Income Tax Appellate Tribunal - Bangalore
Anjaneya Tablemould Bricks vs Income Tax Officer on 12 July, 2000
Equivalent citations: (2000)68TTJ(BANG)583
ORDER
I. C. Sudhir, J.M. The assessee has preferred the present appeal against the order dated 4-6-1992, of the Commissioner (Appeals)-I, Bangalore on the following grounds :
(i) The Commissioner (Appeals)-I has erroneously acted on the so-called representative's request for withdrawal of appeal. The Commissioner (Appeals) ought not have ignored the fact that the said representative did not carry any authority in writing from the appellant to seek withdrawal of the appeal.
(ii) The Commissioner (Appeals) should have given an opportunity to the appellant and or his Chartered Accountant
(iii) The Commissioner (Appeals) should have noted that not only an ad hoc, notional and perverse addition of a large sum was made but was also followed by a penalty notice for concealment and in such a grave situation no appellant would seek withdrawal of appeal.
(iv) The Commissioner (Appeal) orders may be set aside and remitted back to him for a fair and judicious approach according to law.
2. Shri Lakshminarasimhan, the learned authorised representative while reiterating the grounds raised in the appeal submits that there was no reason or circumstance before the assessee to withdraw their pending appeal before the Commissioner (Appeals). The assessee had engaged Shri B.V. Subbarayan, FCA to represent them but due to his illness during the hearing date i.e. 4-6-1992, of the appeal before the Commissioner (Appeals), his son Sri B.S. Balachandran, an Advocate was authorised and instructed to appear before the Commissioner (Appeals) and seek adjournment of the appeal from 4-6-1992, to 18-6-1992, and to facilitate this, an authority letter was issued to said Shri Balachandran, the Commissioner (Appeals), however, instead of disposing of the adjournment petition dated 29-5-1992, or a petition for stay of disputed tax demand asked Sri Balachandran, a new entrant with four years standing only to the profession, to withdraw the appeal and seek remedy before Settlement Commission lest heavy penalty would be imposed if they could not succeed in the appeal; the Commissioner (Appeals) should have disposed of the appeal on merits in case he was not agreeable to the adjournment sought in place of influencing Shri Balachandran to withdraw the appeal, 4-6-1992, was the first day after notice and assessee should not be let suffer due to lapse on the part of the counsel with limited instruction to seek adjournment only. The learned authorised representative draws our attention to the affidavit of Shri Balachandran filed in support of the aforesaid facts. He submits further that the aggrieved assessee after being served with the aforesaid withdrawal order dated 4-6-1992, on 5-8-1992, had moved a miscellaneous petition before the Commissioner (Appeals) concerned with a copy thereof to Shri B.V. Subbarayan for recalling of the withdrawal order and hearing of the appeal on its merits after its restoration, the said petition was rejected by the Commissioner (Appeals) on 28-9-1992, without any communication in this regard to the assessee.
3. Sri G.N. Bhat, the learned Departmental Representative on the other hand submits that Sri B.S. Balachandran was duly authorised by the assessee to withdraw their appeal pending before the Commissioner (Appeals)-I no adjustment petition dated 29-5-1992, was filed and the Commissioner (Appeals) accordingly had rightly dismissed the appeal as withdrawn. The learned Departmental Representative while referring the order-sheet dated 4-6-1992, submits further that in token of acknowledgment of withdrawal permission the Commissioner (Appeals) had obtained the signature of Shri Balachandran on the order-sheet dated 4-6-1991, wherein it is written as "I agree to the above noting" beneath the wordings of the order "Shri B.S. Balachandran, Advocate attended and ' sought permission to withdraw the appeal as there is no merit in the case." The learned Departmental Representative also drawn, attention of the Bench towards the copy of authority letter, dated 4-6-1992, issued by Smt. H. Varalakshmi a partner of the assessee in favour of Shri Balachandran and cites judgment of the Hon'ble Supreme Court on the principle of promissory estoppel in the case of Turner Morrison & Co. Ltd. v. Hungerford Investment Trust Ltd. (1972) 85 ITR 607 (SC) and order dated 22-11-1999, of this Bangalore Bench of Tribunal in ITA No. 716(B)/1993 (assessment year 1980-89) in opposition to the appeal.
4. In rejoinder, the learned authorised representative submits that the facts and circumstances of the cases cited by the learned Departmental Representative were entirely different from the present case, therefore, these are not applicable herein.
5. The learned authorised representative, in a query put by the Bench, replies that the assessee had not approached the Settlement Commission for the disputed demand.
6. We have considered the rival submissions, contents of the affidavit of Shri B.S. Balachandran, Advocate with other materials available on the record and have gone through the order impugned herein as well as the judgments cited. It appears from the record that being aggrieved with the order of assessment, and penalty proceedings notice, of the assessing officer, the assessee had preferred an appeal with a petition for staying the disputed tax demand before the Commissioner (Appeals) on 5-11-1990. In the order sheet dated 4-6-1992, of the 1st appeal proceedings under the signature of the Commissioner (Appeals), it is only noted as Sri B.S. Balachandran, Advocate attended and sought permission to withdraw the appeal as there is no merit in the case; with a noting under signature of Shri Balachandran as "I agree to the above noting". However in a format certified copy of the order dated 4-6-1992, which has been supplied to the assessee, the order reads as under:
"This an appeal against an order passed by the assessing officer under section 143(3) of the Income Tax Act, 1961. In response to notice issued for hearing of the appeal. Sri B.S. Balachandran, Advocate attended and sought permission to withdraw the appeal. Hence, the appeal is dismissed as withdrawn".
It appears from this order that after issuance of notice, the appeal was fixed for the first time on 4-6-1992, on which day Mr. Balachandran appeared with an authority letter dated 4-6-1992, on behalf of the assessee and sought permission to withdraw the appeal. But it does not appear to be a simple instance as the counsel appeared and sought withdrawal which was granted. As repetition of handwriting on date 4-6-1992, suggests that before writing the order-sheet regarding the seeking permission of withdrawal some conversations were going on between the presiding officer and the counsel. But it cannot be inferred with affirmity that those conversations influenced the counsel to withdraw the appeal.
7. We agree with the submissions of the learned Departmental Representative that the assessee was duly represented by an authorised counsel who sought withdrawal permission on their behalf before the Commissioner (Appeals) and put his signature in acknowledgment of it. Nevertheless the record suggests that the appeal before the Commissioner (Appeals) was filed by Sri B.V. Subbarayan, FCA father of the counsel Sri Balachandran, under whom he was working after obtaining law degree in the year 1988. We at the same time, on the basis of the record, agree with the submissions of the learned authorised representative that there was no reason with the assessee to withdraw the 1st appeal and an assessee should not be let suffer due to fault on the part of his counsel, acting beyond the instructions of his client.
8. We however, considering the totality of the entire circumstances, which are different from the cases cited by the learned Departmental Representative allow the present appeal in favour of the assessee. The order impugned herein is set aside with a direction to the 1st appellate authority to restore the 1st appeal of the assessee and consider it on its merits. We make it clear that our view expressed herein will have no bearing in any manner on the merits of the 1st appeal of the assessee to be disposed of by the Commissioner (Appeals).
9. In result, the assessee appeal is allowed.