Mandatory notice and hearing before best judgment assessment were absent, so the assessment and demand notice were quashed.

A best judgment assessment under the Mysore Agricultural Income-tax Act, 1957 was unsustainable where the assessee had not been served with the statutory notice required before the demand notice, and the mandatory opportunity to explain or show cause under section 19(4) was not afforded. The record also did not show any proposition notice preceding the assessment. As compliance with the notice and hearing requirements was absent, the assessment could not be treated as validly made under the statutory scheme, and the consequential notice of demand was quashed.

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Issues: Whether the assessment and the consequent notice of demand were vitiated for failure to comply with the statutory requirement of notice and opportunity before a best judgment assessment under the Mysore Agricultural Income-tax Act, 1957.

Analysis: The petitioners had not been served with the notice contemplated by section 31 before the demand notice was issued. The material also showed that the mandatory opportunity required before making a best judgment assessment under section 19(4) was not afforded, and no proposition notice calling upon the assessee to explain or show cause was shown to have been issued. In these circumstances, the assessment could not be sustained as one validly made under the applicable statutory scheme.

Conclusion: The assessment and the consequential notice of demand were quashed in favour of the assessee.

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