Special audit non-compliance beyond assessee's control barred best judgment assessment and the resulting tax order was set aside.

Special audit non-compliance attributable to a nominated chartered accountant's refusal, rather than any failure by the assessee, could not justify best judgment assessment. The Court treated the audit lapse as beyond the assessee's control and found no default in complying with the direction under the Income-tax Act. As the statutory foundation for invoking best judgment assessment was absent, the assessment could not stand. The High Court's judgment was set aside on that basis.

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Issues: Whether the assessee could be subjected to best judgment assessment under Section 144(b) of the Income-tax Act, 1961, when the special audit directed under Section 142(2A) could not be completed because the nominated chartered accountant declined to act for reasons not attributable to the assessee.

Analysis: The refusal of the chartered accountant to undertake the audit was treated as a matter beyond the assessee's control. On the facts, there was no default or failure by the assessee to comply with the direction for special audit. The foundation for invoking best judgment assessment was therefore absent.

Conclusion: The best judgment assessment and the High Court's judgment were set aside, as the assessee was not at fault for non-compliance with the audit direction.

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