Principle of Estoppels is Not Applicable to Income Tax Proceedings: ITAT

The Delhi bench of Income Tax Appellate Tribunal (ITAT) recently held that the principle of estoppels is not applicable to income tax proceedings.

A survey under section 133A of the Income Tax Act 1961 was carried out in the business premises of the assessee Bipin Singh Rana,. The case of the assessee was selected for compulsory scrutiny. The assessment order came to be passed and assessing the total income of assessee at Rs. 48, 21,376/- as against the returned income of Rs. 25,06,020/- against the order assesee filed an appeal before the ITAT.

Section 133A of income tax act 1961 provides the power of income tax officer to conduct survey.

Prashant Kakkar, counsel for the assessee submits that the assessing officer made the additional amount  without  giving an opportunity of being heard to the assessee.

Poonam Sharm Counsel for the revenue submits that additions were made by the assessing officer  based on the surrender/admission made by the representative of the assessee.

After considering the contentions of the both parties the division bench of ITAT comprising B. R. R. Kumar , (Accountant Member) and. yogesh kumar u.s, (Judicial Member) allowed the appeal filed by the assessee and subject to condition that the assessee shall pay a sum of Rs. 5,000/- to the Prime Minister’s National Relief Fund.

Further the bench observed that assessing officer has not decided the issues involved before him on its merit and passed the assessment order only based on the admissions/surrender made by the assessee representative he ought to have decided the matter on merit in accordance with law, not based on the admission or refusal of the assessee. Also the principle of estoppels is not applicable to income tax proceedings and the authorities should bear in mind that the right income of the assessee to be taxed in the right assessment year and well within the limitation as prescribed in the Act.

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