1981 PLP (Trib (PTD)

Muhammad Shafi Alim, Accountant for Respondent. MUHAMMAD MAZHAR ALI (MEMBER).‑These two departmental appeals relating to charge years 1973‑74 and 1974‑75, have been brought against the combined order of the learned Appellate Assistant Commissioner, H . . . . . Range, 'on the following main common ground:‑ "The assessee has made declaration under section 3‑C read with Fifth Schedule of Income‑tax Act up to the Assessment year 1975‑76, under the provisions and rules framed by the Central Board of Revenue as empowered vide para. 7 of V Schedule of Income‑tax Act the assessee should have withdrawn the appeal. Therefore, question of giving relief in trading account and profit and loss account does not arise."

2. We have heard the argument of Mr. S. M. Sibtain, the learned Departmental Representative. He submitted that the assessee had made a declaration under section 3‑C read with Fifth Schedule of the Income‑tax Act. At the time of declaration his appeal was pending before the learned Appellate Assistant Commissioner. He was, therefore, obliged to withdraw the appeal in terms of para. 20 of the Central Board of Revenue's Circular No. 63(221) IT‑IV/76 dated 14‑7‑1976. The income of the assessee which had already been assessed to tax under section 23 of the Act could not, in his submission, form part of the "undisclosed income" The learned Depart mental Representative, therefore strenuously argued that the appellant's appeals before the Appellate Assistant Commissioner in respect of the two years in question had in fact become infructuous consequent to the filing of the declaration of undisclosed income. The assessee's Accountant, on the other hand, pleaded that since the appeals before the Appellate Assistant Commissioner involved a question of law, the Assessee was not legally obliged to withdraw it. He stated that the assessing Officer had failed to allow the usual percentage of wastage to the Assessee and, as such, it to have got the dispute settled by the appellate authority. According to him it was a legal issue. Having heard the arguments of the parties' Representatives and upon perusal of the relevant Circular relied upon the Departmental Representatives. We are firmly of the view that the appeals, which were ending before the Appellate Assistant Commissioner did not become infructuous upon the filing of the declaration of undisclosed income. No doubt para. 20 of the said Circular lays down that "where an assessee's appeal to the Appellate Assistant Commissioner or Income‑tax Appellate Tribunal in respect of any year to which the declaration relates is pending at the time of declaration he shall withdraw the appeals in so far as it relates to question of facts including estimates of income and attach to the declaration a copy of the letter to the appellate authority. However, an appeal, on a question of law may not be withdrawn." It clearly places an obligation on the assessee to withdraw his appeal but this provision cannot also facts render the appellate proceedings void in law, if not withdrawn by the assessee. What consequences were to follow if the assessee did not comply with this requirement is not our concern. But we do not entertain any doubt that the non‑compliance of this requirement could riot in law lead to the dismissal of the appeal on this score. The right to file and pursue an appeal is a substantive right and it could not in any manner be adversely effected save by specific legal provision enacted by the competent Legislature. There was no change or amendment brought about in the relevant provisions of law so as to hit the right of an assessee to file an appeal in a case where he had filed some declaration of undisclosed income, or to debar himself obtaining a final decision on an appeal already filed by him. It is quite possible that the assessee might have rendered himself liable to some legal action for having filed an incorrect declaration of undisclosed income, but it did not in the least, in our view, render the appeals filed by it void in law. The moot question in this case, therefore, is whether the Appellate Assistant Commissioner was competent to decide this appeal or was he legally bound to dismiss it as having become infructuous or void? On this issue, we entertain no doubt that the learned Appellate Assistant Commissioner was under no legal obligation to drop the appeal proceedings or dismiss the appeal as being barred by law, or as having become void in law consequent in the assessee's filing a declaration under section 3‑C of the Income‑tax Act. It was for the Legislature, if it so desired, to amend the relevant provisions of law. But in the absence of any such amendment being made, we do not feel hesitant to hold that the order of the learned Appellate Assistant Commissioner is well within his jurisdiction and that the assessee's right to pursue the appeal, which was pending before the Appellate Assistant Commissioner at the time of making the declaration, did not cease to exist or become cloudy by virtue of para. 20 of the aforesaid Circular. The instructions or order issued by the Central Board of Revenue are binding on all Officers and persons employed in the execution of Income‑tax Act by virtue of the provisions of section 5(8) of the Act but these instructions cannot be extended to or understood in such a manner as to deprive an assessee of his right to file an appeal or pursue a pending appeal. As already stated this being a substantive right could only be curtailed or taken away by a valid piece of legislation. The ground taken in the memorandum of appeal and urged before us, is therefore, not sustainable at law. It is accordingly repelled:

4. For the foregoing reasons, we hold that there is no substance in these appeals and they are accordingly dismissed. Appeals dismissed.