Answer By law4u team
In India, taxpayers have the right to appeal against tax assessments and orders. However, once an appeal is filed, taxpayers may sometimes wish to withdraw the appeal for various reasons. The process and eligibility for withdrawing an appeal depend on the stage at which the appeal is filed and the relevant tax authority or appellate tribunal.
Can A Tax Appeal Be Withdrawn After Filing?
Yes, a tax appeal can be withdrawn after it has been filed, but the process and implications depend on where the appeal is in the legal process.
Withdrawal Before Hearing
If the appeal has not yet been heard by the appellate authority or tribunal, the taxpayer can withdraw the appeal by filing an application for withdrawal. This is typically allowed without any major complications. The taxpayer may request the withdrawal either orally or in writing.
Withdrawal After Hearing Commences
If the hearing has already started but no decision has been made, the appeal can still be withdrawn, but the appellate authority may need to evaluate the reasons for withdrawal and ensure that the process is in accordance with legal norms. The withdrawal may also be subject to conditions.
Filing a Written Application for Withdrawal
The taxpayer must submit a formal written application to the appellate authority or tribunal to withdraw the appeal. The application must state the reasons for the withdrawal, and the tax authorities may need to approve it. If there are no objections, the appeal will be withdrawn.
Consequence of Withdrawal
Once the appeal is withdrawn, the decision or order that was being contested remains intact. No further legal action can be taken on the withdrawn appeal unless it is re-filed or an alternative legal recourse is pursued.
Withdrawal During Settlement or Settlement Mechanism
In some cases, if the dispute is being resolved through an alternative dispute resolution mechanism (such as settlement schemes), the taxpayer may request the withdrawal of the appeal if a resolution is reached. Taxpayers must ensure they comply with the terms of such settlement programs.
Legal Actions and Protections
Confirming Withdrawal with Tax Authorities
After filing the request, taxpayers should confirm with the tax authorities or the appellate tribunal that the appeal has been formally withdrawn and that no further action will be taken.
Avoiding Future Legal Complications
Withdrawal of an appeal may prevent future legal complications, but taxpayers must ensure that withdrawing an appeal is in their best interest and will not result in adverse tax consequences.
Example
Suppose a company files an appeal against a tax assessment it disagrees with. After filing the appeal, the company reaches a settlement with the tax department to resolve the issue. The company decides to withdraw the appeal. To do so, it submits a written application to the Income Tax Appellate Tribunal (ITAT) stating the reasons for the withdrawal and the settlement reached. Once the tribunal accepts the withdrawal, the appeal is dismissed, and the company avoids further litigation, accepting the settlement terms as final.
