Best judgment assessment appeals are limited to quantum when section 27 provides the proper remedy against ex parte proceedings.

Under the Income-tax Act, 1922, an appeal against a best judgment assessment under section 23(4) was confined to the amount of income assessed or tax determined where the assessee's grievance fell within section 27. The court read the statutory scheme as requiring an assessee who complained of non-receipt of notice or lack of opportunity to first seek cancellation of the ex parte assessment under section 27 and, if necessary, appeal from that order. In that setting, the assessee could not use a section 30(1) quantum appeal to challenge the validity of proceedings under section 34(1)(a) read with section 22(2). The Tribunal was justified in refusing to entertain that jurisdictional challenge.

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Issues: Whether, after a best judgment assessment under section 23(4) of the Income-tax Act, 1922, the assessee could in an appeal under section 30(1) challenge the validity of the proceedings under section 34(1)(a) read with section 22(2), or whether the appeal was confined to the quantum of income and tax.

Analysis: The statutory scheme was read as distinguishing between cases where section 27 applied and cases where it did not. Where the assessee complained that he had sufficient cause for not making a return or for not receiving the relevant notice, the proper remedy was an application under section 27 to have the ex parte assessment cancelled and a fresh assessment made. In such a case, the assessee could challenge the assessment order through the section 27 route and, if necessary, by an appeal against the order under section 27. An appeal under section 30(1) against an assessment under section 23(4) was held to be limited to the amount of income assessed or tax determined, and not to the validity of the assessment proceedings, when the facts showed that section 27 was attracted. On the facts found, the assessee was within the ambit of section 27 because the grievance was non-receipt of notice and absence of opportunity to comply.

Conclusion: The assessee could not raise the challenge to the validity of the section 34 proceedings in the quantum appeal under section 30(1); the Tribunal was justified in refusing to entertain that contention.

Final Conclusion: The right of appeal against a best judgment assessment was confined to quantum where the assessee's grievance fell within section 27, and the assessee had to pursue the remedy under that provision instead of challenging jurisdictional validity in the quantum appeal.

Ratio Decidendi: Where section 27 affords a specific remedy against an ex parte best judgment assessment, the assessee cannot bypass that remedy and use a section 30 appeal to dispute the validity of the assessment proceedings; the appeal lies only on quantum.

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