Best judgment assessment challenge extends to disputed suppression of books; section 27 application is not a condition precedent.

Section 27 is an enabling remedy limited to cases where a taxpayer was prevented from filing a return or complying with notice requirements, and it does not govern a dispute where the existence or suppression of books of account is denied and found against the assessee on evidence. The statutory right of appeal against a best judgment assessment under section 23(4) extends to challenging whether the assessing officer was justified in disregarding the books and adopting best judgment. An application under section 27 was therefore not a prerequisite to contesting the finding of suppression in appeal.

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Issues: Whether an assessee, in an appeal against a best judgment assessment made under section 23(4) of the Indian Income-tax Act, could challenge the finding that books of account were suppressed without first making an application under section 27, and whether that contention was open in the appeal against assessment.

Analysis: Section 27 was held to be an enabling provision confined to the specific situations stated in it, namely prevention from making the return, non-receipt of the relevant notice, absence of reasonable opportunity to comply, or prevention by sufficient cause from complying with the notices. It did not apply to a case where the assessee denied the existence of books of account and the Income-tax Officer found, on the evidence, that such books existed or had been suppressed. The right of appeal under section 30 against the quantum of assessment was held to include the challenge whether the Income-tax Officer was justified in disregarding the books and proceeding on best judgment under section 23(4).

Conclusion: An application under section 27 was not a condition precedent to raising the contention in appeal, and the assessee was entitled to contest in the appeal the finding that books of account were suppressed.

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