Appeal to CIT(A): S/s. 245C and 251: Appeal can be made only by assessee: Assessee cannot withdraw appeal: Order of CIT(A) allowing assessee to withdraw appeal is not valid

While the assessee’s appeals were pending before the CIT(A), the assessee moved the Settlement Commission for settlement of the cases. Thereafter, the assessee withdraw the appeals and the CIT(A) allowed the assessee to do so for the A. Ys. 1992-93,1993-94 and 1996-97. The Settlement Commission passed an order that by reason of the withdrawal of the appeals after the date of filing of the application, and that there was no appeal pending before the authorities, the application itself was not maintainable for the A. Ys. 1992-93,1993-94 and 1996-97. It proceeded with the settlement of the case for the A. Y. 1997-98 alone. The assessee preferred appeals before the Tribunal against the orders of the CIT(A) allowing the assessee to withdraw the appeals. The Tribunal dismissed the assessee’s appeals.

On appeal by the assessee, the Madras High Court reversed the decision of the Tribunal and held as under:

“i) Section 251 of the Income Tax Act, 1961, provides that the powers of the Commissioner (Appeals) extend not only to the subject matter of the appeal against the assessment, but, in a given case, it is open to him to even enhance the assessment. Thus, apart from confirming an assessment or granting relief to the assessee or cancelling the assessment, he has the power of an Assessing Officer to enhance the assessment which is under appeal before him. He has the jurisdiction to examine all matters covered by the assessment order and correct the assessment in respect of all such matters even to the prejudice of the assessee.

ii) An assessee having once filed an appeal cannot withdraw it. 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.

 iii) The Tribunal was not justified in its reasoning that the order passed by the first appellate authority allowing the withdrawal of appeal was justifiable on the facts as the Revenue had not objected to the same.

 iv) We have no hesitation in setting aside the order of the Tribunal and restoring the matter back to the file of the Commissioner of Income Tax (Appeals) for considering the assessment on the merits and pass orders thereon in accordance with law, after giving the assessee an opportunity. In the result, the appeals stand allowed.”