Best judgment assessment requires a reasonable opportunity to produce accounts before adverse action is taken.

A best judgment assessment cannot be sustained where the assessee is not given a reasonable opportunity to produce account books. The authorities proceeded on the assumption that business continued during the relevant period, but the assessee stated that the books were in another court and would be produced shortly. As no time was allowed for their return and production, the assessment was held invalid. The prior assessment on which it rested had also been treated as invalid, so the impugned assessment could not stand on that basis. The authorities were left free to proceed afresh under clause (2) of section 9 if the accounts were still not produced after due time.

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Issues: Whether the acquittal was justified where the assessment to the best of judgment was made without giving the assessee a reasonable opportunity to produce the account books.

Analysis: The assessment proceeded on the footing that the assessee had continued business during the relevant period, but he had stated that the account books were in another court and that he would produce them shortly. The authorities did not allow time for the books to be returned and produced. In those circumstances, the best judgment assessment could not be sustained. The earlier assessment on which the present assessment was based had also been treated as invalid, and the present assessment could not stand on that footing. However, the authorities were left free to proceed under clause (2) of section 9 if the assessee failed to produce the accounts after being given time.

Conclusion: The acquittal was upheld because the impugned assessment was not valid in the absence of a reasonable opportunity to produce the accounts.

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