Court Upholds Best Judgment Assessment Validity for 2009-10

DR. KM MEHABOOB Versus DEPUTY COMMISSIONER OF INCOME TAX

DR. KM MEHABOOB Versus DEPUTY COMMISSIONER OF INCOME TAX - TMI Issues:
1. Validity of assessment for the assessment year 2009-10 under Section 144 read with Sections 153C and 153A of the Income Tax Act.
2. Challenge against assessments completed for the six assessment years from 2003-04 to 2008-09 under Section 153C read with Section 153A(1).

Issue 1: Validity of assessment for the assessment year 2009-10:
The appellant contested the assessment for the assessment year 2009-10, arguing that Section 153C read with Section 153A only applies to six preceding assessment years. However, the assessment for 2009-10 was made under Section 144 due to the appellant's failure to file a return. The court noted that the best judgment assessment for 2009-10 was valid under Section 144, despite mentioning Sections 153C and 153A, as the Assessing Officer had jurisdiction over the appellant. The appellant's right to appeal before the CIT (Appeals) on merit was emphasized, as the assessments were not considered on merit by the court.

Issue 2: Challenge against assessments for the six assessment years:
The appellant challenged the assessments for the six years from 2003-04 to 2008-09 under Section 153C read with Section 153A(1), claiming that the Assessing Officer at Mangalore did not record satisfaction before transferring files. The court clarified that under Section 153C, the transfer of materials to another Assessing Officer is based on whether they relate to another assessee, not necessarily proving undisclosed income. The court held that the Assessing Officer at Mangalore correctly transferred the files to the appellant's Assessing Officer at Kozhikode, who then completed the assessments. The appellant's argument that satisfaction was required to be recorded before transfer was rejected, emphasizing that the appellant's regular Assessing Officer was best suited to assess based on familiarity with the appellant's transactions and income.

In conclusion, the court dismissed the Writ Appeals as lacking merit, granting the appellant one month to file appeals. The court directed that payments made under interim orders should be considered in future applications for interim relief. The dismissal was accompanied by the provision of limited relief to the appellant for further appeal processes.