Case Law Details
The petitioner filed return of income in ITR4 on 07.09.2009 declaring a total income of Rs. 81,000/. His case was selected under scrutiny and thereafter assessment under Section 143(3) of Act, 1961 was made on a total income of Rs. 2,02,73,180/ vide order dated 26.12.2011. The petitioner filed appeal under Section 246 of Act, 1961 before CIT (Appeals), on 10.01.2012 (sent through courier on 07.01.2012). On 24.02.2012 he sent an application by post seeking withdrawal of his appeal against assessment order dated 26. 12.2011. This application is said to have been received in the office of CIT (Appeals) on 27.02.20 12. Thereafter on 28.02.20 12 petitioner preferred revision under Section 264 of Act, 1961 stating that he has already waived his right of appeal and thus challenging assessment order dated 26.12.2011, in revision. In the memo of revision submitted by petitioner, he specifically said in para 4 that he filed appeal before CIT (Appeals) “which has been withdrawn”. The Revisional Authority, i.e., CIT, Gorakhpur allowed revision partly vide order dated 26.03.20 12 by deleting addition of Rs. 2,01,71,883/ made under Section 40A(3) of Act, 1961 but maintained rest of assessment order.
Petitioner’s appeal, however, remain pending before CIT (Appeals). It appears that notice for hearing was issued thereon on 18.12.2012, fixing a date for hearing on which petitioner did not appear, but sought adjournment by a letter, sent by post. CIT (Appeals) declined to adjourn the matter and proceeded on appeal. He considered petitioner’s withdrawal application and relying on Calcutta High Court’s decision in Bhartia Steel & Engineering Co. (P) Ltd. Vs. IncomeTax Officer, 1974(97) ITR 154 (Cal.) and Apex Court’s decisions in CIT Vs. Rai Bahadur Hardutroy Motilal Chamaria, 1967(66) ITR 443 (SC) and CIT Vs. B.N. Bhattachargee, 1979(1 18) ITR 461 (SC) wherein it is said that appeal once filed cannot be withdrawn, rejected withdrawal application. Then CIT (Appeals) proceeded on merits of appeal and negativing various grounds taken by appellants, dismissed the same and confirmed assessment order dated 26. 12.2011 passed by Income Tax Officer, Ward1(1), Gorakhpur. Subsequent thereto, CIT, Gorakhpur also passed order dated 29.08.2013, impugned in this appeal, cancelling/revoking his own earlier revisional order dated 26.03.20 12.
Decision by High Court-
There is no provision in the Income Tax Act, 1961 which permits withdrawal of an appeal, once it is filed, and registered. In other words, once right of appeal is exhausted, by party concerned, and the appeal is filed before appropriate Appellate Authority, who after receiving same has registered it, I find no provision in the statute permitting withdrawal thereof. It is perhaps in this context of the matter that a three Judge Bench of Apex Court in CIT Vs. Rai Bahadur Hardutroy Motilal Chamaria (supra) said:
“It is also well established that an assessee having once filed an appeal cannot withdraw it. In other words, the assessee having filed an appeal and brought the machinery of the Act into working cannot prevent the Appellate Assistant Commissioner from ascertaining and settling the real sum to be assessed, by intimation of his withdrawal of the appeal.”
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Sorry !The purport or import of the counter-comment, – presumably from a more knowledgeable person,-is not readily understood. On the contrary,on a quick re-look at the expert commentary in the leading text book of Palkhivala, so also a glimpse of the case law cited therein, on the topic of ‘first appellate authority’s powers to enhance an assessment’, have drawn a blank. If there is any decided court case in support of the advanced propostion ,suggest that should desirably be shared for enlightenment of the rest.
But the power of enhancement of an assessment only to the issue considerable during proceedings and the AO has partly considered it and partly not.
A points of grave poser, for useful thoughts:
Going by one’s memory, reason behind the view/ accepted original proposition that appeal once filed cannot be withdrawn is that it is within the powers of first appellate authority also to ‘enhance’ an assessment, if so warranted on the basis of material on record.As such,why is it a proposition of uniform application to all appeals; say,to tribunal or court? Is it not a better view that, any such right to appeal as conferred by law has to be rightly regarded to have imbedded in it, a right to withdraw as well; of course,on the principles of common / natural law?
If not, how then any proposal to compromise / amicably settle any dispute- such as, lately, in Vodafone’s highly debated case of its own kind- is taken for granted to be feasible?