Court dismisses writ petition challenging cancellation of revisional order under Income Tax Act, upholding right of appeal. Commissioner lacked jurisdiction.

The court dismissed the writ petition, upholding the cancellation of the revisional order under Section 264 of the Income Tax Act. It affirmed that the appellate authority rightly proceeded to decide the appeal on its merits, emphasizing that once an appeal is filed, the right of appeal cannot be waived. The court found that the Commissioner lacked jurisdiction to exercise revisional power while an appeal was pending, leading to the cancellation of the revisional order. Any interim order was vacated, and no costs were awarded.

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Issues Involved:
1. Validity of the order dated 29.08.2013 passed under Section 154 of the Income Tax Act by the Commissioner of Income Tax, Gorakhpur.
2. Whether the petitioner could withdraw the appeal filed before the CIT (Appeals).
3. Jurisdiction of the CIT to exercise revisional power under Section 264 of the Income Tax Act during the pendency of an appeal.

Issue-Wise Detailed Analysis:

1. Validity of the Order Dated 29.08.2013:
The order dated 29.08.2013 was passed under Section 154 of the Income Tax Act, 1961, holding the earlier order dated 26.03.2012, passed under Section 264, void ab initio, and accordingly canceling the same. The petitioner had filed a return of income and subsequently, an assessment was made under Section 143(3) of the Act. The petitioner filed an appeal but later sought to withdraw it and filed a revision under Section 264. The CIT, Gorakhpur, allowed the revision partly but later revoked this order citing lack of jurisdiction due to the pending appeal.

2. Withdrawal of the Appeal:
The petitioner argued that by filing an application for withdrawal of the appeal, he had waived his right of appeal, making the revision valid. However, the court noted that there is no provision in the Income Tax Act, 1961, that allows for the withdrawal of an appeal once filed. The court referenced judicial precedents, including CIT Vs. Rai Bahadur Hardutroy Motilal Chamaria, which established that an appeal once filed cannot be withdrawn. The court also discussed the procedural aspects of withdrawal under common law and the Code of Civil Procedure, concluding that mere filing of a withdrawal application does not result in the withdrawal of the appeal unless an order is passed by the appellate authority.

3. Jurisdiction of the CIT to Exercise Revisional Power:
The court examined the conditions under which a revisional authority can entertain a revision under Section 264 of the Act. Section 264(4) prevents the Commissioner from revising any order if an appeal against the order is pending. The court found that the petitioner's appeal was still pending before the CIT (Appeals) when the revision was filed. Therefore, the CIT's exercise of revisional jurisdiction was barred by Section 264(4). The court emphasized that the right of appeal is exhausted once an appeal is filed, and the question of waiver of the right of appeal does not arise thereafter. The court concluded that the revisional order dated 26.03.2012 was without jurisdiction and was rightly canceled by the order dated 29.08.2013.

Conclusion:
The court dismissed the writ petition, upholding the cancellation of the revisional order and affirming that the appellate authority rightly proceeded to decide the appeal on its merits. The interim order, if any, was vacated, and no costs were awarded.

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