T. V. Rajagopala Rao, President - (1.) K. Sampath filed an application seeking to permit withdrawal of the appeal now pending before this Special Bench and he prayed for the necessary permission to withdraw. The learned Departmental Representative hotly contested and argued that the assessee had no power to withdraw the appeal when once he has filed it and the same is pending before the Tribunal. He had cited the decision of the Calcutta High Court in Bhartia Steel & Engineering Co. (P) Ltd. vs. ITO & Ors. (1974) 97 ITR 154 (Cal), and canvassed for the proposition that the Tribunal had to dispose of the appeal on merits and that it had no power to allow the withdrawal of the appeal. K. Sampath disputed the proposition put forward by the learned Departmental Representative and brought to our notice the wording of s. 254(1), which is as follows : "The Tribunal may, after giving both the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit." The phrase "pass such orders thereon as it thinks fit", according to the learned authorised representative gives necessary powers to the Tribunal to permit the assessee to withdraw the appeal. He also contended that (1974) 97 ITR 154 (Cal) (supra) is a decision rendered on its own peculiar facts and its ratio should not be applied to the facts of the case at hand. He brought to our notice that the Calcutta High Court while giving the decision in (1974) 97 ITR 154 (Cal) (supra) relied upon the decision in CIT vs. Rai Bahadur Hardutroy Motilal Chamaria (1967) 66 ITR 443 (SC). However, (1967) 66 ITR 443 (SC) (supra) is a decision rendered firstly under the 1922 Act, and secondly on facts of the case the withdrawal was sought to be made when the appeal was pending before the AAC. Inasmuch as the AAC had got the power of enhancement and since the withdrawal affects the right of the Revenue to agitate for enhancement of income, the Hon'ble Supreme Court held that the withdrawal cannot be permitted. However, according to Sampath, the ratio of (1967) 66 ITR 443 (SC) (supra) was wrongly applied by the Hon'ble Calcutta High Court in (1974) 97 ITR 154 (Cal) (supra). The learned counsel for the assessee, K. Sampath, argued that the powers of the AAC are not similar to the powers of the Tribunal while disposing of the appeal. Whereas the AAC had got powers of enhancement, the Tribunal never had those powers. It had only the powers to dispose of the appeal on the points which arise out of the AAC's order and it cannot go beyond the scope of the appeal and order enhancement of assessment. Therefore, the strenuously argued that (1974) 97 ITR 154 (Cal) (supra) is not at all worthy to be followed.
(2.) K. Sampath argued that in CIT vs. Nirbheram Dalu Ram (1997) 224 ITR 610 (SC), the Supreme Court appeared to have impliedly overruled the decision in (1967) 66 ITR 443 (SC) (supra). Ultimately, Sampath strongly relied upon the Commentary by Sampath Iyengar's Law of Income-tax, 8th Edn., revised by Justice S. Ranganathan at p. 5564, which contained the following : "Unlike the appellate authority the Tribunal may permit the withdrawal of an appeal. The undernoted case, where it has been held that the Tribunal has no power to allow an assessee to withdraw an appeal, was decided on its own facts. The correct position would seem to be that in proper cases the Tribunal may allow an assessee to withdraw its appeal. This is because, unlike before the appellate authority both the Revenue and the assessee can appeal to the Tribunal and, further, the statute also provides for a memorandum of cross-objections being filed before the Tribunal." In reply, the learned Departmental Representative only relied upon the decision in (1974) 97 ITR 154 (Cal) (supra).
(3.) AFTER considering the arguments from both sides, we are inclined to accept the arguments advanced by K. Sampath. We hold that the specific words employed under s. 254(1), namely, "pass such orders thereon as it thinks fit" give inherent powers to the Tribunal to pass orders, including orders permitting the assessee to withdraw the appeal. We are of the view that the decision in (1967) 66 ITR 443 (SC) (supra) in fact does not support the ratio laid down by the Calcutta High Court in (1974) 97 ITR 154 (Cal) (supra). For our limited purpose we need not go into the larger aspects as to whether (1974) 97 ITR 154 (Cal) (supra) is correctly decided or not. Suffice to say, for the present that the facts of the case are different and the ratio of that case also is, therefore, inapplicable to the case at hand. The Commentary of Sampath Iyengar's Law of Income-tax, already quoted above, fully supports the case of the assessee. On the facts before us the Department did not file any cross-objections. Therefore, while permitting withdrawal there is no question of the rights of the Revenue being affected. Under the circumstances we feel that it is a proper case where the permission for withdrawal sought for should be granted. Hence ordered accordingly.;