Section 144 & 144A-Best Judgment Assessment


Section 144 of the Income Tax Act covers the provisions relating to the “Best Judgment Assessment”. Here, an assessing officer makes an evaluation based on his best reasoning.

Section 144-Best Judgment Assessment


As per this section, if any person;

  1. fails to file the return as required U/S 139(1); or a belated return U/S 139(4) or a revised return U/S 139(5); or
  2. fails to comply with all the terms of a notice issued U/S 142(1) or; fails to comply with the direction issued U/S 142(2A); or
  3. after filing a return, fails to comply with all the terms of a notice issued U/S 143(2),

the assessing officer, shall, after taking into account all related material which he has gathered, after giving the taxpayer a chance of being heard, make the assessment of the total income or loss to the best of his judgment & determine the sum payable by the taxpayer on the grounds of such assessment.


Provided that the assessing officer shall give such opportunity by serving a notice calling upon the taxpayer to show cause, on a date & time to be mentioned in the notice, why the assessment should not be completed to the best of his judgment.

Provided further that the assessing officer need not give such opportunity in a case where; a notice U/S 142(1) has been issued before making of an assessment under this section.

The provisions of this section as they stood directly before their amendment by the Direct Tax Laws (Amendment) Act, 1987 (4 of 1988), shall apply to & in relation to any assessment for the assessment year beginning on the 1st day of April, 1988, or any earlier AY and; references in this section to the other provisions of this Act shall be construed as references to those provisions as for the time being in force & applicable to the relevant AY.

U/S 144; though the assessing officer concludes the assessment from information and documents available with him and as per his best judgment; there are specific guidelines he needs to follow. Judicial Decisions set these guidelines from time to time.

Section 144A

Under this section, a Joint Commissioner may, on his own motion or when the assessing officer refers him or when an assessee makes an application, call for & study the record of any proceeding in which an assessment is pending and, if he acknowledges that, having respect to the nature of a case or the amount involved or for any other reason, it is essential or expedient so to do, he may give such directions as he thinks fit for the direction of the assessing officer to enable him to finish the assessment & such guidelines shall be binding on the assessing officer :

Provided that no directions which are biased to the assessee shall be issued before an opportunity is given to the taxpayer to be heard.

For the purposes of this section; no direction as to the lines on which an investigation connected with the assessment should be made shall be deemed to be a direction prejudicial to the assessee.

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