Best judgment assessment challenge must follow the statutory remedy first, not an appeal against tax quantum alone.

A best judgment assessment under section 23(4) could not be challenged in an appeal against that assessment alone on the ground that there was sufficient cause for non-compliance with the notice. The assessee had to pursue the statutory remedy under section 27 to question the validity of the assessment, and only thereafter use the ordinary appellate remedies if necessary. The appellate authority therefore could not entertain an independent objection to the basis of the section 23(4) assessment while dealing only with the appeal against tax quantum. The referred question was answered in the affirmative.

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Issues: Whether, in an appeal against an assessment made under section 23(4), the Appellate Assistant Commissioner could entertain an objection that the assessment ought not to have been made under that provision in the absence of an application under section 27.

Analysis: The right of appeal depends on statute. Where the assessment is in fact made as a best judgment assessment under section 23(4), the assessee cannot, in an appeal against that assessment alone, reopen the question whether there was sufficient cause for non-compliance with the notice so as to challenge the validity of the assessment under section 23(4). That question had to be pursued through the statutory remedy under section 27, followed by the ordinary appellate remedies if necessary. The authority rejected the attempt to treat the appeal against the quantum of tax as including an independent challenge to the validity of the assessment under section 23(4).

Conclusion: The objection was not entertainable in the appeal against the section 23(4) assessment without resort to section 27, and the answer to the referred question was in the affirmative.

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