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P. Sankara Reddiar Vs. Commissioner of Income-tax - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtKerala High Court
Decided On
Case NumberIncome-tax Reference No. 44 of 1971
Judge
Reported in[1974]94ITR120(Ker)
ActsIncome Tax Act, 1961 - Sections 260(1)
AppellantP. Sankara Reddiar
RespondentCommissioner of Income-tax
Appellant Advocate K.S. Rajamani, Adv.
Respondent Advocate P.A. Francis, Adv.
Excerpt:
- - an appeal was, therefore, taken before the tribunal and the mistake was pointed out and the tribunal was satisfied that the report which was the basis of the appellate assistant commissioner's decision was against facts. we are not satisfied that there has been any error committed by the income-tax appellate tribunal in accepting the plea of the department that the sum of rs......the estimate made related to the turnover not only for the pertinent accounting period for the year of assessment 1960-61, but also the turnover of the earlier year. a report was called for from the income-tax officer and he reported that the assessee's contention was correct. on the basis of this report, the appellate assistant commissioner allowed a reduction of rs. 8,730 from the income fixed by the income-tax officer. later, the department found that the report of the income-tax officer was against facts. an appeal was, therefore, taken before the tribunal and the mistake was pointed out and the tribunal was satisfied that the report which was the basis of the appellate assistant commissioner's decision was against facts. the sum of rs. 8,730 had not been included for both the.....
Judgment:

Govindan Nair, J.

1. The question referred is :

' Whether the Income-tax Appellate Tribunal was right in law in permitting the Income-tax Officer to dispute the reduction of Rs. 8,730, given by the Appellate Assistant Commissioner, on the basis of a report submitted by him, conceding the claim of the assessee '

Rs. 8,730 is the income said to have been made by the assessee during the accounting period relating to the assessment year 1959-60, on the basisof a contract for the supply of paper which he entered into with the State Government. The profit and loss statement prepared by the assessee for that year showed this income and the assessee had been assessed on that income for the year 1959-60. When he filed a return for the assessment year 1960-61, though his accounts had been drawn up showing the entire transactions, even those relating to the accounting year pertaining to the assessment year 1959-60 and therefore included the income of Rs. 8,730 in his return, for the year 1960-61 he actually omitted the sum of Rs. 8,730. The assessment was made for the year 1960-61 by the Income-tax Officer on the basis of an estimate. The assessee appealed to the Appellate Assistant Commissioner and contended that the estimate made related to the turnover not only for the pertinent accounting period for the year of assessment 1960-61, but also the turnover of the earlier year. A report was called for from the Income-tax Officer and he reported that the assessee's contention was correct. On the basis of this report, the Appellate Assistant Commissioner allowed a reduction of Rs. 8,730 from the income fixed by the Income-tax Officer. Later, the department found that the report of the Income-tax Officer was against facts. An appeal was, therefore, taken before the Tribunal and the mistake was pointed out and the Tribunal was satisfied that the report which was the basis of the Appellate Assistant Commissioner's decision was against facts. The sum of Rs. 8,730 had not been included for both the years 1959-60 and 1960-61. The estimate also related only to the turnover for the accounting period relating to the assessment year 1960-61. Accordingly, the Tribunal reversed the decision of the Appellate Assistant Commissioner and omitted the deduction of Rs. 8,730.

2. The question referred to us, it is said, is based on the supposed principle that the department ought not to have been permitted to go back on what it once said. We do not think that there is any such principle. If a bona fide mistake had been committed it is open to the department to rectify that mistake. It canuot be said that there was any estoppel in regard to this matter. The point was taken in an appeal statutorily provided. Even a pleading can be allowed to be amended in proceedings before a court and a stand contradictory to that which had been taken earlier can be permitted to be taken. This is so especially in cases where the original stand was on the basis of a bona fide mistake. We are not satisfied that there has been any error committed by the Income-tax Appellate Tribunal in accepting the plea of the department that the sum of Rs. 8,730 has been wrongly allowed to be deducted because the earlier report was based on a mistake. We answer the question referred to us in the affirmative, that is, against the assessee and in favour of the department. We direct the parties to bear their respective costs.

3. A copy of this judgment under the seal of the High Court and the signature of the Registrar will be sent to the Appellate Tribunal as required by Sub-section (1) of Section 260 of the Income-tax Act, 1961.


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