CIT(A) properly accepts appeal withdrawal for Section 264 revision proceedings under Section 250

ITAT Kolkata upheld CIT(A)'s decision to dismiss assessee's appeal after accepting withdrawal application. Assessee sought to withdraw appeal to pursue alternative remedy under Section 264 before CIT(E) regarding denial of exemption under Section 11. ITAT held CIT(A) acted within legal powers under Section 250, as Section 264(4)(b) requires pending appeal withdrawal before initiating revision proceedings. CIT(A) properly facilitated assessee's conscious choice for alternative remedy without adjudicating merits. Appeal dismissed.

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Issues Involved:
1. Dismissal of appeals by CIT(A) as withdrawn for pursuing revision petition under Section 264.
2. Validity of the assessment orders and denial of exemption under Section 11 of the Income-tax Act.
3. Adjudication of the grounds of appeal on merits by CIT(A).

Summary:

1. Dismissal of Appeals by CIT(A) as Withdrawn for Pursuing Revision Petition under Section 264:
The assessee, a trust registered under Section 12A of the Income-tax Act, filed appeals against the assessment orders for AYs 2013-14, 2014-15, and 2018-19. The CIT(A) dismissed these appeals as withdrawn based on the assessee's request to opt for revision under Section 264. The assessee argued that the CIT(A) should have adjudicated the appeals on merits despite the withdrawal request. The Tribunal noted that the CIT(A) acted within the law by allowing the withdrawal to enable the assessee to pursue the Section 264 remedy. The Tribunal upheld the CIT(A)'s decision, emphasizing that the assessee consciously chose to withdraw the appeals to seek relief under Section 264.

2. Validity of the Assessment Orders and Denial of Exemption under Section 11:
The assessee's exemption under Section 11 was denied for AYs 2013-14, 2014-15, and 2018-19, with the income assessed as taxable at the maximum marginal rate. The assessee challenged the validity of the assessment orders and the denial of exemption before the CIT(A). During the pendency of these appeals, the assessee opted for revision under Section 264, leading to the withdrawal of the appeals before the CIT(A). The Tribunal noted that the issues raised before the CIT(A) were also raised in the revision petition under Section 264, which was ultimately dismissed by the CIT(E).

3. Adjudication of the Grounds of Appeal on Merits by CIT(A):
The Tribunal referred to various judicial precedents, including the Supreme Court's judgment in CIT vs. Rai Bahadur Hardutroy Motilal Chamaria, which held that an appellate authority must adjudicate the issues on merits even if the assessee withdraws the appeal. However, the Tribunal distinguished these precedents based on the facts of the case, noting that the assessee's withdrawal was to pursue an alternative remedy under Section 264. The Tribunal concluded that the CIT(A) acted within his powers by dismissing the appeals as withdrawn to facilitate the Section 264 proceedings.

Conclusion:
The Tribunal dismissed the assessee's appeals for AYs 2013-14, 2014-15, and 2018-19, upholding the CIT(A)'s decision to dismiss the appeals as withdrawn. The Tribunal emphasized that the CIT(A) acted within the law by allowing the withdrawal to enable the assessee to pursue the revision under Section 264. The Tribunal found no infirmity in the CIT(A)'s action and upheld the dismissal of the appeals.

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