Best judgment assessment requires prior hearing; assessment and demand notices were quashed for lack of reasonable opportunity.

A best judgment assessment under section 19(4) of the Mysore Agricultural Income-tax Act, 1957 requires the assessing authority to disclose the proposed basis of assessment and give the assessee a reasonable opportunity to show cause before the assessment is made. Where the record shows that no such hearing opportunity was afforded, the assessment cannot be sustained. The assessment order and the demand notices issued pursuant to it were quashed for breach of the statutory requirement of fair hearing under the second proviso to section 19(4).

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Issues: Whether an assessment to the best of judgment under section 19(4) of the Mysore Agricultural Income-tax Act, 1957 could be sustained when the assessee was not given a reasonable opportunity of being heard before the basis of the proposed assessment was adopted.

Analysis: An assessing authority proceeding under section 19(4) must put the basis of the proposed best judgment assessment to the assessee and afford an opportunity to show cause against it. The record showed that no reasonable opportunity of hearing, as contemplated by the second proviso to section 19(4), was given before the assessment was made.

Conclusion: The assessment order and the demand notices issued pursuant to it could not be sustained and were quashed.

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