Even if it was done under PD, building control would have been involved, and they'd have signed off the works, so is the council trying to hide the fact that one of their own screwed up. Your solicitor should have checked for any work done to the property, and that the paperwork was in place, so they need to prove what they have done.
The council don't want to set a precedent, but as you didn't do the work, and the property has changed hands since it was done, there is a possible argument to make an exception in this case. It might be worth asking fir a meeting with the head of the planning department, as you aren't the perpetrator in this case, more the victim, so they should be more willing to work with you than against you.
Ask the council to provide a list of their correspondence with both the neighbour and the previous owner to see if they've followed their own rules. And it might be worth going round the neighbours to see who made the complaint, but to ask them for their help in resolving it. They may be able to provide some helpful info for you.