TMI Blog1973 (2) TMI 47X X X X Extracts X X X X X X X X Extracts X X X X ..... ejected by the Income-tax Officer, the respondent was assessed on the best judgment method without being told what materials were being used against it for such assessment. The respondent took objection in the writ petition filed by it that such assessment without giving it an opportunity to explain was to be quashed. The single judge accepted the contention and allowed the writ petition; and the appeal is against that. We may just refer to one or two observations from the judgment of the single judge, which would make the position clear. The learned judge has stated in paragraph 3 of his judgment : " In the order of assessment the Income-tax Officer said that after rejecting the accounts of the assessee he made enquiries and that he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dge, after considering this question, held that, when an Income-tax Officer gathered materials from a source other than the records relevant to the year of assessment, he had gathered materials on the basis of enquiry within the meaning of section 142(3) and, therefore, he would be bound to give an opportunity to the assessee to have his say in respect of the materials so gathered (vide paragraph 4 again). Before us, the question has been raised by the counsel for the revenue in a slightly different fashion : the counsel does not attack the reasoning of the single judge pointed out above. Before we go to this aspect, we shall briefly refer to the provisions of the Act which we will have to consider in deciding the question. Section 142 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n order in writing, assess the total income or loss of the assessee, and determine the sum payable by him or refundable to him on the basis of such assessment." Then comes section 144 providing for best judgment assessment. The section provides: " If any person-- (a) fails to make the return required by any notice given under sub-section (2) 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 (c) having made a return, fails to comply with all the terms of a notice issued under sub-section (2) of section 143, the Income-tax Officer, after taking into accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the section. Thus, the manner, if at all, is provided under section 142(3) and not under section 144. The counsel for the revenue has rightly conceded that the assessment that has to be made after the accounts of the assessee are rejected under section 145(2) is not an assessment under section 144, but is only an assessment " in the manner provided in section 144 ". The counsel has also conceded, again rightly, that, though section 144 provides for best judgment assessments, all best judgment assessments are not covered by section 144. We may refer to Income-tax by Kanga and Palkhivala, 6th edition, volume I, page 762, where this question is discussed. Since this is not disputed by the counsel for the revenue, we do not propose to go into ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ume this), even then, the present case will not come within the exclusion contemplated by section 142(3), since the assessment in this case is admittedly under section 143(3) of the Act, and not under section 144 (vide the assessment order, exhibit P-1). We point out in this connection that an assessment under section 143(3) is also a best judgment assessment. The next question urged by the counsel for the revenue is that this is not a case for article 226 of the Constitution, since the failure in complying with the principle of audi alteram partem was not raised either before the appellate authority or the revisional authority. (We point out at this stage that the respondent questioned the assessment before the appellate authority and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Still further, the Supreme Court has pointed out, it cannot be laid down " as an inflexible rule of law " that the superior court must deny the writ when an inferior court or Tribunal passes an order discarding all principles of natural justice. In the second decision, the Supreme Court has followed its earlier decision and affirmed the principles contained therein. In the case before us, the appeal and revision were to two departmental officers, the Appellate Assistant Commissioner and the Commissioner of Income-tax: and the complaint now is that the principle of natural justice of audi alteram partem was not complied with. Moreover, the single judge has considered this question elaborately and has chosen to exercise his discretion in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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