Best judgment assessment under Section 144

What this section is

Section 144 empowers the AO to make a best judgment assessment if the assessee fails to file a return, fails to comply with notices under 142(1) or 143(2), or fails to produce evidence. The AO uses available material — 26AS, AIS, third-party data — and applies an estimate.

When it is issued

Either as a show-cause before passing a 144 order, or as a 144 order itself after non-compliance.

What you should do

1. 1Reply to the show cause without delay — the SCN itself is your last chance.
2. 2If a 144 order is already passed, evaluate whether to file an appeal under Section 246A or apply for revision under Section 264.
3. 3Where the non-compliance was due to genuine reasons (illness, technical issue), prepare an affidavit and reasonable cause submission.
4. 4Pay the demand or seek a stay before the assessment becomes a recovery proceeding.

Documents typically needed

• Original notices issued by the AO
• Reasonable cause documents (medical, technical glitch screenshots, etc.)
• All documents you would have filed had you complied

Common mistakes

• Believing that an ex-parte order cannot be challenged — it can, on the merits and on procedural grounds.
• Not paying 20% of the demand to keep recovery in abeyance during appeal.