Income Tax Appeal Filing Procedure in Brief
APPEALS PROCEDURES OF INCOME TAX:
This article has been is to focus on the provision and procedures relating to Filing the Appeals. One Law Dictionary defines ‘appeal’ as a proceeding taken to rectify an erroneous decision of a court by submitting the question to a higher court, or court of appeal. Right to appeal under income tax law is a creation of statute and not an inherent right. Appeal can be filed only against orders listed in the Income
Income tax liability is determined at the level of Assessing Officer first. A tax payer aggrieved by various actions of Assessing Officer can appeal before Commissioner of Income Tax (Appeals). Further appeal can be preferred before the Income Tax Appellate Tribunal. On substantial question of law, further appeal can be filed before the High Court and even to the Supreme Court. With the ladder up approach appeal procedures are explained below:
Appeal Before Commissioner (Appeals)
Appeal Before Income Tax Appellate Tribunal
Appeal Before High Court
Appeal Before Supreme Court
APPEAL BEFORE COMMISSIONER (APPEALS):
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When appeal can be filed before Commissioner (appeals) When a tax payer is adversely affected by Orders as under passed by various Income tax authorities:
Order against tax payer where the tax payer denies liability to be assessed under Income Tax Act;
Intimation issued under Section 143(1) making adjustments to the returned income
Scrutiny assessment order u/s 143(3) or an ex-parte assessment .order u/s 144
Re-assessment order passed after reopening the assessment u/s 147/150
Search assessment order u/s 153A or 158BC
Rectification Order u/s 154/155
Order u/s 171 recording finding about partition of Hindu undivided family(HUF)
Order u/s 115VP(3) refusing approval to opt for tonnage-tax
Order determining refund u/s 237
Order u/s 201(1)/206C(6A) deeming person responsible for deduction of tax at source as assessee in default on failure to deduct/ collect tax at source
Order imposing penalty u/s 221/271 /271A/271AAA/ 271F/271FB/272A/272AA/272BB/275(1A)/158BFA(2)/271B/ 271BB/271C/271CA/271D/271E
Form of appeal Form No. 35 – Containing details of “Relief claimed in appeal” , “Statement of Facts”, “Grounds of appeal”
Signed and verified by the individual tax payer himself or by a person duly authorised by him holding valid power of attorney
Payment of accepted tax liability must before filing appeal An appeal will be admitted by Commissioner (Appeals) only if tax as per the returned income has been paid prior to filing of appeal
Appeal fees: If Total Income determined:
Less than Rs. 1,00,000/- – Rs. 250
More than Rs.1,00,000/- but less than Rs.2,00,000/ – Rs 500
More than Rs. 2,00,000/ – Rs. 1000
Time for filing appeal Within 30 days from the date of service of notice of demand relating to assessment or penalty order.
The Commissioner (Appeals) may admit an appeal after the expiration of period of 30 days, if he is satisfied that there was sufficient cause for not presenting the appeal within the period of 30 days.
Appeal procedure On receipt of Form no. 35, Commissioner of Income-tax (Appeals) fixes date and place for hearing the appeal by issuing notice to the tax payer and the Assessing Officer, against whose order appeal is preferred. The tax payer has a right to be heard either personally or through an Authorized Representative.
Filing of additional evidence During appeal proceedings, the tax payer is not entitled to produce any evidence, whether oral or documentary other than what was already produced before the Assessing Officer. Unless:
1) Where the Assessing Officer has refused to admit evidence which ought to have been admitted; or
2) Where the appellant was prevented by sufficient cause from producing the evidence which he was called upon to be produced by the Assessing Officer; or
3) Where the appellant was prevented by sufficient cause from producing before the Assessing Officer any evidence which is relevant to any ground of appeal; or
4) Where the Assessing Officer has made the order appealed against without giving sufficient opportunity to the appellant to adduce evidence relevant to any ground of appeal.
Normally, additional evidences are to be accompanied with an application stating the reasons for their admission, after which the Commissioner (Appeals) may admit the same after recording reasons in writing for its admission. Before taking into account the additional evidence filed, Commissioner (Appeals) is to provide reasonable opportunity to the Assessing Officer. For examining the additional evidence or the witness as well as to produce evidences to rebut additional evidences filed by the tax payer.
Appeal decision After the hearing is concluded, Commissioner (Appeals) passes order in writing, disposing of the appeal and stating the decision on each ground of appeal with reasons. In case of assessment and penalty, Commissioner (Appeals) may confirm, reduce or enhance it.
APPEAL BEFORE INCOME TAX APPELLATE TRIBUNAL (ITAT)
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When appeal can be filed before ITAT Tax payer can file appeal before the Income Tax Appellate Tribunal against the following orders:
1) Order by Commissioner(Appeals) u/s 250/154/271/ 271A/272A;
2) Order by Commissioner u/s 12AA on registration application by a charitable or religious trust
3) Order by Commissioner u/s 263 revising Assessing Officer’s order considered prejudicial to the interest of revenue;
4) Order by Commissioner u/s 154 to rectify an order u/s 263
5) Penalty order passed by Commissioners u/s 271 or section 272A;
6) Penalty order passed by Chief Commissioner u/s 272A;
7) Order passed by Assessing Officer u/s 143(3)/147 in pursuance of direction of Dispute;
Form of appeal Form No. 36 – To be filed in triplicate and is to be accompanied by two copies of order appealed against
Appeal fees: Total Income as computed by Assessing Officer:
Less than Rs.1 lakh – Rs. 500
More than Rs. 1 lakh but less than Rs. 2 lakh – Rs. 1,500
More than Rs. 2 lakh – 1% of assessed income, subject to maximum of Rs.10,000
Where the subject matter of appeal relates to any other matter, fee of Rs 500/- is to be paid. An application for stay of demand is to be accompanied by fee of Rs. 500
Time for filing appeal Within 60 days of the date on which order appealed against is communicated to the taxpayer or the Commissioner
Memorandum of cross objections The tax payer or the Assessing Officer on receipt of notice that an appeal has been filed before the Appellate Tribunal against order of Commissioner (Appeals) by the other party can, within 30 days of receipt of notice, file a memorandum of cross objections in Form No. 36A. Such memorandum of cross objections can be filed even if no appeal is filed by the tax payer or the Assessing Officer himself.
Appeal procedure The appellant or the respondent, as the case may be, may submit a paper book in duplicate containing documents or statements or other papers referred to in the assessment or appellate order, which it may wish to rely upon. The paper book duly indexed and page numbered is to be filed at least a day before the hearing of the appeal along-with proof of service of copy of the same on the other side at least a week before.
The Appellate Tribunal fixes the date for hearing the appeal and notifies the parties specifying date and place of hearing of the appeal. A copy of memorandum of appeal is sent to the respondent either before or along with such notice. The appeal is heard on the date fixed and on other dates to which it may be adjourned. If the appellant does not appear in person or through an authorized representative when appeal is called on for hearing, the ITAT may dispose of the appeal on merits after hearing the respondent.
Filing of additional evidence The parties to the appeal are not entitled to produce additional evidence of any kind, either oral or documentary before the Tribunal.
Appeal decision Normally appeals are heard by a Bench comprising one judicial member and one accountant member. Appeals where total income computed by the Assessing Officer does not exceed Rs. 5 lakh may be disposed of by single member Bench. The President of ITAT is empowered to constitute Special Bench consisting of three or more than three members for disposal of any particular case, one of whom would necessarily be a judicial member and one an accountant member
The Bench normally pronounces its orders in Court.
APPEAL BEFORE HIGH COURT
Appeal against Appellate Tribunal’s order lies with the High Court, Where the High Court is satisfied that the case involves a substantial question of law. Appeal to the High Court against Appellate Tribunal’s order can be filed by the tax payer or the Chief Commissioner/Commissioner within 120 days of receipt of the order and in the form of memorandum of appeal, precisely stating the substantial question of law involved. If the High Court is satisfied that a substantial question is involved, it would formulate that question. High Court hears the appeal only on the question of law so formulated; however, the respondents can argue at the time of hearing that case does not involve such question of law. Appeal filed before High Court is heard by bench of not less than two Judges and decision is by majority.
APPEAL BEFORE SUPREME COURT
Appeal against High Court’s order in respect of Appellate Tribunal’s order lies with the Supreme Court in those cases, which are certified to be fit one for appeal to the Supreme Court. Special leave can also be granted by the Supreme Court under Article 136 of the constitution of India against the order of the High Court.