Section 271
Section 271: best judgment assessment
Section 271 is the tax department's fallback when a taxpayer doesn't cooperate with the assessment process - if a person fails to file a return, doesn't respond to notices, or doesn't comply with an audit direction, the Assessing Officer can assess their income "to the best of his judgment," based on whatever material is available.
This explanation is AI-assisted and pending review by our CA/CS team. It is general information, not professional advice - always cross-check against the bare law text above or talk to our tax team for guidance specific to your situation.
When a best judgment assessment applies
The Assessing Officer may make a best judgment assessment if a person:
- Fails to furnish the return required under Section 263(1), (4), (5) or (6); or
- Fails to comply with all the terms of a notice issued under Section 268(1), or fails to comply with a direction issued under Section 268(5) (the special audit direction); or
- Having filed a return, fails to comply with all the terms of a notice issued under Section 270(8)
How the assessment is made
After taking into account all relevant material gathered, and after giving the assessee an opportunity of being heard, the Assessing Officer makes the assessment of total income or loss to the best of their judgment, and determines the sum payable by the assessee on that basis.
Show-cause notice before the assessment
Before making a best judgment assessment, the Assessing Officer must (subject to sub-section (3)) serve a show-cause notice on the assessee, specifying a date and time, asking why the assessment should not be completed on a best judgment basis.
When the show-cause notice isn't required
This opportunity need not be given separately where a notice under Section 268(1) was already issued to the assessee before the best judgment assessment is made.
Frequently asked questions
What triggers a best judgment assessment?
Failing to file the required return under Section 263, failing to comply with a notice under Section 268(1) or a special-audit direction under Section 268(5), or - after filing a return - failing to comply with a notice under Section 270(8).
Do I get a chance to explain myself before a best judgment assessment?
Generally yes, through a show-cause notice asking why the assessment shouldn't be completed on a best judgment basis - unless a notice under Section 268(1) was already issued to you before the assessment is made, in which case this separate opportunity isn't required.
Related sections
Want this applied to your actual filing, not just explained?
Get help responding to a best judgment assessment noticeLast updated 9 September 2026