2012 (12) TMI 697 - HC - Income Tax

Withdrawal of revision petition - rejecting of request as the petitioner had filed a Revision Petition waiving his right to file a first appeal before the CIT (A) - Held that - As decided in CIT Versus D. Lakshminarayanapathi 1998 (12) TMI 12 - MADRAS HIGH COURT filing of a Revision Petition cannot be a bar for the filing of an Appeal, by the assessee, before the appropriate authority, as per the relevant provisions of law. In such circumstances, this Court finds it appropriate to set aside the impugned order of the first respondent, dated 24.7.2012. Accordingly, the writ petition stands allowed. It is made clear that it would be open to the petitioner to file an appeal, before the CIT (A), challenging the order of the assessing officer, relating to the assessment year 2009-2010, if so advised, in the manner known to law.

Summary

Issues:
1. Request to quash the order of the first respondent rejecting the withdrawal of Revision Petition under Section 264 of the Income Tax Act, 1961.
2. Allegations of arbitrariness, contrariness to law, and violation of natural justice in the impugned order.
3. Denial of withdrawal of Revision Petition by the first respondent based on the waiver of the right to file a first appeal and findings of ineligibility for tax relief.
4. Legal precedents cited regarding the unilateral withdrawal of initiated legal processes by the assessee.
5. Legitimacy and bona fide nature of the petitioner's request to withdraw the Revision Petition for pursuing an appeal before the Commissioner of Income Tax (Appeals).
6. Interpretation of relevant provisions of law regarding the filing of a Revision Petition and subsequent appeal by the assessee.

Analysis:

The petitioner filed a writ petition seeking to quash the first respondent's order rejecting the withdrawal of the Revision Petition under Section 264 of the Income Tax Act, 1961. The petitioner argued that the impugned order was arbitrary, contrary to law, and violated principles of natural justice as it was passed after a substantial part of the inquiry had been completed, rendering the petitioner ineligible for exemption due to investment in vacant land.

In response, the first respondent filed a counter affidavit denying the petitioner's allegations. It was contended that the request for withdrawal was not granted due to the petitioner waiving the right to file a first appeal and being found ineligible for tax relief after inquiries. Legal precedents were cited to support the position that once legal proceedings are initiated, unilateral withdrawal by the assessee without the appellate authority's permission is impermissible.

The petitioner, in the rejoinder, maintained that the request to withdraw the Revision Petition was legitimate and bona fide for pursuing an appeal before the Commissioner of Income Tax (Appeals). The petitioner argued that the cited legal precedents were inapplicable to the present case and that the Revision Petition should not bar the filing of an appeal, as per relevant provisions of law.

Upon considering the submissions and legal precedents, the Court held that the filing of a Revision Petition should not prevent the assessee from filing an appeal before the appropriate authority. Consequently, the impugned order was set aside, allowing the petitioner to file an appeal before the Commissioner of Income Tax (Appeals) challenging the assessing officer's order for the relevant assessment year. The writ petition was allowed, and connected miscellaneous petitions were closed.