2014 (3) TMI 431 - HC - Income Tax

Revision power u/s 264 of the Act Withdrawal of application - Whether mere filing of a withdrawal application in an appeal per se amounts to withdrawal of appeal or waiver of right of appeal Held that - Assessee is not correct in asserting that as soon as he filed application for withdrawal of appeal, it would result in a situation where the assessee can be said to have waived his right of appeal - This presumption is thoroughly misconceived - It pre-conceives a situation that as soon as an application for withdrawal is filed, the appeal is deemed withdrawn as if the authority concerned, where appeal is pending, has no otherwise power or right in respect of pending appeal - there is no provision under the Act, 1961, which contemplates such a situation - Relying upon Rajendra Prasad Gupta Vs. Prakash Chandra Mishra and others 2011 (1) TMI 175 - SUPREME COURT OF INDIA - there is no provision which permits withdrawal of an appeal, once it is filed, and registered - 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, there is no provision in the statute permitting withdrawal. Mere filing of an application seeking withdrawal of appeal would not have resulted as if the appeal stood withdrawn or deemed withdrawn unless an order is passed by Appellate Authority thereon for the reason that appellant could have always requested Appellate Authority not to pass any order on his withdrawal application since he does not press it and he could have the proceeded with his appeal - appeal continued to remain pending even if application was filed by petitioner seeking withdrawal of appeal - On the date when revision was filed by petitioner or when CIT passed order on petitioner s revision, petitioner s appeal, as a matter of fact, was pending before Appellate Authority. Hence the Revisional Authority was barred from revising order of Assessing Authority by virtue of sub-section (4) of Section 264 of Act, 1961. CIT committed a manifest error in exercising revisional power when petitioner s appeal was pending before CIT (Appeals) - The revision order was wholly without jurisdiction - thus, it has rightly been recalled - The Appellate Authority has rightly proceeded to decide appeal in view of the fact that petitioner did not press his application for withdrawal of appeal and more so in the light of judgment of Apex Court CIT Vs. Rai Bahadur Hardutroy Motilal Chamaria 1967 (4) TMI 8 - SUPREME Court - the appeal filed could not have been withdrawn Decided against Assessee.

Summary

Issues Involved:
1. Validity of the order dated 29.08.2013 passed under Section 154 of the Income Tax Act by the Commissioner of Income Tax, Gorakhpur.
2. Whether the petitioner could withdraw the appeal filed before the CIT (Appeals).
3. Jurisdiction of the CIT to exercise revisional power under Section 264 of the Income Tax Act during the pendency of an appeal.

Issue-Wise Detailed Analysis:

1. Validity of the Order Dated 29.08.2013:
The order dated 29.08.2013 was passed under Section 154 of the Income Tax Act, 1961, holding the earlier order dated 26.03.2012, passed under Section 264, void ab initio, and accordingly canceling the same. The petitioner had filed a return of income and subsequently, an assessment was made under Section 143(3) of the Act. The petitioner filed an appeal but later sought to withdraw it and filed a revision under Section 264. The CIT, Gorakhpur, allowed the revision partly but later revoked this order citing lack of jurisdiction due to the pending appeal.

2. Withdrawal of the Appeal:
The petitioner argued that by filing an application for withdrawal of the appeal, he had waived his right of appeal, making the revision valid. However, the court noted that there is no provision in the Income Tax Act, 1961, that allows for the withdrawal of an appeal once filed. The court referenced judicial precedents, including CIT Vs. Rai Bahadur Hardutroy Motilal Chamaria, which established that an appeal once filed cannot be withdrawn. The court also discussed the procedural aspects of withdrawal under common law and the Code of Civil Procedure, concluding that mere filing of a withdrawal application does not result in the withdrawal of the appeal unless an order is passed by the appellate authority.

3. Jurisdiction of the CIT to Exercise Revisional Power:
The court examined the conditions under which a revisional authority can entertain a revision under Section 264 of the Act. Section 264(4) prevents the Commissioner from revising any order if an appeal against the order is pending. The court found that the petitioner's appeal was still pending before the CIT (Appeals) when the revision was filed. Therefore, the CIT's exercise of revisional jurisdiction was barred by Section 264(4). The court emphasized that the right of appeal is exhausted once an appeal is filed, and the question of waiver of the right of appeal does not arise thereafter. The court concluded that the revisional order dated 26.03.2012 was without jurisdiction and was rightly canceled by the order dated 29.08.2013.

Conclusion:
The court dismissed the writ petition, upholding the cancellation of the revisional order and affirming that the appellate authority rightly proceeded to decide the appeal on its merits. The interim order, if any, was vacated, and no costs were awarded.