1987 (1) TMI 39 - HC - Income Tax

Appellate Assistant Commissioner lacked jurisdiction to admit belated ground on suppressed sales; partner's statement binds assessee, appeal invalidated

Rameshchandra And Company Versus Commissioner Of Income-Tax

HC held the Appellate Assistant Commissioner lacked jurisdiction to entertain the belated ground challenging an addition for alleged suppressed sales ... Appeal To AAC - Whether, the Appellate Assistant Commissioner had jurisdiction to consider the ground of appeal against the addition relating to alleged suppressed sales of sarki ? - HELD THAT:- At no time thereafter was the Income-tax Officer approached to rectify the assessment on the ground that the partner had been under a mistaken belief of fact or otherwise. In the grounds of appeal originally filed before the Appellate Assistant Commissioner, there was not a whisper in regard to the addition of the said amount of Rs. 18,052. It would appear that the additional ground in this behalf was taken at the hearing of the appeal before the Appellate Assistant Commissioner, taking advantage of the fact that no one on behalf of the taxing authority was present to represent it. Even at that stage, the additional ground taken did not say that there was any mistaken belief of fact. All that was said was that the addition was ' improper, illegal '. Having regard to the statement made by the partner of the assessee, there was nothing either improper or illegal in the order of the Income-tax Officer in regard to the addition. While the statement stood, the assessee could not have a grievance in that behalf and was not entitled to appeal there against. Therefore, the Appellate Assistant Commissioner was manifestly in error in entertaining the appeal. Where an assessee has made a statement of facts, he can have no grievance if the taxing authority taxes him in accordance with that statement. If he can have no grievance, he can file no appeal. Therefore, it is imperative, if the assessee's case is that his statement has been wrongly recorded or that he made it under mistaken belief of fact or law, that he should make an application for rectification to the authority which passed the order based upon the statement. Until rectification is made, an appeal is not competent. In these circumstances, we are of the view that the Tribunal was right in the conclusion to which it came and we answer the question in the negative and in favour of the Revenue. Issues involved: Jurisdiction of the Appellate Assistant Commissioner to consider appeal against addition of Rs. 18,052 relating to alleged suppressed sales of sarki.Summary:Jurisdiction of Appellate Assistant Commissioner: The High Court considered a reference u/s 256(1) of the Income-tax Act, 1961, regarding the jurisdiction of the Appellate Assistant Commissioner to entertain an appeal against the addition of Rs. 18,052 for suppressed sales of sarki. The assessee, involved in trading oilseeds, initially accepted the discrepancy but later appealed the addition. The Income-tax Officer's order was based on the partner's acceptance of the discrepancy. The Appellate Assistant Commissioner deleted the addition, leading to an appeal by the Revenue to the Income-tax Appellate Tribunal. The Tribunal, following precedent, held that the Appellate Assistant Commissioner erred in entertaining the appeal and deleting the addition. The High Court upheld the Tribunal's decision, emphasizing that if a statement is voluntarily accepted, no appeal can be made against it. The Court also referenced a similar case from the Punjab and Haryana High Court, highlighting the necessity for rectification before appealing against a statement made to tax authorities. Ultimately, the Court ruled in favor of the Revenue, stating that until rectification is made, an appeal is not competent.