Section 144 of Income Tax Act for AY 2023-24

Updated notes on best judgment assessment section 144 of Income Tax Act 1961 as amended by the Finance Act 2022 and Income-tax Rules, 1962.

Amended and updated notes on section 144 of Income Tax Act 1961 as amended by the Finance Act 2022 and Income-tax Rules, 1962. Detail discussion on provisions and rules related to best judgment assessment.

Chapter XIV (Sections 139 to 158) of the Income Tax Act 1961 deals with the provisions related to procedure for assessment. Section 144 of IT Act 1961-2022 provides for best judgment assessment.

Recently, we have discussed in detail section 143 (Assessment) of IT Act 1961. Today, we learn the provisions of section 144 of Income-tax Act 1961 as amended by the Finance Act 2022. The amended provision of section 144 is effective for financial year 2022-23 relevant to the assessment year 2023-24.

In this article, you will learn detail of the provisions of section 144 of the Income Tax Act, 1961 Bare Act read with the Income-tax Rules, 1962 as provided by Ministry of Law and Justice, Government of India.

Section-144: Best Judgment Assessment

Section 144 (1):

If any person—

  • (a) fails to make the return required under sub-section (1) of section 139 and has not made a return or a revised return under sub-section (4) or sub-section (5) or an updated return under sub-section (8A) of that section, or
  • (b) fails to comply with all the terms of a notice issued under sub-section (1) of section 142 or fails to comply with a direction issued under sub-section (2A) of that section, or
  • (c) having made a return, fails to comply with all the terms of a notice issued under sub-section (2) of section 143,

[Clause(a) in sub-section (1) of section 144 amended (inserted) w.e.f. 1-April-2022 by the Finance Act 2022]

the Assessing Officer, after taking into account all relevant material which the Assessing Officer has gathered, shall, after giving the assessee an opportunity of being heard, make the assessment of the total income or loss to the best of his judgment and determine the sum payable by the assessee on the basis of such assessment:

Provided that such opportunity shall be given by the Assessing Officer by serving a notice calling upon the assessee to show cause, on a date and time to be specified in the notice, why the assessment should not be completed to the best of his judgment:

Provided further that it shall not be necessary to give such opportunity in a case where a notice under sub-section (1) of section 142 has been issued prior to the making of an assessment under this section.

Section 144 (2):

The provisions of this section as they stood immediately before their amendment by the Direct Tax Laws (Amendment) Act, 1987 (4 of 1988), shall apply to and in relation to any assessment for the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year and references in this section to the other provisions of this Act shall be construed as references to those provisions as for the time being in force and applicable to the relevant assessment year.


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