1982 (9) TMI 41 - HC - Income Tax

Summary

Issues:
1. Whether the Income-tax Appellate Tribunal was justified in holding that there was no mistake apparent on record in the order passed by the Tribunal dismissing the appeal as withdrawn?
2. Whether the withdrawal of the appeal by the assessee and subsequent application for rectification under section 154 of the Income Tax Act was valid?

Analysis:
Issue 1:
The case involved an assessee who sought continuation of registration under section 184(7) of the Income Tax Act for the assessment year 1971-72. The Income Tax Officer (ITO) refused to condone the delay in filing the declaration and assessed the firm as unregistered. The Appellate Assistant Commissioner (AAC) set aside the assessment order and remanded the case to the ITO. Subsequently, the ITO again refused to allow continuation of registration. The assessee appealed to the AAC, who dismissed the appeal. The assessee then appealed to the Appellate Tribunal and simultaneously filed a revision petition before the Commissioner of Income Tax. The appeal was later withdrawn by the assessee. The Tribunal dismissed an application for rectification under section 154. The High Court held that the Tribunal was justified in dismissing the appeal as withdrawn, as there was no error apparent on the face of the record.

Issue 2:
The assessee contended that the withdrawal of the appeal was not under section 245M, which allows withdrawal for settlement with the Settlement Commission. The withdrawal was based on the belief that the appeal was not competent due to prevailing legal views. The High Court noted that the withdrawal was not under section 245M and was essentially a statement that the appeal was not competent. As there was no provision for withdrawal other than section 245M, the Tribunal's decision to dismiss the appeal as withdrawn was upheld. The High Court emphasized that rectification under section 154 can only be done for mistakes apparent on the face of the record. Since the appeal was dismissed as withdrawn because it was not competent at the time, subsequent changes in legal views did not constitute an error for rectification. The High Court concluded that the Tribunal did not err in rejecting the application under section 154.

In conclusion, the High Court affirmed that the Tribunal was correct in holding that there was no error apparent on the face of the record in dismissing the appeal as withdrawn. The parties were directed to bear their own costs.