Possibility of Withdrawal of Appeal

Subhodh Sharma

In the Income Tax law there is no mention about withdrawal of appeal. The learned author examines, whether an appeal can be withdrawn under the income tax law.

1. Position under general law

Normally in civil cases the appellant has the right to withdraw the appeal or the appellant can leave the appeal to be dismissed by non-prosecuting the same in which case the effect is that the lower court's order becomes final and the same is binding on both the parties to the litigation.

2. Position under direct tax laws

In tax cases the position is not the same. There is no specific provision in the Income Tax Act either providing for the right to withdraw the appeal once presented nor is there any prohibition. But the judicial decisions laid down by several courts say that the appellent cannot claim to withdraw the appeal as a matter of right especially when the appeal is pending before the first appellate authority. In CIT v. Nawab Shah Nawaz Khan (1938) 6 ITR 370 (Lah), it was held that it is not open to an assessee who has preferred an appeal to withdraw appeal so as to prevent the appellate authority from enhancing the assessment. The Act is a special piece of legislation and so far as it goes it is self-contained. The first appellate authority has the power to enhance the income assessable under the Act or to make a direction so as to enable the assessing officer to make a fresh assessment.