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2006 (8) TMI 443 - AT - Income TaxBest judgment assessment - Form of appeal and limitation - bar in admission of appeal provided under the provisions of section 249(4 (a) - survey u/s133A - whether in the case of a builder net profit rate of 15 per cent applied by the learned CIT(A) for each assessment year is reasonable or not ? - HELD THAT:- If an appeal is filed beyond time-limit but after payment of taxes as stipulated in section 249(4), it cannot be said that the requirements of section 249(4) are not complied with. The only defect in such appeal is that the appeal has been filed beyond prescribed time-limit. In such a case, the appellate authority must consider the assessee’s request for condoning the delay in filing the appeal. If he is satisfied that the delay was attributable to reasonable and sufficient cause, the appellate authority must condone the delay and entertain the appeal. In our view, the order of the learned CIT(A) does not suffer from any legal infirmity and, therefore, we reject the grounds of appeal Nos. 1 and 2 raised by the department. Best judgment assessment - In our view, if the appellate authorities, on the fact and circumstances, conclude that the best judgment assessment made by the Assessing Officer is unreasonable or excessive, the appellate authorities can certainly set right any unjustice done to the assessee by the Assessing Officer. The Assessing Officer is entitled to make a best judgment assessment in the absence of books of account but such assessment cannot be arbitrary and must be reasonable. The assessment should not penalise the assessee because the books of account are not maintained or the same are defective. The duty of the Assessing Officer, in our view, is to make a fair and reasonable estimate of the total income of the assessee chargeable to tax as per the provisions of the Income-tax Act, 1961. Even if a best judgment assessment is made, the assessee cannot be saddled with a unjustifiable tax liability. Whether the net profit rate of 15 per cent directed by the learned CIT(A) causes any grievance to the revenue - HELD THAT:- In our view, the learned CIT(A) has rightly directed that the profits of the assessee’s business as a builder should be estimated by applying net profit rate of 15 per cent of the total consideration as per the sale agreements and also on the on money received by the assessee. In our view, the net profit rate of 15 per cent cannot be said to be on the lower side. It may be mentioned that even section 44AD prescribes net profit rate of 8 per cent only in the case of assessee engaged in the civil construction. In our view, the learned CIT(A) has decided the issue correctly and his order does not call for any interference. We, therefore, confirm his order for all the four assessment years. In the result, all the appeals of the revenue are dismissed.
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