The assessee should file an appeal before the Tribunal . The assessee may succeed in appeal . Article. 265 of the Constitution of India states that “No tax shall be levied or collected except by authority of law“. The collection of tax has to be also within the frame work of law. The Circular No. 14 (XL-35), dt. 11/04/1955, also states that a duty is cast upon the Assessing Officer to assist and aid the assessee in the matter of taxation. Assessing Officers are supposed to advise the assessee and guide them and not take advantage of any error or mistake committed by the assessee or of their ignorance. The function of the Assessing officer is to administer the statute with solicitude for public exchequer with an inbuilt idea of fairness to taxpayers. Further, the Board also issued Circular No. F. 81/27/65-IT(B), dated 18-5-1965 defining the duties of the PROs in providing assistance to the public. In Nirmala L. Mehta v. A. Balasubramanian (2004) 269 ITR 1 (Bom.)(HC) (11)
“There cannot be any estoppel against the statute, Article 265 of the Constitution of India in unmistakable terms provides that no tax shall be levied or collected except by authority of law. Acquiescence cannot take away from a party the relief that he is entitled to where the tax is levied or collected without authority of law”. [Also refer, CIT v. V.MR.P. Firm, Muar (1965) 56 ITR 67 (74)]

In CIT v. Shelly Products (2003) 261 ITR 367 (SC) (382 )
“If the assessee has by mistake or inadvertence or on account of ignorance, included in his income any amount which is exempted from payment of Income-tax or is not income within the contemplation of law, he may like wise bring this to the notice of the assessing authority, which if satisfied, may grant him relief and refund the tax paid in excess if any“.