Regular assessment versus best judgment assessment turns on relevant books actually produced and the material used for assessment.

Documents are "required" under Section 22(4) only when they are relevant to assessment, and an assessment based on books actually produced is a regular assessment under Section 23(3) rather than a best judgment assessment under Section 23(4). Where the officer completes the assessment on existing material and does not estimate concealed income or rely on unavailable material, failure to produce other books does not convert the assessment into one under Section 23(4). On that footing, the assessee was held entitled to the ordinary appellate remedy, and the reference was answered in favour of the assessee with costs.

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Issues: Whether an assessment made after failure to produce books of account that were not required for assessment should be treated as a best judgment assessment under Section 23(4) of the Income-tax Act or as a regular assessment under Section 23(3) of the Income-tax Act.

Analysis: The expression "require" in Section 22(4) was read as referring to accounts or documents that could furnish relevant material for assessment. Where the assessment was actually completed on the basis of the books produced and the officer did not proceed on an estimate of concealed income or on material unavailable before him, the omission to produce other books did not make the assessment one based on best judgment. The distinction between the two sub-sections was treated as depending on whether the assessment was founded on proper material or on an / guess in the absence of such material.

Conclusion: The assessment was not under Section 23(4) but under Section 23(3), and the assessee was entitled to the ordinary appellate remedy.

Final Conclusion: The reference was answered in favour of the assessee, with costs awarded accordingly.

Ratio Decidendi: Documents can be treated as "required" under Section 22(4) only when they are relevant to assessment, and an assessment made on the basis of material actually produced is a regular assessment under Section 23(3), not a best judgment assessment under Section 23(4).

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