Section 144 → Section 162
Best Judgment Assessment
Quick Answer
Section 144 of the Income Tax Act, 1961 (Best Judgment Assessment) corresponds to Section 162 of the Income-tax Act, 2025, effective 1st April 2026. Status: Retained.
What changed for Section 144
Section 144 of the 1961 Act sets out the rules on best judgment assessment. The AO assesses the tax to the 'best of his judgment' if the taxpayer fails to file a return or comply with a 142(1) notice.
The new code maps this to Section 162: the provision is retained and renumbered as Section 162 of the Income-tax Act, 2025, applying from 1st April 2026. Retained. This is an 'Ex-parte' assessment where the department uses its own data (AIS) to compute tax if you don't cooperate.
On the ground, changes to Section 144 carry a Very High impact. Extremely risky for non-compliant taxpayers.
Sec 144
Provision Summary
The AO assesses the tax to the 'best of his judgment' if the taxpayer fails to file a return or comply with a 142(1) notice.
Sec 162
Provision Summary
Retained. This is an 'Ex-parte' assessment where the department uses its own data (AIS) to compute tax if you don't cooperate.
Key Changes & Highlights
- Mandatory 'Show Cause Notice' must be issued before passing a Best Judgment order.
Related Sections
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Frequently Asked Questions
What does Section 144 of the Income Tax Act 1961 deal with?
Section 144 of the Income Tax Act, 1961 covers best judgment assessment. The AO assesses the tax to the 'best of his judgment' if the taxpayer fails to file a return or comply with a 142(1) notice.
Where does Section 144 of the ITA 1961 go under the Income-tax Act, 2025?
Section 144 of the Income Tax Act, 1961 maps to Section 162 of the Income-tax Act, 2025, effective 1st April 2026 (status: Retained). Retained. This is an 'Ex-parte' assessment where the department uses its own data (AIS) to compute tax if you don't cooperate.
Why does the change to Section 144 matter for taxpayers?
The transition impact for Section 144 is rated Very High. Extremely risky for non-compliant taxpayers.
What are the key changes to Section 144 under the Income-tax Act, 2025?
Mandatory 'Show Cause Notice' must be issued before passing a Best Judgment order. These points are specific to Section 144 (Best Judgment Assessment).
Disclaimer: This mapping of Section 144 (Best Judgment Assessment) to Section 162 of the Income-tax Act, 2025 is for educational and reference purposes only, based on publicly available drafts and circulars. As Section 144 is currently marked Retained, always confirm its treatment with a qualified Chartered Accountant before filing or making compliance decisions.
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