Section 115WF empowers the Assessing Officer to make a best-judgment assessment of fringe benefits in three default situations: failure to file the return, failure to comply with a notice under s.115WD(2) or a direction under s.142(2A), or failure to comply with a scrutiny notice under s.115WE(2). The assessment must be on all relevant material and after a show-cause opportunity — except where a notice under s.115WD(2) was already issued. It is the FBT counterpart of s.144 and is governed by the settled best-judgment principles.
Historical context / FA amendment trail
Inserted by the Finance Act, 2005 w.e.f. AY 2006-07. Inapplicable from AY 2010-11 (s.115WM).
Operative consequences
• Available on non-filing, non-compliance with a s.115WD(2)/142(2A) notice/direction, or non-compliance with a s.115WE(2) notice.
• Must be a bona fide estimate on relevant material — not arbitrary or punitive (s.144 jurisprudence).
• Show-cause notice (first proviso) is mandatory, save where a s.115WD(2) notice was already issued.
Compiled for the bharattax.co Treatise on the Income-tax Act, 1961 (as amended by the Finance Act, 2026). Block 1 reproduces the statutory text verbatim from the Income-tax Act, 1961 (text as printed; the Chapter remains on the statute book but is inapplicable from AY 2010-11 by s.115WM). The Finance Act, 2026 makes no substantive change to Chapter XII-H. Not legal advice.
Case Laws & Commentary
Section 115WF — Best Judgment Assessment
Case Laws & Commentary · Income-tax Act, 1961 (as amended by the Finance Act, 2026) · bharattax.co Treatise
Chapter: XII-H — Income-tax on Fringe Benefits (Fringe Benefit Tax). Inserted by the Finance Act, 2005 with effect from assessment year 2006-07.
Operative life: FBT was levied for assessment years 2006-07 to 2009-10. By section 115WM (inserted by the Finance (No. 2) Act, 2009), the Chapter does not apply from assessment year 2010-11 onwards. The sections were NOT omitted — they remain on the statute book but are switched off prospectively.
Finance Act, 2026: Makes no substantive amendment to Chapter XII-H. (The Finance Act, 2026 carries only consequential cross-references to sections 115WD/115WH in a penalty provision; the FBT charge, scope and machinery are untouched.)
Part: C — Procedure for filing of return, assessment and payment.
Parallel: FBT analogue of section 144 (best-judgment assessment).
A. SECTION COMMENTARY
Section 115WF empowers the Assessing Officer to make a best-judgment assessment of fringe benefits where the employer (a) fails to file a return under 115WD(1) (and has not filed a belated or revised return), or (b) fails to comply with a notice under 115WD(2) or a direction under section 142(2A) (special audit), or (c) having filed a return, fails to comply with a scrutiny notice under 115WE(2). The assessment must be made on all relevant material gathered and after giving the assessee an opportunity of being heard via a show-cause notice — except where a notice under 115WD(2) was already issued before the assessment.
This is the FBT counterpart of section 144. The governing principles are therefore those settled under section 144: a best-judgment assessment must be a bona fide estimate based on relevant material and not arbitrary or vindictive; some honest guess-work is permitted but it cannot be capricious; and the principles of natural justice (the show-cause requirement built into the first proviso) must be observed. These principles apply to FBT through section 115WL.
No FBT-specific reported merits decision construes section 115WF; the section 144 jurisprudence governs.
B. STATUTORY POSITION (verbatim text)
Section 115WF, Income-tax Act, 1961:
115WF. If any person, being an employer— (a) fails to make the return required under sub-section (1) of section 115WD and has not made a return under sub-section (3) or a revised return under sub-section (4) of that section, or (b) fails to comply with all the terms of a notice issued under sub-section (2) of section 115WD or fails to comply with a direction issued under sub-section (2A) of section 142, or (c) having made a return, fails to comply with all the terms of a notice issued under sub-section (2) of section 115WE,
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 fringe benefits 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 as to 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 (2) of section 115WD has been issued prior to the making of an assessment under this section.
C. AUTHORITIES
Candour note: there is no FBT-specific reported decision on section 115WF. As the FBT mirror of section 144, it is governed by the settled best-judgment jurisprudence (bona fide estimate on relevant material; opportunity of hearing), imported through section 115WL.
C-1 Best-judgment principles (cognate, via s.115WL)
Counterpart of section 144 — bona fide estimate, natural justice
Principle: A best-judgment assessment must rest on relevant material and represent a fair and honest estimate; it cannot be arbitrary, capricious or punitive. The first proviso to 115WF imports the natural-justice requirement of a show-cause notice. These are the settled section 144 principles.
Source: Established section 144 jurisprudence (e.g. the classic statements in Laxminarayan Badridas v. CIT and State of Kerala v. C. Velukutty), applied to FBT through section 115WL.
Compiled for the bharattax.co Treatise on the Income-tax Act, 1961 (as amended by the Finance Act, 2026). Statutory text reproduced verbatim from the Income-tax Act, 1961 (text as printed in the Act, the Chapter remaining on the statute book but rendered inapplicable from assessment year 2010-11 onwards by section 115WM). Citations are stated as reported; rulings of the Authority for Advance Rulings and orders of the Tribunal are flagged as such. Where a section has not been judicially construed, that is stated candidly and the nearest governing authority (including the machinery provisions imported by section 115WL) is given. This material is for professional reference and is not legal advice.
Function in the statutory architecture
Section 115WF empowers the Assessing Officer to make a best-judgment assessment of fringe benefits in three default situations: failure to file the return, failure to comply with a notice under s.115WD(2) or a direction under s.142(2A), or failure to comply with a scrutiny notice under s.115WE(2). The assessment must be on all relevant material and after a show-cause opportunity — except where a notice under s.115WD(2) was already issued. It is the FBT counterpart of s.144 and is governed by the settled best-judgment principles.
Historical context / FA amendment trail
Inserted by the Finance Act, 2005 w.e.f. AY 2006-07. Inapplicable from AY 2010-11 (s.115WM).
Operative consequences
• Available on non-filing, non-compliance with a s.115WD(2)/142(2A) notice/direction, or non-compliance with a s.115WE(2) notice.
• Must be a bona fide estimate on relevant material — not arbitrary or punitive (s.144 jurisprudence).
• Show-cause notice (first proviso) is mandatory, save where a s.115WD(2) notice was already issued.
______________________________________________________________________________________________
Compiled for the bharattax.co Treatise on the Income-tax Act, 1961 (as amended by the Finance Act, 2026). Block 1 reproduces the statutory text verbatim from the Income-tax Act, 1961 (text as printed; the Chapter remains on the statute book but is inapplicable from AY 2010-11 by s.115WM). The Finance Act, 2026 makes no substantive change to Chapter XII-H. Not legal advice.
Case Laws & Commentary
Section 115WF — Best Judgment Assessment
Case Laws & Commentary · Income-tax Act, 1961 (as amended by the Finance Act, 2026) · bharattax.co Treatise
Chapter: XII-H — Income-tax on Fringe Benefits (Fringe Benefit Tax). Inserted by the Finance Act, 2005 with effect from assessment year 2006-07.
Operative life: FBT was levied for assessment years 2006-07 to 2009-10. By section 115WM (inserted by the Finance (No. 2) Act, 2009), the Chapter does not apply from assessment year 2010-11 onwards. The sections were NOT omitted — they remain on the statute book but are switched off prospectively.
Finance Act, 2026: Makes no substantive amendment to Chapter XII-H. (The Finance Act, 2026 carries only consequential cross-references to sections 115WD/115WH in a penalty provision; the FBT charge, scope and machinery are untouched.)
Part: C — Procedure for filing of return, assessment and payment.
Parallel: FBT analogue of section 144 (best-judgment assessment).
A. SECTION COMMENTARY
Section 115WF empowers the Assessing Officer to make a best-judgment assessment of fringe benefits where the employer (a) fails to file a return under 115WD(1) (and has not filed a belated or revised return), or (b) fails to comply with a notice under 115WD(2) or a direction under section 142(2A) (special audit), or (c) having filed a return, fails to comply with a scrutiny notice under 115WE(2). The assessment must be made on all relevant material gathered and after giving the assessee an opportunity of being heard via a show-cause notice — except where a notice under 115WD(2) was already issued before the assessment.
This is the FBT counterpart of section 144. The governing principles are therefore those settled under section 144: a best-judgment assessment must be a bona fide estimate based on relevant material and not arbitrary or vindictive; some honest guess-work is permitted but it cannot be capricious; and the principles of natural justice (the show-cause requirement built into the first proviso) must be observed. These principles apply to FBT through section 115WL.
No FBT-specific reported merits decision construes section 115WF; the section 144 jurisprudence governs.
B. STATUTORY POSITION (verbatim text)
Section 115WF, Income-tax Act, 1961:
115WF. If any person, being an employer— (a) fails to make the return required under sub-section (1) of section 115WD and has not made a return under sub-section (3) or a revised return under sub-section (4) of that section, or (b) fails to comply with all the terms of a notice issued under sub-section (2) of section 115WD or fails to comply with a direction issued under sub-section (2A) of section 142, or (c) having made a return, fails to comply with all the terms of a notice issued under sub-section (2) of section 115WE,
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 fringe benefits 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 as to 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 (2) of section 115WD has been issued prior to the making of an assessment under this section.
C. AUTHORITIES
Candour note: there is no FBT-specific reported decision on section 115WF. As the FBT mirror of section 144, it is governed by the settled best-judgment jurisprudence (bona fide estimate on relevant material; opportunity of hearing), imported through section 115WL.
C-1 Best-judgment principles (cognate, via s.115WL)
Counterpart of section 144 — bona fide estimate, natural justice
Principle: A best-judgment assessment must rest on relevant material and represent a fair and honest estimate; it cannot be arbitrary, capricious or punitive. The first proviso to 115WF imports the natural-justice requirement of a show-cause notice. These are the settled section 144 principles.
Source: Established section 144 jurisprudence (e.g. the classic statements in Laxminarayan Badridas v. CIT and State of Kerala v. C. Velukutty), applied to FBT through section 115WL.
Compiled for the bharattax.co Treatise on the Income-tax Act, 1961 (as amended by the Finance Act, 2026). Statutory text reproduced verbatim from the Income-tax Act, 1961 (text as printed in the Act, the Chapter remaining on the statute book but rendered inapplicable from assessment year 2010-11 onwards by section 115WM). Citations are stated as reported; rulings of the Authority for Advance Rulings and orders of the Tribunal are flagged as such. Where a section has not been judicially construed, that is stated candidly and the nearest governing authority (including the machinery provisions imported by section 115WL) is given. This material is for professional reference and is not legal advice.