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2025 (6) TMI 61 - AT - Income TaxApplication before PCIT u/s. 264 for revision of the assessment order passed u/s. 147 r.w.s.144 - only grievance of the assessee is that ld.CIT(A) ought to have decided the matter on merits instead of summary dismissal HELD THAT - We fail to find any merit in the grounds of appeal raised by the assessee because in case the assessee did not appear before ld.CIT(A) or details filed by the assessee are not sufficient then in such situation also CIT(A) cannot dismiss the appeal in limine for non-filing of details but he is required to deal with the merits of the case and pass a speaking order as contemplated u/s. 250(6) of the Act. But the situation in the instant case is different because assessee has itself approached before CIT(A) for withdrawal of the appeal as it wanted to avail the remedy available u/s. 264 of the Act for revision of the assessment order. Once the assessee itself has applied for withdrawal of the appeal there remains no justification for ld.CIT(A) to deal with the merits of the case. Only recourse available with the ld.CIT(A) was to accept the assessee s application for withdrawal of the appeal and give way to the assessee to file an application u/s. 264 of the Act. Ld.CIT(A) was right in dismissing the appeal accepting the request of the assessee for withdrawal of the appeal. Therefore there is no merit in the grounds of appeal raised by the assessee
1. ISSUES PRESENTED and CONSIDERED
The core legal questions considered by the Tribunal in this appeal are:
2. ISSUE-WISE DETAILED ANALYSIS Issue 1: Condonation of Delay in Filing Appeal before the Tribunal Relevant legal framework and precedents: The Tribunal has discretion to condone delay in filing appeals if sufficient cause or reasonable cause is shown, especially where delay is not deliberate or intentional, and where substantial justice demands it. Courts generally adopt a liberal approach to condonation of delay to prevent injustice. Court's interpretation and reasoning: The assessee contended that the delay arose due to reliance on advice from consultants and hope of obtaining relief under section 264 revision proceedings, which took considerable time. Since the revision order under section 264 was passed beyond the limitation period for filing the Tribunal appeal, the assessee could not file the appeal within time. The delay was thus attributed to bona fide reasons and absence of any intention to prejudice revenue interests. The Departmental Representative opposed condonation, arguing that the delay was intentional as the assessee failed in the section 264 proceedings and then chose to file the appeal belatedly, which does not constitute a reasonable cause. The Tribunal observed that the delay was due to the assessee's conscious decision to pursue revision under section 264 after withdrawing the appeal before CIT(A). The Tribunal characterized this as intentional delay because the assessee was aware of the appeal proceedings and chose to take a chance by filing the appeal after losing the revision application. Application of law to facts and treatment of competing arguments: While courts usually condone delay for reasonable cause, here the Tribunal found the delay was not due to circumstances beyond control but a deliberate strategy to prolong proceedings. The Tribunal relied on the principle that delay caused by intentional or negligent conduct is not condonable. Conclusion: The Tribunal rejected the plea for condonation of delay and dismissed the appeal as barred by limitation. Issue 2: Validity of Dismissal of Appeal by CIT(A) on Withdrawal Application Relevant legal framework and precedents: Section 250 of the Act empowers the Commissioner of Income Tax (Appeals) to dispose of appeals and requires that the CIT(A) pass a reasoned order on merits unless the appeal is withdrawn. Section 264 provides an alternate remedy for revision of assessment orders, which can only be invoked if there is no pending appeal before the CIT(A). Section 264(4)(b) mandates withdrawal of appeal before filing revision application. Precedents cited include a decision of a Coordinate Bench in a similar fact situation, where withdrawal of appeal before CIT(A) to pursue revision under section 264 was held to be a valid procedural step and the CIT(A) was justified in dismissing the appeal as withdrawn. Court's interpretation and reasoning: The Tribunal noted that the assessee itself moved for withdrawal of appeal before CIT(A) to avail the remedy under section 264. Since the assessee requested withdrawal, the CIT(A) was not obliged to decide the appeal on merits and rightly dismissed the appeal as withdrawn. The CIT(A) acted within the statutory powers under section 250 and section 264(4)(b). The Tribunal distinguished this situation from cases where appeals are dismissed in limine without opportunity or where the assessee fails to appear, emphasizing that here the withdrawal was voluntary and strategic. Key evidence and findings: The appeal before CIT(A) was withdrawn on the assessee's own application; subsequently, the revision application under section 264 was rejected. The assessee's grievance that the CIT(A) should have decided the appeal on merits was found to be untenable. Application of law to facts and treatment of competing arguments: The Tribunal applied the provisions of sections 250 and 264, and relied on judicial precedents, including a recent decision of a Coordinate Bench, to hold that the CIT(A) was correct in dismissing the appeal as withdrawn. The Tribunal rejected the contention that the dismissal violated principles of natural justice or that a reasoned order on merits was mandatory once the appeal was withdrawn at the assessee's instance. Conclusion: The Tribunal upheld the CIT(A)'s order dismissing the appeal as withdrawn and found no infirmity in the same. Issue 3: Legality and Effect of Pursuing Revision under Section 264 after Withdrawal of Appeal Relevant legal framework and precedents: Section 264 of the Act allows revision of assessment orders by the Principal Commissioner or Commissioner of Income Tax on sufficient cause. However, revision cannot be initiated if an appeal is pending before the CIT(A) in respect of the same order. Therefore, withdrawal of appeal is a prerequisite for filing revision under section 264. Judicial precedents establish that the revision remedy under section 264 is an alternate and statutory remedy and that the CIT(A) has no jurisdiction to entertain appeal once withdrawn to pursue revision. Court's interpretation and reasoning: The Tribunal observed that the assessee consciously chose to withdraw the appeal to file revision under section 264, which was rightly accepted by CIT(A). The revision application was considered on merits but rejected. The Tribunal noted that the only remedy thereafter available to the assessee was to file writ proceedings before the High Court since orders under section 264 are not appealable before the Tribunal. The Tribunal referred to a judgment of the Hon'ble Jurisdictional High Court which held that the assessee should not be left remediless and revision under section 264 is a valid remedy where appeal is not preferred. Application of law to facts and treatment of competing arguments: The Tribunal found that the assessee's attempt to revive the appeal before the Tribunal after losing revision was an attempt to prolong litigation and was not permissible. The Tribunal held that the CIT(A) acted within powers in dismissing the appeal as withdrawn and facilitating revision proceedings. Conclusion: The Tribunal confirmed the validity of the assessee's withdrawal of appeal to pursue revision under section 264 and upheld the rejection of revision application. The Tribunal further held that the appeal before it was not maintainable due to limitation and procedural bar. Issue 4: Merits of Grounds of Appeal Challenging Summary Dismissal by CIT(A) Relevant legal framework and precedents: Section 250(6) of the Act requires the CIT(A) to dispose of appeals by reasoned orders on merits. However, where the appeal is withdrawn by the assessee, the CIT(A) is bound to accept the withdrawal and cannot decide the merits. Court's interpretation and reasoning: The Tribunal found that the grounds of appeal challenging the summary dismissal without adjudication on merits were misconceived because the dismissal was on the assessee's own request for withdrawal. The CIT(A) was not required to pass a reasoned order on merits once the appeal was withdrawn. The Tribunal distinguished cases where appeals are dismissed in limine for non-appearance or non-filing of details without opportunity, which require reasoned orders, from the present case where withdrawal was voluntary. Application of law to facts and treatment of competing arguments: The Tribunal relied on established principles and judicial precedents to hold that the CIT(A) acted within statutory powers and the grounds challenging the dismissal were without merit. Conclusion: The Tribunal dismissed all grounds of appeal raised by the assessee on merits. 3. SIGNIFICANT HOLDINGS "The application made by the assessee for withdrawal of appeal before the ld. CIT(A), was a conscious effort towards getting relief by taking recourse to Section 264 of the Act and the ld. CIT(A) has just acted within the four corners of law in order to provide remedy to the assessee, for which it is eligible, u/s 264 of the Act, and he gave the assessee a way for doing the same because without doing so proceedings u/s 264 of the Act could not be initiated in terms of provision of Section 264(4)(b) of the Act." "Once the assessee itself has applied for withdrawal of the appeal, there remains no justification for ld. CIT(A) to deal with the merits of the case. Only recourse available with the ld. CIT(A) was to accept the assessee's application for withdrawal of the appeal and give way to the assessee to file an application u/s 264 of the Act." "Delay caused due to intentional or deliberate conduct of the assessee, who was well aware of the appeal proceedings, cannot be condoned." "The only remedy available to the appellant after rejection of revision application u/s 264 of the Act is to file a Writ before the Hon'ble Jurisdictional High Court because the order u/s 264 of the Act is not appealable before this Tribunal in terms of provisions of section 253 of the Act." Core principles established include:
Final determinations:
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