Procedure for appeal by revenue when an identical question of law is pending before Supreme Court [New Section 158AA] :

(i) Section 158A enables an assessee, during pendency of proceedings in his case for an assessment year, to submit a claim before the Assessing Officer or any appellate authority that –

(1) a question of law arising in the instant case for the assessment year under consideration is identical with the question of law already pending in his own case before the High Court or Supreme Court for another assessment year; and

(2) if the Assessing Officer or any appellate authority agrees to apply the final decision on the question of law in that earlier year to the present year, he will not agitate the same question of law once again for the present year before higher appellate authorities.

(ii) The Assessing Officer or any appellate authority before whom his case is pending can admit the claim of the assessee and as and when the decision on the question of law becomes final, the ratio of the decision of the High Court or Supreme Court for that earlier case would be applied to the relevant year’s case also.

(iii) So far, there was no corresponding provision for revenue to not file appeal for subsequent years where the Department is in appeal on the same question of law for an earlier year. Consequently, appeals are filed by the revenue year after year on the same question of law until it is finally decided by the Supreme Court. This increases the pending litigation.

(iv) Accordingly, new section 158AA has been inserted with effect from 1st June, 2015 to provide that notwithstanding anything contained in the Act, where any question of law arising in the case of an assessee for any assessment year is identical with a question of law arising in his case for another assessment year which is pending before the Supreme Court, in an appeal or in a special leave petition under Article 136 of the Constitution filed by the revenue, against the order of the High Court in favour of the assessee, the Commissioner or Principal Commissioner may, instead of directing the Assessing Officer to appeal to the Appellate Tribunal under section 253(2) or section 253(2A), direct the Assessing Officer to make an application to the Appellate Tribunal in the prescribed form within sixty days from the date of receipt of order of the Commissioner (Appeals) stating that an appeal on the question of law arising in the relevant case may be filed when the decision on the question of law becomes final in the earlier case.

(v) The Commissioner or Principal Commissioner shall direct the Assessing Officer to make an application under section 158AA(1), only if an acceptance is received from the assessee to the effect that the question of law in the other case is identical to that arising in the relevant case. However, in case no such acceptance is received, the Commissioner or Principal Commissioner shall proceed in accordance with the provisions contained in section 253(2) or section 253(2A). Accordingly, the Commissioner or Principal Commissioner may, if he objects to the order passed by the Commissioner (Appeals), direct the Assessing Officer to appeal to the Appellate Tribunal.

(vi) Where the order of the Commissioner (Appeals) is not in conformity with the final decision on the question of law in the other case (if the Supreme Court decides the earlier case in favour of the Department), the Commissioner or Principal Commissioner may direct the Assessing Officer to appeal to the Appellate Tribunal against such order within 60 days from the date on which the order of the Supreme Court is communicated to the Commissioner or Principal Commissioner.

(vii) Unless otherwise provided in section 158AA, all other provisions of Part B of Chapter XX “Appeals to Appellate Tribunal” shall apply accordingly.