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TMI Blog2012 (8) TMI 278X X X X Extracts X X X X X X X X Extracts X X X X ..... m the facts projected, the assessee made a declaration under the Voluntary Disclosure Scheme, 1997, admitting an income of Rs.86,78,275/-. The declaration was rejected on the ground that the tax was not paid within three months. However, the contents of the disclosure was considered for passing assessment on the assessee. Aggrieved by the same, the assessee went on appeal before the Commissioner of Income Tax (Appeals)-XII, Chennai. It is a matter of record that in the meantime, on 19.07.1999, the assessee moved the Settlement Commission under Section 245C of the Income Tax Act for settlement of the assessment relating to assessment years 1992-93, 1993-94, 1996-97 and 1997-98. It is an admitted fact that as on the date of filing of the petition before the Settlement Commission, the appeal before the Commissioner of Income Tax (Appeals) was very much alive for the assessment years 1992-93, 1993-94 and 1996-97. However, the Chartered Accountant representing the assessee filed a letter dated 23.3.2000 before the Commissioner of Income Tax (Appeals) which reads as follows: "Sir, Sub: Withdrawal of Appeal - req. - regarding Ref: M.Loganathan - ITA Nos.306, 307 and 324/1999 - 2000 As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f dismissal of the petition by the Settlement Commission, consequent on the withdrawal of the appeal, the assessee had no other option except to move the Income Tax Appellate Tribunal by way of an appeal. The Tribunal pointed out that the assessee as well as its representative were aware about the pending matters before the Settlement Commission and when the appellant withdrew the appeals, the Revenue had not objected to the same. The assessee had diligently, with full knowledge, authorised its counsel to withdraw the appeal. Thus holding, the Tribunal followed the decision of the Bombay High Court reported in [1963] 50 ITR 578 (Jagmohandas Gokaldas v. Commissioner of Wealth-tax) and dismissed the assessee's appeal. It observed that the assessee could withdraw the appeal with the permission of the appellate authority, if the other party does not object to the same. It pointed out that once an appeal is filed before an appellate authority, the same has to be disposed of on merits, since a duty is cast on the appellate authority to consider the case on merits in the interest of the assessee and one in larger interest to show as to whether the assessment had not been under-assessed, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing with the powers of the Commissioner of Appeals. The said Section reads as under: "251. Powers of the Appellate Assistant Commissioner or, as the case may be, the Deputy Commissioner (Appeals).--(1) In disposing of an appeal, the Deputy Commissioner (Appeals) or, as the case may be, the Commissioner (Appeals) shall have the following powers-- (a) in an appeal against an order of assessment, he may confirm, reduce, enhance or annul the assessment; or he may set aside the assessment and refer the case back to the Assessing Officer for making a fresh assessment in accordance with the directions given by the Deputy Commissioner (Appeals) or, as the case may be, the Commissioner (Appeals) and after making such further inquiry as may be necessary, and the Assessing Officer shall thereupon proceed to make such fresh assessment and determine, where necessary, the amount of tax payable on the basis of such fresh assessment; (b) in an appeal against an order imposing a penalty, he may confirm or cancel such order or vary it so as either to enhance or to reduce the penalty; (c) in any other case, he may pass such orders in the appeal as he thinks fit. (2) The Deputy Commissioner (Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s with that of the Assessing Officer to enhance the assessment too. Barring this, the Act does not contemplate a withdrawal of the appeal filed by an assessee. 12. In the decision reported in [1967] 66 ITR 443 (Commissioner of Income-tax v. Rai Bahadur Hardutroy Motilal Chamaria), the Apex Court pointed out that the right of appeal under Section 31 under the 1922 Act, to which Section 25 of the 1961 Act is in pari materia, is given to the assessee alone as against an order of assessment. When the assessee does not choose to file an appeal, as far as the assessee is concerned, the order becomes final and the Revenue has the power of revisional assessment under Section 263 or 147, as the case may be. The Apex Court observed that the Appellate Assistant Commissioner is not an ordinary Court of appeal. "It is impossible to talk of a court of appeal when only one party to the original decision is entitled to appeal and not the other party..." In view of this peculiar situation, on the width of power of the Appellate Commissioner, the Apex Court pointed out: "It is also well-established that an assessee having once filed an appeal cannot withdraw it. In other words, the Assessee having ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... matter of right, withdraw the appeal; however there was nothing illegal in so doing with the permission of the Appellate Court. The Bombay High Court pointed out that as against an order of assessment, an assessee could file an appeal before the Appellate Assistant Commissioner and an assessee could test the validity of the Assistant Appellate Commissioner's order at the hands of the appellate authority, namely, the Tribunal, or give the validity of the order of assessment or that of the Appellate Assistant Commissioner decided at the hands of the Commissioner. In the background of the provision, it held that it is difficult to say that mere filing of a competent appeal without carrying the matter to a final decision would amount to a full exercise of that right. However, it is open to the assessee to waive the right of appeal before the expiry of the period of limitation and seek a revisional remedy. The Bombay High Court held that when the legislature permits the right of an assessee to waive a right of appeal prior to the period of limitation, it can reasonably be assumed that the legislature did not intend to prohibit the assessee from waiving his right of appeal when an appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dance with law, once the machinery of the appeal jurisdiction is set in motion, there is no stopping of such machinery on any account, for the reason that once the appellate authority assumes jurisdiction, no other authority including the revisional authority, could touch the assessment. 18. The assessee herein sought for withdrawal of the appeal to go before the Settlement Commission, which dismissed the petition on the ground that there was no appeal pending a mandatory requirement as on the date of taking up a required application. Thus, on the question as to whether there could be withdrawal of the appeal by the assessee, the decision of the Apex Court reported in [1967] 66 ITR 443 (Commissioner of Income-tax v. Rai Bahadur Hardutroy Motilal Chamaria) gives the answer that once the machinery is set in motion, the assessee cannot withdraw the appeal. We do not find any justification to read into the provision under Section 251 as to the objection or no objection from the Revenue for such withdrawal. 19. Thus 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. In the light of the decision of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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