Best judgment assessment remand allowed, but appellate direction granting evidentiary opportunity was impermissible in substance.

In an appeal against an ex parte best judgment assessment under section 144 of the Income-tax Act, the appellate authority could set aside the assessment and remand the matter for fresh enquiry where the income estimate lacked a real basis and proper investigation was required. However, it could not direct the Assessing Officer to afford reasonable opportunity for production of evidence and material, because that would effectively confer the benefit associated with section 146 in a section 144 assessment. The remand was therefore sustained, but the additional direction granting such opportunity was deleted.

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Issues: Whether, in an appeal against an ex parte best judgment assessment under section 144 of the Income-tax Act, 1961, the appellate authority could set aside the assessment and direct a fresh assessment after proper enquiry, and whether it could further direct the Assessing Officer to afford reasonable opportunity for production of evidence and material.

Analysis: The assessment had been made ex parte under section 144 after non-compliance with notices under sections 139(2) and 142(2). The appellate authority was justified in setting aside the assessment and remitting the matter for fresh assessment because the estimation of income had no real basis on the record and required proper investigation. However, by directing the Assessing Officer to grant reasonable opportunity for production of evidence and material, the appellate authority effectively conferred the assessee the benefit of section 146 in the context of a section 144 assessment, which was not warranted.

Conclusion: The direction setting aside the assessment and requiring fresh assessment was upheld, but the further direction to allow reasonable opportunity for production of evidence was deleted.

Ratio Decidendi: In an appeal from a best judgment assessment under section 144, the appellate authority may set aside the assessment for fresh enquiry where the estimate lacks basis, but it cannot add a direction that in substance grants the assessee the benefit of section 146.

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