TMI Blog2012 (8) TMI 278X X X X Extracts X X X X X X X X Extracts X X X X ..... is set in motion, the assessee cannot withdraw the appeal - after filing an appeal, the tax payer could not, at his option or at his discretion, withdraw an appeal to the prejudice of the Revenue - if a contingency of the nature contemplated u/s 245D(6) is to arise, then the power of the Appellate Authority under Section 251 to enhance the assessment thus available, the question of considering the withdrawal with or without objection from the Revenue does not arise - no hesitation in setting aside the order of the Tribunal and restoring the matter back to the file of the Commissioner of Income Tax (Appeals) for considering the assessment on merits and pass orders thereon in accordance with law. - Tax Case (Appeal) Nos.361 to 363 of 2006 - - - Dated:- 18-7-2012 - Chitra Venkataraman And K Ravichandra Babbu, JJ. For Appellant : Mr. Vivek Sriram For Respondent : Mr. T Ravikumar Standing Counsel for Income Tax JUDGEMENT Per : Chitra Venkataraman, J : The following are the substantial questions of law raised in these Tax Case Appeals raised by the assessee: (i) Whether the order of First Appellate Authority dated 30.3.2000 dismissing the appeal as infructuous r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... als, the appeals are hereby solemnly affirm and sincerely state as follows: dismissed as infructuous." 4. It is a matter of record that on 19.07.1999, the Settlement Commission passed an order that by reason of the withdrawal of the appeals after the date of filing of the application, the application itself was not maintainable with regard to the assessment years 1992-93, 1993-94 and 1996-97. Thus rejecting the petition for settlement for the aforementioned assessment year, the Settlement Commission proceeded with the settlement of the case relating to 1997-98 alone. 5. It is a matter of record that as against the order of the Settlement Commission, the assessee came on a writ petition before this Court. In the decision reported in [2008] 302 ITR 139 (M. Loganathan v. Government of India represented by Commissioner of Income-tax) , this Court confirmed the order of the Settlement Commission that withdrawal of the appeal meant that there was no pending appeal proceedings before the tax authorities. In the light of the fact that the condition necessary for entering the application, viz., pendency of the appeal itself was not there, the application for settlement for the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llate authority could pass an order in the appeal. When the withdrawal of the appeal was not out of undue influence and coercion, no cause of action arose for the assessee to file the appeal before the Tribunal. Aggrieved by this, the present appeals have been filed before this Court by the assessee. 8. Learned counsel appearing for the assessee placed reliance on the decision of the Apex Court reported in [1967] 66 ITR 443 (Commissioner of Income-tax v. Rai Bahadur Hardutroy Motilal Chamaria) , wherein the Apex Court held that when an assessee takes the assessment on appeal, he cannot withdraw the same. Thus, when the machinery of the Act has been activated, the assessee cannot prevent the appellate authority from settling the real income to be assessee. Thus, placing reliance on the law declared by the Apex Court as reported in [1967] 66 ITR 443 (Commissioner of Income-tax v. Rai Bahadur Hardutroy Motilal Chamaria) , learned counsel appearing for the assessee states that the Tribunal committed a serious error in holding that the withdrawal order passed by the Commissioner was sustainable. 9. Learned Standing Counsel appearing for the Revenue referred to the affidavit filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se may be, the Commissioner (Appeals) by the appellant. " 11. A reading of the above provision shows that the powers of the Commissioner extend not only to the subject matter of the appeal against the assessment, that in a given case, it is open to the Appellate Authority to even enhance the assessment. Thus, apart from confirming an assessment or granting relief to the assessee or cancelling the assessment, the first appellate authority has the power of an Assessing Officer to enhance the assessment which is under appeal before him. The Commissioner has the jurisdiction to examine all matters covered by the assessment order and correct the assessment in respect of all such matters even to the prejudice of the assessee and remand the case to the Assessing Officer to inquire into matters which were not the subject matter of appeal - vide [1958] 33 ITR 182 (Commissioner of Income-tax v. McMillan and Co.) . The only restriction on the power while enhancement is that, the assessee must be given a reasonable opportunity of showing cause as against such assessment or reducing the amount of refund. Explanation appended to Section 251 is a further addition to the power given to the Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x Court, the decision reported in [1963] 50 ITR 578 (Jagmohandas Gokaldas v. Commissioner of Wealth-tax) needs to be seen. 13. Aggrieved on the valuation of the net wealth, the assessee in the said decision filed appeals before the Appellate Assistant Commissioner of Wealth Tax, who rejected the appeals. Against this, the assessee went on appeal before the Income Tax Appellate Tribunal. The Tribunal pointed out that under Section 24 Sub Section (6) of the Wealth Tax Act, the assessee can require the Tribunal to refer the question of the disputed value to the arbitration of two valuers. The assessee was called upon to indicate its intention to avail of this benefit. The assessee wrote a letter seeking permission of the Tribunal to withdraw the appeal. The Tribunal passed an order granting permission to withdraw the appeal. Thereafterwards, the assessee preferred two revision petitions before the Commissioner of Wealth Tax under Section 25(1) of the Wealth Tax Act, seeking revision of the order passed by the Appellate Assistant Commissioner and contended that the valuation of the shares adopted by the Wealth Tax Officer was on a wrong basis. 14. The Commissioner of Wealth Tax ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n reported in [1967] 66 ITR 443 (Commissioner of Income-tax v. Rai Bahadur Hardutroy Motilal Chamaria) and pointed out that in the decision reported in [1938] 6 ITR 370 (Commissioner of Income-tax v. Nawab Shah Nawaz Khan) the assessee sought to withdraw the appeal after the appellate authority issued a notice of enhancement of assessment. On a consideration of the decision reported in [1938] 6 ITR 370 (Commissioner of Income-tax v. Nawab Shah Nawaz Khan) , the Bombay High Court viewed that the ratio deductable from the decision is that, after the filing of an appeal, the tax payer cannot, at his option or at his discretion, withdraw the appeal to the prejudice of the revenue. 16. On the facts of the case, the High Court held that the Chartered Accountant wrote a letter to the Registrar of the Tribunal, requesting him to obtain permission from the Tribunal to withdraw the appeal and on consideration of the application, the Tribunal granted the assessee the permission to withdraw the appeal. In the light of the above-said facts, the High Court held that the Commissioner of Wealth Tax was not justified in dismissing the Revision Application in limine. 17. As far as the pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. Explanation to Section 251 reads further authority into the jurisdiction of the Commissioner (Appeals) to consider and decide any matter arising out of the proceedings in which the order appealed against was passed notwithstanding the fact that such matter was not raised before the Commissioner (Appeals) by the assessee. Thus any reading of limitation on the jurisdiction of the Appellate Authority in the name of an objection or no objection is totally unwarranted, which, in essence, would only reduce the width of power of the Commissioner of Income Tax (Appeals) preserved under the said Explanation. 21. The Bombay High Court was concerned about the width of power of the Tribunal in permitting withdrawal of the appeal before the Tribunal at the instance of the appellant. In the background of the provisions as they stand and in the light of the law declared by the Apex Court, we hold that the Tribunal is not justified in its reasoning that the order passed by the First Appellate Authority allowing the withdrawal of the appeal was justifiable on facts as the Revenue had not objected to the same. 22. Section 245(2) states that when an application is proceeded with under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X
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