Bona fide factual mistake can be corrected in tax appeals; departmental concession is not binding where based on error.

A bona fide factual mistake in an earlier income-tax concession can be corrected in statutory appellate proceedings, and the department is not bound by estoppel to maintain a mistaken stand. Where the Income-tax Officer's earlier report was based on a factual error and the estimate related only to the relevant accounting period, the Appellate Tribunal could permit the department to resile from that concession and restore the disallowance. The principle applied is that a concession made on a mistaken factual premise need not be allowed to stand when the error is shown in appeal.

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Issues: Whether the Tribunal was right in law in permitting the department to resile from an earlier concession made by the Income-tax Officer and restore the disallowance of Rs. 8,730.

Analysis: The earlier report of the Income-tax Officer, on which the Appellate Assistant Commissioner acted, was found to be based on a factual mistake. The same amount had not been included for both assessment years, and the estimate related only to the relevant accounting period. In such circumstances, no estoppel arose against the department, and a mistaken stand could be corrected in statutory appellate proceedings.

Conclusion: The Tribunal was justified in accepting the department's plea and in restoring the addition of Rs. 8,730. The question was answered in the affirmative, against the assessee and in favour of the department.

Ratio Decidendi: A party is not precluded by estoppel from correcting a bona fide factual mistake in statutory appellate proceedings, and a concession made on the basis of such mistake need not be allowed to stand.

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