1974 (4) TMI 6 - HC - Income Tax

I am of the view that the order of the Tribunal allowing the company to withdraw the appeal and, in consequence, dismissing the appeal for non-prosecution was without jurisdiction and, as such, invalid. The company has given sufficient explanation for not taking steps for the restoration of the appeal or for moving this court earlier. As the order of the Tribunal was without jurisdiction and invalid, it must be held that the appeal is still pending. Accordingly, I direct that a writ in the nature of certiorari issue quashing the order of the Tribunal to the writ petition. Further, I direct that a writ in the nature of mandamus issue commanding the Tribunal to dispose of the appeal on merits after giving the company an opportunity of being heard

Summary

Issues:
1. Competency of penalty proceedings under different Income-tax Acts.
2. Jurisdiction of the Appellate Tribunal to allow withdrawal of appeal.
3. Delay in filing application for restoration of appeal.

Competency of penalty proceedings under different Income-tax Acts:
The petitioner, a company assessed under the Income-tax Act, challenged a penalty imposed under the Income-tax Act, 1961, for concealing income particulars during the assessment year 1960-61. The company, relying on previous High Court decisions, withdrew its appeal before the Tribunal to maintain an Article 226 application. However, a Supreme Court judgment overruled the previous decisions, leading to the dismissal of the Article 226 application challenging the penalty order. The company later sought restoration of the appeal, which was rejected by the Tribunal. The High Court concluded that the Tribunal's order allowing withdrawal of the appeal was without jurisdiction, as the Tribunal was obligated to decide on the appeal's merits.

Jurisdiction of the Appellate Tribunal to allow withdrawal of appeal:
The company contended that the Tribunal lacked jurisdiction to allow withdrawal of the appeal, citing precedents that an assessee cannot withdraw an appeal once filed. The High Court concurred, emphasizing that the Tribunal's duty was to assess and settle the taxable amount, and it could not permit withdrawal of the appeal. The respondents argued that since the company requested withdrawal, it could not challenge the Tribunal's jurisdiction. However, the High Court held that consent cannot confer jurisdiction, and the Tribunal's order allowing withdrawal was void.

Delay in filing application for restoration of appeal:
The company faced delays in seeking restoration of the appeal due to the managing director's severe illness. The Tribunal rejected the restoration application citing inordinate delay and lack of jurisdiction to recall its order. The High Court acknowledged the delay but accepted the company's explanation, ruling that the Tribunal's order was invalid due to lack of jurisdiction. Consequently, the High Court directed the Tribunal to hear the appeal on its merits, considering the company's explanations and circumstances.

In summary, the High Court found the Tribunal's order allowing withdrawal of the appeal to be without jurisdiction, declared it invalid, and directed the Tribunal to proceed with the appeal on its merits. The delay in seeking restoration was attributed to the managing director's illness, justifying the High Court's decision to quash the Tribunal's order and mandate a proper hearing of the appeal.