9911796707
TMI Blog1987 (6) TMI 100X X X X Extracts X X X X X X X X Extracts X X X X ..... e Income-tax Officer drew an inference that the assessee was wilfully failing to comply with the notices issued. He, therefore, proceeded to make an ex parte assessment to the best of his judgment. He found on scrutiny of the Profit Loss A/c that the interest payment of Rs. 1,60,800 was excessive. There were several cash credits but these were not supported by evidence regarding the genuineness. The Income-tax Officer, therefore, ignored the loss returned and assessed at an estimated income of Rs. 30,000. 3. For the year 1977-78, the assessee had repeated his indifference to the department's notices. In this case also, after filing a return of loss of Rs. 54,508, the assessee did not produce any evidence to support the claim for loss. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egarding the non-compliance of the various notices issued by the Income-tax Officer. It is quite clear that the assessee has been indifferent to the notices. He did not even file a copy of the balance sheet of the company even when it was specifically asked for. It will be difficult for an Income-tax Officer to make any worthwhile scrutiny of accounts without balance sheet. The Income-tax Officer, therefore, was entitled to make an assessment under s. 144. That section enables him to make an assessment after taking into account all the relevant materials which the Income-tax Officer has gathered. 7. Now the section requires the Income-tax Officer to make a best judgment assessment if there is default of the notices. In other words, it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tances that the Madras High Court made the observation. This will be clear when we see the submissions of the assessee before the High Court which are given. It was submitted that whatever may be the default of the assessee it is the duty of the Income-tax Officer, even while making a best judgment assessment to place before the assessee any material which the Officer had gathered on the basis of any outside enquiry made by him. It should be noted that the emphasis in the submission was the assessee's right to know the material gathered by the Income-tax Officer on the basis of an outside enquiry. The High Court observed as follows : "The problem before us, however, is whether in any assessment made by the ITO under s. 144 of the Act foll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wers of the Appellate Asst. Commissioner necessarily must be exercised in such a way that the assessee does not get any benefit which it was not entitled to. 10. At the same time, it is undeniable that the Appellate Asst. Commissioner has powers to set aside an ex parte assessment also. In order to reconcile these various provisions, we should give a finding that on an order of the Appellate Asst. Commissioner setting aside an ex parte assessment the Income-tax Officer is only to reappraise the materials on records and frame an assessment on an estimated basis, on the basis of that material and further, in case he has framed an assessment by utilising any material which he has gathered by his enquiries and which he has not placed before t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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