1979 (12) TMI 10 - HC - Income Tax

Summary

Issues:
1. Challenge to best judgment assessment under Income Tax Act for multiple assessment years.
2. Dismissal of appeals before the AAC.
3. Revision petition dismissal by the Additional Commissioner of Income-tax.
4. Allegation of unfair and dishonest income estimation by the ITO.
5. Previous assessment history and habitual defaulter status of the assessee.
6. Legal validity of best judgment assessment.

Analysis:
The judgment pertains to connected writ petitions challenging the best judgment assessment made by the Income Tax Officer (ITO) for the assessment years 1966-67, 1967-68, 1968-69, and 1969-70. The ITO proceeded with the best judgment assessment after the assessee failed to comply with notices under relevant sections of the Income Tax Act. The Additional Commissioner of Income-tax dismissed the appeals filed by the petitioner before the AAC, citing the assessee's habitual default and past ex parte assessments under section 144 of the Act. The Additional Commissioner held that the earlier assessments provided a sufficient basis for the best judgment assessment in the current case.

The petitioner contended that the ITO's income estimation of Rs. 19,600 for each year was unfair and not honest, claiming losses during the relevant years. However, the court noted the assessee's consistent history of assessments under different sections of the Act, with assessed incomes not falling below a certain threshold. The court found no evidence of losses presented before the ITO and emphasized the lack of cooperation from the assessee over the years. The judgment highlighted the legal principle that a best judgment assessment must be based on an honest and fair estimate by the assessing officer, considering various factors including local knowledge and previous assessments.

Ultimately, the court dismissed the writ petitions, ruling that the best judgment assessment in this case, though arbitrary, was not illegal or unjust. The judgment cited precedents emphasizing the need for the assessing officer to make a fair and honest estimate based on available information. The court concluded by rejecting the petitions without awarding costs to either party.