“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

DCIT, Circle - 12(1), Kolkata vs. M/S. Merino Industries Limited, Kolkata

In the result, the appeal of the revenue is hereby dismissed

ITA 174/KOL/2019[2014-15]Status: DisposedITAT Kolkata06 Feb 2025AY 2014-15

Bench: Shri Sanjay Garg & Shri Sanjay Awasthi

Section 2(22)Section 250Section 801A

assessment order passed by the Assessing Officer is required to be treated as an order passed u/s 144 of the Act as best judgment assessment order. He has further submitted that since the assessee's original return was time-barred, therefore, the revised return was also invalid and therefore ... hence, the same could not be taken cognizance of and the assessment order be treated as passed u/s 144 of the Act as best judgment assessment and not u/s 143(3) of the Act. On further appeal, the Hon'ble Calcutta High Court set aside the order of the Tribunal

Bangaru Jayaraman, Dharmapuri vs. ITO, Ward-1, Dharmapuri

In the result, the appeals of both the assessees are allowed for

ITA 2538/CHNY/2024[2012-13]Status: DisposedITAT Chennai05 Feb 2025AY 2012-13

Bench: Shri Aby T. Varkey & Shri Amitabh Shukla

For Respondent: Shri Keerthi Narayanan, JCIT

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

pointed out that the Ld.CIT(A)/NFAC has passed ex-parte orders qua both the assessees. And that the AO has also passed best judgment assessments u/s.144 of the Income Tax Act, 1961 [herein after “Act”] i.e., ex-parte orders. 4. Brief facts are that the AO received AIR (Annual ... followed by a show- cause dated 24.09.2021; and since, the assessees neither appeared nor filed any reply, the AO passed best judgment assessment u/s.144 of the Act by making an addition of Rs.20,01,000/- u/s.69A of the Act in both their hands by passing separate assessment orders

Jayaraman Sagunthala, Dharmapuri vs. ITO, Ward-1, Dharmapuri

In the result, the appeals of both the assessees are allowed for

ITA 2537/CHNY/2024[2012-13]Status: DisposedITAT Chennai05 Feb 2025AY 2012-13

Bench: Shri Aby T. Varkey & Shri Amitabh Shukla

For Respondent: Shri Keerthi Narayanan, JCIT

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

Prabhat Kumar, Patna vs. ACIT, Circle-4, Patna

ITA 283/PAT/2024[2017-18]Status: DisposedITAT Patna04 Feb 2025AY 2017-18

IN THE INCOME TAX APPELLATE TRIBUNAL “PATNA BENCH” PATNA (VIRTUAL HEARING AT KOLKATA) SHRI SANJAY GARG, JUDICIAL MEMBER SHRI SANJAY

ACIT, Patna vs. New Era Social Development Welfare Society, Patna

Appeal is treated as allowed for statistical purposes

ITA 296/PAT/2023[2017-18]Status: DisposedITAT Patna04 Feb 2025AY 2017-18

Section 10Section 11Section 12Section 12ASection 12A(1)(b)Section 139(1)Section 144Section 2Section 250Section 288

consideration of facts & circumstances and verification of documents available in this office, the income of the assessee AOP/BOI is computed u/s 144 i.e. Best Judgment Assessment as Rs. 5,80,39,300/-.” 1.2 Aggrieved with this action, the assessee approached the Ld. CIT(A), who has in principle supported

Aryavysya Seva Sangham Pattana, Warangal vs. Income Tax Officer, Ward-1, Warangal

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

ITA 25/HYD/2025[2017-18]Status: HeardITAT Hyderabad04 Feb 2025AY 2017-18

Bench: Shri Laliet Kumar & Shri Manjunatha, G.आ.अपी.सं /Ita No. 25/Hyd/2025 (िनधा"रण वष"/Assessment Year: 2017-18) Aryavysya Seva Sangham Vs. Income Tax Officer Pattana Ward 1 Warangal Warangal Pan:Aadaa1704H (Appellant) (Respondent) िनधा""रती "ारा/Assessee By: Shri P Vinod, Advocate राज" व "ारा/Revenue By:: Smt. Harshita Chouhan, Dr सुनवाई की तारीख/Date Of Hearing: 04/02/2025 घोषणा की तारीख/Pronouncement: 04/02/2025 आदेश/Order Per Manjunatha, G. A.M This Appeal Filed By The Assessee Is Directed Against The Order Dated 17/12/2024 Of The Learned Cit (A)-Nfac Delhi, Relating To A.Y.20176-18. 2. The Assessee Raised The Following Grounds Of Appeal: “1. On The Facts & Circumstances Of The Case, The Order Of The Ld. Cit(A) Is Erroneous Both On Facts & In Law Apart From Being Passed In Violation Of Principles Of Natural Justice. 2. The Ld. Cit(A) Erred In Sustaining The Addition Of Rs. 33,34,200/ As Unexplained Money Under Section 69A Of The Act. The Ld. Cit(A) Erred In Sustaining The Addition

For Appellant: Shri P Vinod, AdvocateFor Respondent: : Smt. Harshita Chouhan, DR

Section 139Section 142(1)Section 69A

income for the A.Y 2017- 18 u/s 139 of the Act on or before 31/03/2018. Thus, the Assessing Officer completed the assessment under “best judgment assessment” and assessed the total income at Rs.34,66,350/-. 4. Being aggrieved, the assessee preferred an appeal before the learned CIT (A) who gave

Shivaramaiah Guruswamy, Bangalore vs. Income Tax Office, Ward-3(3)(1), Bangalore

ITA 2425/BANG/2024[2018-19]Status: DisposedITAT Bangalore31 Jan 2025AY 2018-19

Bench: Shri Laxmi Prasad Sahu & Shri Soundararajan K.Assessment Year : 2018-19

For Appellant: Shri Pranay Sharma, AdvocateFor Respondent: Shri Subramanian S, JCIT-DR

Section 144Section 148ASection 234ASection 234FSection 69A

assessee. The assessee had not responded to any of the notices and Page 4 of 6 therefore the AO made a best judgment assessment u/s. 144 r.w.s 147 of the Act. As against the said order, the assessee filed an appeal before the Ld.CIT(A) and contended that

Fantacy Creations, Kolkata vs. D.C.I.T., Circle - 25, Kolkata

In the result, the appeal filed by the assessee is allowed

ITA 1449/KOL/2024[2006-2007]Status: DisposedITAT Kolkata30 Jan 2025AY 2006-2007

Bench: Shri Rajesh Kumar&Shri Pradip Kumar Choubey]

Section 143(3)Section 271Section 271(1)Section 274

matter should be remanded except that the assessee had not participated properly in the assessment proceedings but for that reason best judgment assessment has been made and the income, which had escaped assessment has been added to the income of the assessee. It was incumbent upon the Rev to make

The Janseva Trust, Godhra vs. The Income Tax Officer, Ward 4(1)(2), Vadodara (Now Income Tax Officer, Ward 1, Godhra)

In the result, the appeal of the assessee is allowed for statistical purposes, subject to the above directions

ITA 851/AHD/2023[2017-18]Status: DisposedITAT Ahmedabad29 Jan 2025AY 2017-18

Bench: Shri T.R. Senthil Kumar & Shri Makarand V. Mahadeokarआयकर अपील सं /Ita No.851/Ahd/2023 िनधा"रण वष" /Assessment Year : 2017-18 The Janseva Trust The Ito बनाम/ Opp. Gyandeep School Ward-4(1)(1)(2), Vadodara V/S. Nr.Jivanlal Hospital (Now Ito, Ward-1, Godhra – 389 001 (Gujarat) Godhra – 389 001) "थायी लेखा सं./Pan: Aaatt 2888 D (अपीलाथ$/ Appellant) (%& यथ$/ Respondent) Assessee By : Ms. Nikhita Bhamblani & Amrin Pathan, Ars Revenue By : Shri Rignesh Das, Sr.Dr सुनवाई की तारीख/Date Of Hearing : 27/01/2025 घोषणा की तारीख /Date Of Pronouncement: 29/01/2025 आदेश/O R D E R Per Makarand V. Mahadeokar, Am: The Present Appeal Has Been Filed By The Assessee Against The Order Passed By The Commissioner Of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [Hereinafter Referred To As “Cit(A)”], Dated 29.08.2023, For The Assessment Year (A.Y.) 2017-18. The Said Appeal Arises From The Assessment Order Passed By The Income Tax Officer (Ito), Ward 4(1)(2), Vadodara [Hereinafter Referred To As “Ao”], Under Section 144 Of The Income Tax Act, 1961 [Hereinafter Referred To As “The Act)”], On 24.12.2019. The Janseva Trust Vs. Ito Asst. Year : 2017-18

For Appellant: Ms. Nikhita Bhamblani &For Respondent: Shri Rignesh Das, Sr.DR

Section 115BSection 139(1)Section 142(1)Section 144Section 69A

This non-compliance is a critical factor that weakened the assessee's position and necessitated the passing of the best judgment assessment order under Section 144 of the Act. Despite repeated demands by the AO and the CIT(A), the assessee failed to furnish complete and satisfactory details to substantiate

Reshma Sabir Khan, Andheri West, Mumbai vs. Jurisdictional Assessing Officer, 24(3)(1), Mumbai, Piramal Chamber

In the result, all the grounds raised by the assessee are allowed for statistical purposes

ITA 4880/MUM/2024[2017-18]Status: DisposedITAT Mumbai29 Jan 2025AY 2017-18

Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI GIRISH AGRAWAL (Accountant Member)

Section 133(6)Section 142(1)Section 143(2)Section 144Section 69A

issue any show cause notice and did not provide the copies of contrary material to the assessee for rebuttal and passed the best judgment assessment 4 Reshma Sabir Khan order u/s 144 and made the addition u/s 69A of entire cash and cheques credits reflected in 4 bank accounts

Chand Khan, Sada Shiv Nagar vs. ITO Ward 1(2), City Center

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

ITA 109/AGR/2024[2012-2013]Status: DisposedITAT Agra28 Jan 2025AY 2012-2013

Bench: : Shri Ramit Kocharassessment Year: 2012-13

Section 144Section 147

assessee during the course of reassessment proceedings, but the same remained un-complied with. Assessing Officer passed the best judgment assessment by making addition to the tune of Rs.15,90,000/- u/s. 69 of the Income Tax Act with respect to source of investment made in mutual funds which sources ... counsel for the assessee submitted that no notices were received during the course of re-assessment proceedings, and it is an ex-parte best judgment assessment order u/s. 144 of the Act. It was further submitted that the ld. CIT(Appeals) also passed an ex-parte appellate order

Lakshmi Tanuja Sugguna, Vijayawada vs. Income Tax Officer, Ward-3(5), Vijayawada

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

ITA 182/VIZ/2024[2012-13]Status: DisposedITAT Visakhapatnam28 Jan 2025AY 2012-13

Bench: Shri Vijay Pal Rao, Hon’Ble

Section 142(1)Section 144Section 148Section 250Section 250(6)

oraey stele after, fasmarreurs tie, fexmarneura IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM “SMC” BENCH, VISAKHAPATNAM Mf fasta ore Wa

Nitesh Agarwal, Jaipur vs. Deputy Commissioner of Income Tax, Jaipur

Appeal is partly allowed

ITA 1214/JPR/2024[2012-13]Status: DisposedITAT Jaipur28 Jan 2025AY 2012-13

Bench: SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member), SHRI NARINDER KUMAR (Judicial Member)

For Appellant: Shri S. L. Poddar, Adv. &For Respondent: Shri Arvind Kumar, CIT-DR

Section 143(2)Section 143(3)Section 144Section 145(3)Section 68Section 69B

record. The basis of the rejection appears to be best judgment of assessment done by him. The rejection of 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 books ... making a Best Judgment Assessment. Thus, on facts the view taken by the Tribunal is possible view. Therefore, no substantial question of law arises. Thus not entertained." (iv) COMMISSIONER OF INCOME TAX vs. GIAN CHAND LABOUR CONTRACTORS (HIGH COURT OF PUNJAB AND HARYANA

Kaatyaayini Steels Pvt Ltd, Mumbai vs. Income Tax Officer, WD-12(3)(1), Mumbai

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

ITA 4398/MUM/2024[2017-18]Status: DisposedITAT Mumbai28 Jan 2025AY 2017-18

Bench: Ms. Kavitha Rajagopal, Jm & Smt. Renu Jauhri, Am

For Appellant: Shri. Jay ThakkarFor Respondent: Shri. Hemanshu Joshi (Sr. DR)

Section 115BSection 142(1)Section 143(2)Section 145(3)Section 147Section 148Section 250Section 68

assessment proceeding and the ld. AO passed the assessment order dated 20.03.2022, u/s. 147 r.w. 144 r.w.s. 144B of the Act, being the best judgment assessment, thereby determining total income at Rs. 9,20,45,650/- after making addition/disallowance of Rs. 9,14,00,000/- as unexplained cash credit

Kaatyaayini Steels Pvt Ltd, Mumbai vs. Income Tax Officer, WD-12(3)(1), Mumbai

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

ITA 4397/MUM/2024[2017-18]Status: DisposedITAT Mumbai28 Jan 2025AY 2017-18

Bench: Ms. Kavitha Rajagopal, Jm & Smt. Renu Jauhri, Am

For Appellant: Shri. Jay ThakkarFor Respondent: Shri. Hemanshu Joshi (Sr. DR)

Section 115BSection 142(1)Section 143(2)Section 145(3)Section 147Section 148Section 250Section 68

Indira Gandhi College for Women Committee, Madurai vs. ITO, Exemption Ward, Madurai

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

ITA 2037/CHNY/2024[2015-16]Status: DisposedITAT Chennai27 Jan 2025AY 2015-16

Bench: Shri George George Kand Shri S.R. Raghunathaआयकर अपील सं./Ita No.: 2037/Chny/2024 िनधा"रण वष"/Assessment Year: 2015-16 M/S. Indira Gandhi College For The Income Tax Officer, Women Committee, Vs. Exemptions Ward, A-5, Pasumpon Street, Madurai. Tirunagar, Madurai – 625 006. Pan: Aaaai 0692K (अपीलाथ"/Appellant) (""यथ"/Respondent) अपीलाथ" क" ओर से/Appellant By : Shri S. Sridhar, Advocate ""यथ" क" ओर से/Respondent By : Shri Rohan Raj, Jcit सुनवाई क" तारीख/Date Of Hearing : 27.01.2025 घोषणा क" तारीख/Date Of Pronouncement : 27.01.2025 आदेश /O R D E R Per George George K: This Appeal At The Instance Of The Assessee Trust Is Directed Against Cit(A)/Nfac’S Order Dated 14.06.2024, Passed Under Section 250 Of The Income Tax Act, 1961 (Hereinafter Called ‘The Act’). The Relevant Assessment Year Is 2015-16. 2. At The Very Outset, We Notice That The Appeal Of The Assessee Has Been Dismissed Ex-Parte Qua Assessee. In Response To Four Hearing Notices Issued From The Office Of The First Appellate Authority, The Assessee Has Not Furnished Its Submissions Or Any Documentary Evidences. Consequently The Appeal Of The Assessee Was Dismissed Ex- Parte Qua Assessee.

For Appellant: Shri S. Sridhar, AdvocateFor Respondent: Shri Rohan Raj, JCIT

Section 144Section 250

justice and equity, the assessee may be provided with one more opportunity to represent his case before the AO, since it was a best judgment assessment u/s.144 of the Act. 4. The ld.DR supported the order of the AO and the CIT(A). 5. We have heard rival submissions ... view that assessee ought to be provided with one more opportunity to represent its case. Since the proceedings before the AO is also best judgment assessment, we deem it appropriate to restore the matter to the files of the AO. Accordingly, the matter is remitted to the files

Pramila Gokuldas Daga Girls College, Raipur vs. Income Tax Officer, Ward-3(4), Raipur

In the result, appeal filed by the assessee trust in ITA

ITA 547/RPR/2024[2011-12]Status: DisposedITAT Raipur24 Jan 2025AY 2011-12

Bench: Shri Ravish Sood & Shri Arun Khodpiaआयकर अपील सं. / Ita Nos. 546 & 547/Rpr/2024 "नधा"रण वष" / Assessment Year : 2011-12 Pramila Gokuldas Daga Girls College Bal Ashram Parisar, Kutchery Chowk, Raipur (C.G.)-492 001 Pan: Aaatp4369D

For Appellant: Shri Ravi Agrawal, CAFor Respondent: Smt. Tarannum Verma, Sr. DR

Section 10(23)(c)Section 144Section 147Section 148

eligible for exemption available u/s.10(23)(c)(iiiad) and hence may kindly be allowed. 4. In view of the circumstances of the case, best judgment assessment order passed u/s.144 without giving proper opportunity of being heard to the appellant is unjustified. The appellant craves to be allowed to add, amend

Pramila Gokuldas Daga Girls College, Raipur vs. Income Tax Officer, Ward-3(4), Raipur

In the result, appeal filed by the assessee trust in ITA

ITA 546/RPR/2024[2011-12]Status: DisposedITAT Raipur24 Jan 2025AY 2011-12

For Appellant: Shri Ravi Agrawal, CAFor Respondent: Smt. Tarannum Verma, Sr. DR

Section 10(23)(c)Section 144Section 147Section 148

Doorvasachari Renu Kumar, Hosur vs. ITO, Ward-1, Hosur

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

ITA 3028/CHNY/2024[2017-18]Status: DisposedITAT Chennai24 Jan 2025AY 2017-18

Bench: Shri George George Kand Shri Amitabh Shukla

For Appellant: Shri C. Satish, AdvocateFor Respondent: Shri S. Easwar, JCIT

Section 144Section 250

justice and equity, the assessee may be provided with one more opportunity to represent his case before the AO, since it was a best judgment assessment u/s.144 of the Act. 6. The ld.DR supported the order of the AO and the CIT(A). 7. We have heard rival submissions ... view that one more opportunity should be provided to the assessee to represent his case. Since the proceedings before the AO is also best judgment assessment, we deem it appropriate to restore the matter to the files of the AO. Accordingly, the matter is remitted to the files

Avm Autos, Pudukottai vs. ITO, Ward-1, Pudukottai

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

ITA 3002/CHNY/2024[2017-18]Status: DisposedITAT Chennai24 Jan 2025AY 2017-18

Bench: Shri George George Kand Shri Amitabh Shuklaआयकर अपील सं./Ita No.: 3002/Chny/2024 िनधा"रण वष"/Assessment Year:2017-18 M/S. Avm Autos, The Income Tax Officer, 9954/P-1, Alangudi Road, Vs. Ward-1, Pudukottai – 622 001. Pudukottai. Pan: Aajfa 2158E (अपीलाथ"/Appellant) (""यथ"/Respondent) अपीलाथ" क" ओर से/Appellant By : Shri T. Vasudevan, Advocate ""यथ" क" ओर से/Respondent By : Shri S. Easwar, Jcit सुनवाई क" तारीख/Date Of Hearing : 23.01.2025 घोषणा क" तारीख/Date Of Pronouncement : 24.01.2025 आदेश /O R D E R Per George George K: This Appeal At The Instance Of The Assessee Is Directed Against Cit(A)/Nfac’S Order Dated 30.04.2024, Passed Under Section 250 Of The Income Tax Act, 1961 (Hereinafter Called ‘The Act’). The Relevant Assessment Year Is 2017-18. 2. There Is A Delay Of 148 Days In Filing This Appeal. The Assessee Has Filed A Petition For Condonation Of Delay Along With Affidavit Stating Therein The Reasons For Belated Filing Of This Appeal. The Reasons Stated In The Condonation Application For Belated Filing Of This Appeal Are As Under:- “The Order U/S.250 Was Passed By The Ld.Cit(A) On 30/04/2024. The Appellant Had Closed The Business During The Year 2017-18 Completely. The Mail Address & Mobile Number As Per The Income Tax Profile Was Not Monitored By The Partner Of The Appellant-Firm, Due To Which The Appellant Was Also Not Aware Of Any Of The Notice & Order Related To Appeal Proceedings. However Based On The Demand Raised By The Concerned Jurisdiction Officer, The Appellant Came To Know That Appeal Was Disposed Off By The Ld.Cit(A), Immediately, The Order Was Downloaded From The Portal & The Appeal Was Prepared By The Auditor. The Appellant Filed An Appeal Eventually Filed On 02.12.2024.”

For Appellant: Shri T. Vasudevan, AdvocateFor Respondent: Shri S. Easwar, JCIT

Section 144Section 250

filed its return of income beyond the time limit, consequently the said return was not taken note off by the AO, who passed best judgment assessment u/s.144 of the Act. Therefore, he submitted that in the interest of justice and equity, the assessee may be provided with one more opportunity ... represent its case before the AO, since it was a best judgment assessment u/s.144 of the Act. 6. The ld.DR supported the order of the AO and the CIT(A). 7. We have heard rival submissions and perused the materials on record. The Office of the First Appellate Authority