Assessing officer, after considering all relevant material which he has gathered, is under an obligation to make an assessment of the total income or loss to the best of judgment in the following cases:-
If any person not submit his return required under section 139(1) and has not made a return or a revised return under sub section (4) or (5) of that section.
If any person, after having filed a return, fails to comply with the term of notice sec. 143(2), requiring his presence of evidence and document.
If any person fails to comply with all terms of a notice under section 142(1) or fails to comply with direction requiring him to get his accounts audited in terms of section 142(2A).
If the assessing is not satisfied about the accounts of the assessee or if no method of accounting has been regularly employed by the assessee.
Other points –
- A refund cannot be granted under sec. 144.
- The case of best judgment, an assessee has a right to file an appeal under section 246A or to make an application for revision under section 264 to the commissioner.
- The best judgment assessment can only be made after giving the assessee an opportunity of being heard. Such opportunity shall be given by issue of notice to the assessee to show because why the assessment should not be completed to the best of judgment and that opportunity for hearing will not be necessary where notice under section 142(1) has already been issued.