Q. What is meant by the expression ‘Best Judgement Assessment’? Under what circumstances can recourse be had to this method of assessment? Are there any remedy open to the assessee against such assessment?
Ans. MEANING OF BEST JUDGEMENT ASSESSMENT: In Best Judgement Assessment, assessing officer should really base the assessment on the best of his judgement. The law states he must act honestly not vindictively (बदला लेते हुए). He must make fair estimate of the income for the proper assessment. For that, he must be able to take into consideration the local knowledge and repute in regard of assessee’s circumstances and his own knowledge regarding previous returns and assessments of the assessee and other matters which he thinks will help him in making proper assessment. It is purely a guess work. It is also known as ex-parte assessment. If appeal is file against Best Judgement Assessment, the assessing officer shall have to disclose the basis of a judgement befote appellate authority.
Best Judgement Assessment can be compulsory or discretionary.
Compulsory Best Judgement Assessment: Sec. 144 empowers the Assessing Officer to make assessment to the best of his judgement in the following circumstances:
(i) Where assessee has failed to file voluntarily return u/s 139(1) or no return has been made in response of the notice of the Assessing Officer.
(ii) Where there has been failure to comply with the terms of notice issued u/s 142(1) requesting the assessee to produce the books of accounts or he fails to get his accounts audited u/s 142(2A).
(iii) To verify the correctness of the return, assessing officer serve the notice upon the assessee u/s 143(2) asking him to attend the office or to produce the evidences in support of the return but the assessee does not comply with the terms of such notice.
Consequences of Best Judgement Assessment: There are four consequences of a Best Judgement Assessment:
(i) The assessee becomes liable to penalties u/s 272A.
(ii) The assessee becomes liable to prosecution u/s 276CC and 276D.
(iii) A refund may not be granted.
(iv) The assessee is prevented (रोक दिया जाता है) from bringing on record any new facts before the appellate authority if appeal is filed under best judgement assessment.
Remedies against Best Judgement Assessment: If assessee is in opinion or feels that excess tax has been imposed by the assessing officer then–
(i) He can appeal to the Commissioner (appeal) against the order of assessing officer.
(ii) He can appeal to the Tribunal against the order of Commissioner (appeal).
(iii) He may go to high court.
(iv) He may apply to the Commissioner for revision.
Discretionary Best Judgement Assessment: If assessing officer is in the opinion that the accounts maintained by the assessee are incorrect or no proper system employ for maintaining accounts ot income has not been computed in proper way, he can make the assessment at his own discretion.
