1967 (9) TMI 25 - HC - Income Tax

Profits estimated at flat rates which was based on comparable cases - no details of the cases which the ITO considered as comparable were ever furnished to the assessee - violation of the settled principle on the subject and the provision of s. 142(3)- assessment on estimated basis was invalid

Summary

The High Court of Kerala ruled in a reference under section 256(1) of the Income-tax Act, 1961 for the assessment year 1963-64 that the assessment order under section 143(3) was vitiated due to non-compliance with the provisions of section 142(3). The Income-tax Officer's reliance on comparable cases without providing details to the assessee was deemed a violation of natural justice principles. The question was answered in favor of the assessee regarding the head office assessment. The judgment will be sent to the Appellate Tribunal as required by the Income-tax Act.