Best judgment assessment on tea income must await completed central tax assessment before lawful reassessment.

Agricultural income-tax on tea income may not be finally and lawfully determined by best judgment assessment before the corresponding central income-tax assessment is completed. The Assam Agricultural Income-tax framework requires the tea income computation to follow the central assessment, subject to statutory deductions and the applicable rules. Where the central assessments were still pending and the assessee had sought cancellation and fresh assessment, the impugned assessments, demand notices, recovery steps and attachment were set aside, and the matter was left open for reconsideration after production of the central assessment orders.

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Issues: Whether the best judgment assessments under section 20(4) of the Assam Agricultural Income-tax Act, 1939, the consequential demand notices and recovery proceedings, and the attachment could be sustained when the corresponding Central income-tax assessments for the tea income were not yet available and an application under section 21 of the Act was pending.

Analysis: The agricultural income-tax liability in respect of tea income depended upon the computation of the income as determined under the central income-tax law, subject to the statutory deductions and the scheme reflected in the Assam Agricultural Income-tax Act, 1939, the Assam Agricultural Income-tax Rules, 1939, and the Income-tax Rules, 1962. The record showed that the central assessments had not been finalised for the relevant years when the best judgment assessments were made, and the assessee had invoked section 21 seeking cancellation and fresh assessment. In these circumstances, the Court found it to require the agricultural income-tax authority to consider the section 21 application after receipt of the central assessment orders, so that the assessment could be made in accordance with law on a proper and complete basis.

Conclusion: The impugned assessments were set aside, the demand notices and recovery proceedings were quashed, and the attachment was released, while the authority was directed to dispose of the section 21 application after production of the central assessment orders. The relief was, therefore, substantially in favour of the assessee.

Ratio Decidendi: Where agricultural income-tax on tea income cannot be properly determined without the completed central income-tax assessment, a best judgment assessment may be set aside and the matter kept open for lawful reconsideration on the basis of the final central assessment orders.

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