Sec 144/145(3) of it ac t61best judgement asst.

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Querist : Anonymous

Querist : Anonymous (Querist)

30 November 2011 can assessee himself prefer best judgement asst. u/s 144
read with sec145(3) to avoid litigation and additions if
any u/s 40A(3)?

pl.suggest with case laws if any.

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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13 December 2011 Assessment is made by the department. The department has sole discretion over the type of assessment to be made. The assessee does not have the option to choose the type of assessment.
Further, assessment under Section 144 is made only when the assessee has made either of the following defaults:
If any person—
(a) fails to make the return required [under sub-section (1) of section 139] and has not made a return or a revised return under sub-section (4) or sub-section (5) of that section, or
(b) fails to comply with all the terms of a notice issued under sub-section (1) of section 142 [or fails to comply with a direction issued under sub-section (2A) of that section], or
(c) having made a return, fails to comply with all the terms of a notice issued under sub-section (2) of section 143

Further Section, 145(3) reads as under:
Where the Assessing Officer is not satisfied about the correctness or completeness of the accounts of the assessee, or where the method of accounting provided in sub-section (1) or accounting standards as notified under sub-section (2), have not been regularly followed by the assessee, the Assessing Officer may make an assessment in the MANNER provided in section 144.

“In the manner provided in Section 144” means that the assessing officer will make the assessment to the best of his judgement. It does NOT MEAN THAT THE ASSESSMENT WILL BE MADE U/S 144. The assessment will be made under the Section under which the proceedings are already going on.
For instance, if the AO is making scrutiny assessment u/s 143 and he is not satisfied with the correctness of the books he will make THE ASSESSMENT TO THE BEST OF HIS JUDGEMENT. The assessment order will be passed u/s 143 AND NOT UNDER SECTION 144

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