Sources Of Hindu

S.S. Jain Subodh Law College

Project Submission as the Partial Fulfillment of Periodic Evaluation

of Tax Law

Submission To:

Submitted By:

MR. DHARMENDRA SINGH BHATI

NAME OF STUDENT

FACULTY OF TAX LAW

Roll no:III Semester

S.S. Jain Subodh Law College

TABLE OF CONTENTS
1

Sources Of Hindu

1.
2.
3.
4.
5.
6.

Acknowledgment........................................................................................... iii
Research Methodology..........................................................................
iv
Case list........................................................................................................ v
Abstract.................................................................................................
vii
Introduction................................................................................................... 1
The Concept of Best Judgement

Assessment..........................................................................................
2
7. The Basis for Best Judgement assessment..............................................,
.............. 3
8. Key Aspects of Best Judgement
Assessment.........................................................................................
5
Conditions precedent are alternative and not cumulative...............................
Opportunity must be given to the assessee.....................................................
Assessment on rejection of account...............................................................
Reasonable nexus...........................................................................................
Sum payable as tax must be determined........................................................
Considerations in making Best Judgement assessment.................................
Assessment can be made even where return is incomplete, unsigned, or unverified

return.............................................................................................................
Best Judgement assessment can be made for non-compliance of notice under

section 142(1)/section 143(2)..........................................................................

Refusal of Chartered Accountant to undertake audit under section 142(2A) cannot

lead to best Judgement assessment................................................................

Power is not arbitrary...............................................................................
Remedies available assesee ......................................................................
9. Object of Best Judgement Assessment.................................................................
10. Conclusion & Suggestions.................................................................................
11. Bibliography.......................................................................................................

ACKNOWLEDGEMENT

I take this opportunity to express our humble gratitude and personal regards to Mr.
Dharmendra Singh Bhati for inspiring me and guiding me during the course of this project
work and also for his cooperation and guidance from time to time during the course of this
project work on the topic.

Jaipur

(Student sign)
2

Sources Of Hindu
th

15 August 2014

Student Name

RESEARCH METHODOLOGY
Aims and Objectives:
The aim of the project is to present a detailed study of the topic BEST JUDGEMENT
ASSESSMENT

forming a concrete informative capsule of the same with an insight into its

relevance in the Indian market.

Research Plan
The researchers have followed Doctrinal method.
Scope and Limitations:
3

Sources Of Hindu

In this project the researcher has tried to include different aspects pertaining to the
concept of Best Judgement Assessment, types of assessments, special attention is also
provided on section 144 of Income Tax Act, 1961, basis of Best Judgement Assessment,
object of Best Judgement Assessment, impact of judicial pronouncements on Best Judgement
Assessment and lastly conclusion.
.
Sources of Data:
The following secondary sources of data have been used in the project

Case Study

Websites

Case Laws

Books
Method of Writing and Mode of Citation:
The method of writing followed in the course of this research project is primarily
analytical. The researcher has followed Uniform method of citation throughout the course of
this research project.

CASE LIST

Addl. ITO v Ponkunnam Traders (1976) 102 ITR 366 (Ker).

Asst CTO v. Delight Steel Furniture, (1987) 65 STC 329 (Raj).

Babulal Agarwal v. CST, (1987) 66 STC 164 (MP).

Bata Shoe Co. Pvt Ltd v. Joint CTO, (1968) 21 STC 135 (Mad).

Behari Lal Chatterji v CIT (1934) 2 ITR 377 (All).

Bharat Wood Products Co v. CST, (1987) 64 STC 107 (Del).

Bhaskar Rao v. State of AP, (1986) 63 STC 297 (AP).

4

Sources Of Hindu

CIT v Laxminarain Badridas (1937) 5 ITR 170 (PC)

CIT V Segu Buchiah Setty (1970) 77 ITR 539 (SC)

CST v. HM Eusfali, (1987) 64 STC 107 (Del)

CST v. Shyam Vastra Bhandar, (1997) 106 STC 326 (MP).

Dwijendra Kumar Bhattacharjee v Superintendent of Taxes (1990) 78 STC 393 (Gau).

Excise & Taxation Officer v. Visheswar Nath Kashmirlal, (1968) 22 STC 331 (SC).

Harmukhari Dulichand v CIT (1928) 3 ITC 198 (Cal).

Illuri Subbaya Chetty v. State of AP, (1963) 14 STC (SC).

Kachwala Gems v. JCIT (2006) 158 Taxman 71 (SC): (2007) 288 ITR 10 (SC).

Kailash Oil Mills v. Tax Comm., (1982) 50 STC 157 (P&H).

Kalavati Devi Harlalka v. CIT, (1967)3 SCR 833.

Kamala Mills Ltd. V. Bombay State, (1965) 16 STC 613 (SC).

Khemchand Ramdas v CIT(1934) 2 ITR 116

Makhali Wine Store v CST (1987) 67 STC 416 (All).

Mohanlal Hardeodas (Firm of) v CIT (1930) 4 ITC 90 (Pat).

MohiniDebi Malpani v ITO (1970) 77ITR 674 (Cal).

Motor House v. State of Orissa, (1990) 79 STC 385 (Ori).

National Insulated Cable Co v. State of Madras, (1968) 22 STC 445 (Mad).

Padam Chand v CST (1986) 62 STC 195 (All)

Ravi v. State of TN, (1981) 48 STC 274 (Mad).

Sankaralinga Nadar & Brosection (TMM) v CIT (1929) 4 ITC 226 (Mad).

Shreeram Durgaprasad & Fathechand Narsingdas (export) firm (R.B. Seth) v CIT
(1988) 170 ITR 23 (Bom).

Sreenivasappa v. State of Madras, (1964) 15 STC 784 (Mad).

Swadeshi Polytex Ltd v ITO (1983) 144 ITR 171 (SC).

Sources Of Hindu

ABSTRACT
This project aims at introducing the concept of best judgment assessment and critically
analyzing it. It deals with the application of this assessment in the present times and the recent
developments by the Indian judiciary with respect to this concept. Based on the hypothesis
that the judicial pronouncements can significantly improve the practice of best judgment
assessment by the taxing authorities, I will try to explore its potential in the settlement of tax
disputes. It will take a look on various externalities such as volume of business, conduct of the
dealer, past records and similar facts are conditions which are the basis for a best judgment
assessment in relation to the growing need for effective tax management in 21 st century. It also

Sources Of Hindu

demonstrates that where, how and what kind of mistakes have been done by the assessing
officer while applying section 144 of IT act.