Law:

Section:

Section 144 of the Income-tax Act, 1961 - Best assessment - Assessment years 1966-67 to 1969-70 - Income-tax Officer served a notice on assessee under section 139(2) but assessee did not comply with it - Thereafter, notice was issued under section 142(1) calling upon assessee to produce books of account maintained by it - Thereupon assessee prayed for an adjournment which was allowed but again there was default in appearance - Income-tax Officer finding that assessee was a habitual defaulter proceeded to frame assessment on basis of best - On appeal, AAC affirmed order of ITO - Hence instant writ petition was filed wherein assessee contended that he had suffered losses during relevant years and, therefore, he should not have been assessed on income calculated by ITO - Whether since no material was placed before ITO to show that assessee had incurred losses during assessment years under consideration, best assessment could not be said to be illegal or unjust - Held, yes FACTS The ITO served notice on the assessee, in the first instance, under section 139(2), but the assessee did not comply with the notice. Thereafter notice was issued under section 142(1) calling upon the assessee to produce the books of account maintained by it. Thereupon the assessee prayed for an adjournment, which was allowed but again there was default in appearance. The ITO found that the assessee was a habitual defaulter and there was no alternative left to him but to proceed to frame the assessment on the basis of best . Aggrieved by the ITO's order, the petitioner filed appeal before the AAC which was dismissed. On revision petition, the Additional Commissioner held that the earlier assessments were sufficient basis for making the best assessment in the instant case. On instant writ petition, the assessee contended that he had suffered losses during the relevant years and, therefore, they should not have been assessed on an income calculated by ITO. HELD The assessee had been assessed under section 23(3) of the 1922 Act and section 144 of 1961 Act right from the assessment years 1954-55 to 1964-65. The assessee had never been assessed for an income less than Rs. 11 thousand in any of…

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