1967 (2) TMI 8 - HC - Income Tax

Appeal To Tribunal - Whether the Tribunal had jurisdiction to deal with the said item of Rs. 4,72,500 in the face of the AAC s statement that the ITO had conceded the point and had no objection to the exclusion of the said sum of Rs. 4,72,500 from the assessment - Held , no

Summary

Issues:
1. Competency of the Income-tax Officer's appeal against the deletion of the item of Rs. 4,72,500.
2. Jurisdiction of the Tribunal to deal with the item of Rs. 4,72,500 after the Appellate Assistant Commissioner's concession.

Detailed Analysis:
The judgment pertains to an assessment dispute for the assessment year 1948-49 involving the inclusion of Rs. 4,72,500 as part of the branch profits of the assessee. An agreement was reached between the Inspecting Assistant Commissioner of Income-tax and the assessee to delete this amount from the assessment. The Appellate Assistant Commissioner, upon the department's concession, directed the deletion of the said amount. Subsequently, the department appealed to the Income-tax Appellate Tribunal against this deletion, leading to a legal challenge regarding the competency of the appeal and the Tribunal's jurisdiction.

The Tribunal, despite initial contentions, sent the matter back to the Appellate Assistant Commissioner for further proceedings. The assessee then invoked section 66(1) of the Indian Income-tax Act to raise questions related to the preliminary contentions. The Tribunal referred two questions to the High Court, seeking clarification on the appeal's competency and the Tribunal's jurisdiction concerning the deleted amount.

The High Court unequivocally determined that the deletion of the amount was agreed upon and conceded by the department before the Appellate Assistant Commissioner. As such, the department could not be considered aggrieved by this part of the order, rendering their appeal incompetent. The Court emphasized that what is voluntarily accepted cannot form the basis of a grievance for appeal. The grounds for the department's appeal were deemed unsustainable as there was no error in accepting the concession made by the department.

The department sought to introduce additional evidence to explain the circumstances surrounding the concession made by the Income-tax Officer. However, the Court rejected this motion, stating that the alleged notes supporting the department's position were dated prior to the actual compromise agreement and were not reflected in the settlement terms documented by both parties. Consequently, the High Court answered the second question in the negative, thereby rendering the first question moot. The Court ordered the Commissioner to bear the costs of the assessee in the reference, with no costs awarded on the notice of motion.