TMI Blog2005 (10) TMI 256X X X X Extracts X X X X X X X X Extracts X X X X ..... dismissal of the said appeals is contrary to the relevant provisions of the Act. 5. The Commissioner of Income-tax (Appeals) failed to appreciate that application before the Hon'ble Commission could be filed only when the proceedings for the relevant years were pending before any of the Authorities as contemplated for arriving at the taxable total income under the statute. 6. The Commissioner of Income-tax (Appeals) erred in wrongly appreciating the letter of adjournment or letter of withdrawal and ought to have appreciated that the dismissal of the appeals are totally opposed to the principles of natural justice." 3. It is seen from the records that these appeals are barred by limitation as Col. 9 in Form 36 is not filled. When it was pointed out, the assessee filed an Affidavit stating as under:- "Hence, I request that 29-11-2000 may please be taken as the date of service of the order of the CIT(A)-XII, Chennai. Since the appeals were filed on 29-1-2001, 27th and 28th of January 2001 being Saturday and Sunday respectively, it is requested that the appeals filed may be treated as being filed within time." 4. The ld. DR has not raised any objection to the effect that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to working, cannot prevent the CIT (Appeals) from ascertaining and settling the real sum to be assessed, by intimation of withdrawal of appeal. For this, the ld. counsel of assessee relied on - (i) Anjaneya Tablemould Bricks v. ITO [2000] 68 TTJ (Bang.) 583 (ii) CIT v. Rai Bahadur Hardutroy Motilal Chamaria [1967] 66 ITR 443 (SC) (iii) Dhaniram Gupta Co. v. Union of India [1973] 89 ITR 288 (Cal.) (iv) Hindustan Metal Works, Hathras v. Sales Tax Officer, Hathras [1964] 15 STC 116 (All.) (v) Commissioner of Sales Tax v. Mohanlal Harprasad [1966] 17 STC 1 (MP). 8. On the other hand, the ld. DR distinguished these case laws and argued that once there is no objection from the Revenue and the assessee wants to withdraw, the withdrawal of appeal can be permitted and once the appeal is withdrawn as not pressed or dismissed as withdrawn, no cause of action remains to the assessee to challenge before the Tribunal. In view of this, the ld. DR argued that there is no cause of action arising out of the order of the CIT (Appeals) and hence, the same has become final and that should be upheld. 9. We have heard both the sides and considered the case materials produced before us. We ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at large, the taxpayer ought to be taxed'." In this case, the Hon'ble Apex Court has analysed the situation where the other party is aggrieved. Before the Hon'ble Apex Court, the Revenue was to enhance the assessment as it was under-assessed and there was grievance on the part of the Revenue. Hence, the assessee cannot withdraw the appeal. The facts of the present case are entirely different from the facts of this case. In the present case, we have seen that the Revenue has not objected to the withdrawal. 10. Similarly, in the case of Dhaniram Gupta Co., the Hon'ble Calcutta High Court has held at page 291 as under:- "Taking into consideration all the facts and circumstances of the case, it appears that not only the petitioner had an alternative remedy but the said remedy was more adequate in the facts and circumstances because the disputed questions of fact have to be determined in this case. The petitioner has indeed taken resort to the alternative remedy and there is no explanation why now the petitioner should be permitted to abandon that alternative remedy. Taking into consideration all the facts and circumstances of this case I am of opinion that the petitioner is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal was pending. The consequence was that, with the dismissal of the appeal, the application for enhancement also came to be disposed of without even being considered. In our opinion, that application could not be dealt with in this manner. The Tribunal is empowered to enhance the tax. That power is coupled with the duty imposed on it to ascertain what the true assessment ought to be and also to enhance the assessment, if the circumstances so require or justify. This is a public duty imposed on it in the interests of the general body of taxpayers and it cannot neglect or decline to perform that duty only because the assessee, realising that if he pursues his appeal it may be the worse for him, has sought leave to withdraw it. The learned counsel for the assessee also fairly concedes that this is so." 13. In all the cases stated by the ld. counsel, the distinguishing feature from the present case is that the Revenue is aggrieved on account of enhancement of income. The Courts have not allowed the withdrawal of the appeal where the Revenue has objected. In all these cases, if we read together all the facts of the case, it emerges that the withdrawal is not permissible if any of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appeal so as to prevent the Appellate Assistant Commissioner from enhancing the assessment. It would be seen that the assessee was seeking to withdraw the appeal after the Appellate Assistant Commissioner had issued a notice to him to show cause why the assessment should not be increased on account of the escapement of income amounting to Rs. 89,797 from taxation. Facts in Rex v. Special CIT [1935] 20 Tax Cas. 381 in brief were: Notice of appeal to the Special Commissioners was given against an additional assessment to Income Tax, Schedule D, made upon a taxpayer in an estimated amount for the year 1925-26. In November, 1933, a letter was written on the taxpayer's behalf withdrawing the appeal. The Commissioners of Inland Revenue not being satisfied that the amount of the assessment was adequate, the Special Commissioners were requested on their behalf to hear and determine the appeal, and the Special Commissioners listed the appeal for hearing. The taxpayer then applied for and obtained a rule nisi calling upon the Special Commissioners to show cause why a writ of prohibition should not be awarded to prohibit them from proceeding to hear the appeal. It was held that a notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice of appeal and so brought into effect the machinery designed by section 133 for the purpose of completing the assessment, he can stop the further working of that machinery either by withdrawing the appeal or by refusing to be present at the hearing of the appeal, if that be right and he can in that way stop the working of the machinery, then, as it appears to me, he is in a position to prevent any final assessment being made upon him at all under the Act. That would be an extraordinary intention to impute to the Legislature. In my opinion that is not the effect of the Act. In my opinion the Income Tax payer has no more power, after he has served the notice of appeal and so brought into operation the machinery of procedure set up for it in Part VII of the Act, to stop the machinery of procedure than he is in the position to stop the machinery of procedure for the ascertainment of his liability to tax in any other part of the Act." It would be seen from the facts of this case that there had been an opposition on the part of the revenue to the withdrawal of the appeal on the ground that the tax levied was not adequate and the assessee was liable to pay tax higher than the one ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the Appellate Assistant Commissioner have been the subject of an appeal before the Appellate Tribunal under section 25(1) of the Act. The order is, therefore, liable to be quashed." 14. In view of these facts, case laws and the intention of the Legislature, we are of the view that the appellate authority in tax matters is a watchdog in the general public interest and specifically on behalf of public revenues. The assessee once having filed the appeal before the appellate authority, the same has to be disposed of on merits, because a duty is cast on the appellate authority to consider the case on merits in the interests of the assessee and also in the larger interest to see whether the assessee has not been under-assessed and in that event, enhancement of assessment is to be seen. The power to withdraw is always linked with the power of enhancement and in that eventuality, the withdrawal is not permissible. But it is seen that an appeal can be withdrawn with the permission of the appellate authority, if the other party does not object to the same. 15. Now we will go through the provisions of section 251(1), which reads as under:- "251(1). In disposing of an appeal, the Commi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of Income-tax (Appeals)-XII, Chennai dated 27-9-2000 by Sri M. Loganathan, I have enclosed an affidavit signed by me before Notary dated 19-9-2000, explaining as to how I did it. In the said affidavit, I have clearly stated that "I have with-drawn the appeals preferred by Sri M. Loganathan, 141, Kothukarar Thottam, Erode before Commissioner of Income-tax (Appeals)-XII, Chennai and numbered as ITA Nos. 306, 307 and 324/1999-2000 in the assessment years 1996-97, 1992-93 1993-94 during his camp at Salem on 23-3-2000 by over sight as I was not aware of the other appeals pending before Settlement Commission, Chennai". In such circumstances, I request that the appeals before Income-tax Appellate Tribunal, Chennai in the case of Sri M. Loganathan may be remitted back to the Commissioner of Income-tax (Appeals), for the appellant should not suffer on my over sight." 17. In this case, the assessee as well as his counsel was aware about the pending matter before the Settlement Commission and he knowingly withdrew the appeals and the Revenue has not objected to the same. Even now before us, the ld. DR has opposed the appeals and objected that the Revenue had no objection for withdr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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