Best Judgement Assessment U/s 144

1. In following situations the AO can make the Best Judgement Assessment

  • If the person fails to make the return as required U/ 139(1)
  • He has not made a return or a revised return under section 139(4) and 139(5)
  • If any person fails to comply with all the terms of a notice U/s 142(1) or
  • He fails to comply with the direction requiring him to get his accounts audited in terms of section 142(2A)
  • If any person after having filed a return fails to comply with all the terms of a notice under section 143(2) requiring his presence or production of evidence and documents.
  • If the AO is not satisfied about the correctness or completeness of the accounts of assessee or if no method of accounting has been regularly employed by the assessee.

2. The AO ,after taking in to the account all relevant material which he has gathered , shall make the assessment of the total income or loss to the best of his judgement and determine the sum payable by the assessee or refundable to the assessee on the basis of such assessment.

3. The best judgement assessment can only be made after giving the assessee an opportunity of being heard .

4. Such opportunity shall be given by issue of a notice to the assessee to show cause why the assessment should not be completed to the best judgement.

5. When notice U/s142 (1) already issued to the assessee than opportunity for hearing will not be necessary.

Best judgement assessment.

144. If any person—

(a) fails to make the return required by any notice given under sub-section (2) of section 139 and has not made a return or a revised return under sub-section (4) or sub-section (5) of that section, or

(b) fails to comply with all the terms of a notice issued under sub-section (1) of section 142, or

(c) having made a return, fails to comply with all the terms of a notice issued under sub-section (2) of section 143,

the Income-tax Officer, after taking into account all relevant material which the Income-tax Officer has gathered, shall make the assessment of the total income or loss to the best of his judgment and determine the sum payable by the assessee or refundable to the assessee on the basis of such assessment.

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