Best judgment assessment is a factual, quasi-judicial exercise; no true question of law arose and notice was refused.

Best judgment assessment under the Income-tax Act was treated as a quasi-judicial fact-finding exercise for the Income-tax Officer on the materials before him. The officer could reject oral evidence, make honest inspection and observation, and form a fair estimate of income, and that process was not open to review as a general appeal on evidence. As no departure from the statutory procedure was shown, the proposed issue was not a true question of law and notice was refused.

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Issues: Whether any question of law arose from the Income-tax Officer's assessment under the best judgment procedure so as to justify the issue of notice and a reference.

Analysis: The assessment under section 23(1) and section 23(2) of the Income-tax Act was treated as a question of fact for the Income-tax Officer alone to determine on the materials before him. The officer was entitled to reject the assessee's oral evidence, make his own honest inspection and observation, and form a fair estimate of income. Such an exercise was described as a quasi-judicial and confidential fact-finding process, not a matter open to review as if it were a general appeal on the weight of evidence. No departure from the statutory procedure was shown, and the proposed question was held not to be a true question of law.

Conclusion: No question of law arose; the request to issue notice was refused.

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