse, CAFor Respondent: Dr. Priyanka Patel, Sr. DR

Section 147Section 69Section 69A

circumstances beyond control of the assessee, they were unable to attend the proceedings before the A.O which resulted in passing of best judgment assessment. The Ld. Counsel further submitted that they had filed entire evidences before the Ld. CIT(Appeals)/NFAC substantiating the nature and source of the said cash

Hemant Kumar Tikariha, Raipur vs. ITO, Ward-1(1), Raipur

In the result, appeal of the assessee in ITA No

ITA 97/RPR/2026[2011-12]Status: DisposedITAT Raipur25 Feb 2026AY 2011-12

Bench: Shri Partha Sarathi Chaudhuryआयकर अपील सं./Ita Nos.97 & 98/Rpr/2026 "नधा"रण वष" /Assessment Years : 2011-12 & 2012-13

For Appellant: Shri Prafulla Pendse, CAFor Respondent: Dr. Priyanka Patel, Sr. DR

Section 147Section 69Section 69A

Sujatha P. Classik Plasto Packagings, Pondicherry vs. ITO, Ward-3, Pondicherry

In the result, the appeals filed by the assessee in ITA

ITA 4095/CHNY/2025[2020-21]Status: DisposedITAT Chennai25 Feb 2026AY 2020-21

Bench: SHRI GEORGE GEORGE K (Vice President), SHRI S.R. RAGHUNATHA (Accountant Member)

For Appellant: Shri Varun Ranganathan, AdvocateFor Respondent: Shri Aroon Praasad, Addl.CIT

Section 147Section 250Section 271A

appeal and there is no reasonable cause for condoning the same. Further, we also notice that the assessment has been completed on best judgment assessment u/s. 147 r.w.s. 144 r.w.s.144B of the Act. 4. On perusing the order of CIT(A), we note that the assessee had stated the reasons

Sujatha P. Classik Plasto Packagings, Pondicherry vs. ITO, Ward-3, Puducherry

In the result, the appeals filed by the assessee in ITA

ITA 4094/CHNY/2025[2020-21]Status: DisposedITAT Chennai25 Feb 2026AY 2020-21

Bench: SHRI GEORGE GEORGE K (Vice President), SHRI S.R. RAGHUNATHA (Accountant Member)

For Appellant: Shri Varun Ranganathan, AdvocateFor Respondent: Shri Aroon Praasad, Addl.CIT

Section 147Section 250Section 271A

Sujatha P. Classik Plasto Packagings, Pondicherry vs. ITO, Ward-3, Puducherry

In the result, the appeals filed by the assessee in ITA

ITA 4041/CHNY/2025[2020-21]Status: DisposedITAT Chennai25 Feb 2026AY 2020-21

Bench: SHRI GEORGE GEORGE K (Vice President), SHRI S.R. RAGHUNATHA (Accountant Member)

For Appellant: Shri Varun Ranganathan, AdvocateFor Respondent: Shri Aroon Praasad, Addl.CIT

Section 147Section 250Section 271A