Appeal RelatedInformations

Shankar BoseInspector of Income-tax

MSTU, Puri

Appeal

What is meant by the expression “ appeal”?

The expression “appeal” has been defined in Oxford Concise English Dictionary as “an application to a higher court for a reversal of the decision of a lower court”.

When the appeal can be filed ?

A person can file appeal against an order of the authority, only if the right to appeal has been statutorily provided in the statute, because an appeal is a statutory right and if the concerned law does not specifically provide for an appeal, no one can prefer an appeal.

What are the two parties to an appeal called ?

The party complaining is known as the “petitioner” or “plaintiff” or “appellant”. The other party in known as “respondent” or “defendant”.

Who are the appellate authorities in the Income-tax Department?

Only the Commissioner of income-tax (Appeals) is the appellate authority in the Income-tax Department.

STRUCTURE OF APPELLATE AUTHORITIES

Appellate authorities Relevant Sec. in the I.T. Act

1. CIT (Appeals) (First appeal) Section 246 to 251

2. ITAT (Second appeal) Section 252 to 255

3. Hon’ble High Court / NTT Section 260

4. Hon’ble Supreme Court Section 261 and 262

APPEAL BEFORE CIT(APPEALS)

Appeals before CIT(Appeals) is called first appeal against the order of the Assessing Officer and it can be filed by the assessee only.

Appellable orders [ section 246A ]

Any assessee aggrieved by any of the following orders may appeal to the CIT(Appeals) against –

a) An order against the assessee, where the ‘a’ denies his liability to be assessed under this Act,

b) Any order of asstt. u/s 143(3) or 144, where the ‘a’ objects – (i) to the income assessed, or (ii) to the amount of tax determined, or (iii) to the amount of loss computed, or (iv) to the status under which he is assessed

c) An order of asstt. u/s 115WE(3) or sec. 115WF where the ‘a’ objects the value of FB assessed,

d) An order of asstt. or re-asstt. u/s 115WGe) an order of asstt. or re-asstt. u/s 147 or 150,f) an order of asstt. Or re-asstt. u/s 153A,g) an order made u/s 154 or 155 having effect of –

(i) enhancing the income,(ii) reducing refund,(iii) order refusing to allow the claim made by the ‘a’ under either of

these sections;h) an order of the A.O. imposing penalty’i) an order of the JCIT imposing penalty,j) An order imposing penalty under Chapter XXI i.e. sec. 270 to 275

Some important points

No appeals lies under I.T. Act against the following orders :-(i) Order levying interest u/s 234A, 234B and 234C,

(ii) Revision order u/s 264. However, in this case a writ can be filed in the High court,

(iii) Order of Authority for Advance rulings,(iv) Order of Settlement Commission.

PROCEDURE FOR FILLING APPEALS [ Sec. 249 ]

Form of appeal : Form No. 35

Documents to be accompanied Form No. 35 : Appeal is required to be filed in duplicate. Statement of Facts, Grounds of appeal should be accompanied by a copy of order ppealed against and the notice of demand, if any, in original.

If the appeal is against penalty order u/s 271(1)(c), copy of asstt. order should also be furnished.

Appeal Feea) Where assessed income is Rs. 1 lakh or less : Rs. 250/-b) Where assessed income is exceeding Rs. 1 lakh

but does not exceed Rs. 2 lakhs : Rs. 500/-c) Where assessed income is exceeding Rs. 2 lakh : Rs. 1000/-d) Any matter other than specified in (a), (b) and (c) above : Rs. 250/-

TIME LIMIT FOR FILLING APPEAL[ Sec. 249(2)]

Within a period of 30days from the date of service of D/N or intimation of the order sought to be appealed against is served – excluding the day of service.

Condonation of delay in filling appeal [ Sec. 249(3)]The CIT(A) may admit an appeal filed after the expiry of the prescribed period, if he is

satisfied that the appellant had sufficient cause for not presenting it within the stipulated period. In this case the appellant has to file an application before the CIT(A) for condonation of delay in filing appeal.

Amount of tax payable before filing of appeal [ Sec. 249(4)]An appeal can not be admitted by the CIT(A) unless the tax is paid by the assessee

before or at the time of filing appeal. (a) Where return has been filed by the ‘a’, tax on returned income must be paid,(b) Where no return has been filed by the ‘a’, the assessee has to pay an amount equal to

amount of adv. Tax payable by him, i.e. tax payable on income assessed u/s 144 or 147.

However, in the case mentioned in (b), on application by the ‘a’ in this behalf, the

CIT(A) may, for any good and sufficient reason to be recorded in writing, exempt from the payment of such tax.

TIME LIMIT FOR DISPOSAL OF APPEAL [ SEC. 250(6a)]( Inserted w.e.f. 1-6-1999 )

In every appeal, the CIT(A), where it is possible, may here and decide such appeal within a period of 1 year from the end of the F.Y. in which such appeal is filed before him u/s 146A(1).

POWERS OF CIT(A) [ SEC. 251 ]

In disposing off an appeal, the CIT(A) shall have the following powers :(a) In an appeal against an order of asstt. CIT(A) may confirm, reduce, enhance or annul the

asstt., or(b) In an appeal against penalty order, he may confirm or cancel such order or vary it so as

either to enhance or to reduce penalty, or(c) In any other case – he may pass such order in the appeal as he thinks fit

The CIT(A) shall not enhance an asstt. Or penalty or reduce the amount of refund unless the appellant has had a reasonable opportunity of showing cause against such enhancement or reduction.

[ w.e.f. 1/6/2001, the CIT(A) does not have any power to set aside the asstt. For fresh asst by the A.O. ]

SOME IMPORTANT POINTS(a) The CIT(A) can suo moto deal with the issues which were not subject matter of appeal.(b) The CIT(A) has the power to allow additional grounds.(c) The CIT(A) has the power to allow additional evidence.(d) The CIT(A) has also power to grant stay of demand as the power to grant stay of

collection of tax is an inherent and incidental power of the appellate authority.[ Paulsons Litho Works v ITO (1994) 208 ITR 676(Mad)]

(A) U/s 253(1), any assessee may file an appeal before the ITAT against the following orders :-(a) An order passed by the CIT(A) :

(i) u/s 250(ii) Imposing penalty u/s 271, 271A, 271AA, 271G and 272A.(iii) u/s 154 regarding rectification of mistake in an order u/s 250 or an order

imposing penalty.(b) An order passed by the CIT :-

(i) u/s 12AA(ii) regarding revision u/s 263(iii) Imposing penalty u/s 271 or 272A.(iv) u/s 154 amending his order u/s 263 or an order imposing penalty.

(c) An Order passed by CCIT or DGIT or DIT imposing penalty

(B). U/s 253(2), the CIT may also, if he objects any order u/s 250 or 154 passed by CIT(A), direct the AO to appeal before the ITAT.

Notes :- 1. In case of CIT’s/CCIT’s orders u/s 12AA or 263 or 272A or 154, the appeal can only be filed by assessee.

2. No appeal is possible to ITAT against an order passed by CIT u/s 264 as it is a final order.

APPEAL BEFORE THE I.T.A.T.

Time limit for filing appeal [Sec. 263(3)] : Within a period of 60 days of the date on which the order sought to be appealed against is communicated to the assessee or CIT as the case may be.

Filing cross objections & Time limit [Sec. 263(4) : The A.O. or the ‘a’, as the case may be, on receipt of notice that an appeal against the order of the CIT(A) has been filed by the other party, may file a memorandum of cross objection, within 30 days of the receipt of such notice.

Condonation of delay of time limit [ Sec. 263(5)] : The ITAT may admit an appeal or permit the filling of memorandum of cross objection after the expiry of 60/30 days, if it is satisfied that there was sufficient cause for not presenting it within the specified period.

Prescribed form and documents to be accompanied [ Sec. 263(6)] : The appeal shall be filed in Form No. 36. The appeal and memorandum etc. are to be filed in triplicate and shall be accompanied by –(i) two copies (at least one copy of which should be certified copy) of order appealed

against.(ii) two copies of the order of the A.O.(iii) two copies of the grounds of appeal and statement of facts before first appellate

authority(iv) in case appeal is against an order levying penalty, two copies of relevant asstt. Order.

Signing of appeal : Form No. 36, grounds of appeal and verification should be signed by a person authorised to sign return of income u/s 140.

Fee for filing appeal : (a) Where total income assessed is Rs. 1 lakh or less : Rs. 500/-(b) Where total income assessed is more Rs. 1 lakh

but does not exceed Rs. 2 lakhs : Rs. 1,500/- (c) Where it exceeds Rs. 2 lakhs : 1% of the assessed

income subject to maximum of Rs. 10,000/-

(d) Where subject matter is any other matter than in (a), (b) and (c) above : Rs. 500/-

No fee shall be payable in case –(i) The appeal is filed by the Department

(ii) Where memorandum of cross objection is filed.

PROCEDURE FOR FILING APPEAL BEFORE ITAT

Orders of appellate Tribunal { sec. 254 ]1. After giving both parties to the appeal an opportunity of being heard, ITAT pass such

order as it deem fit u/s 254(1).2. In an appeal filed by the assessee, the ITAT, where it is possible, may decide such appeal

within a period of 4 years from the end of the F.Y. in which appeal is filed [ Sec. 254(2A)]

3. Where an order of stay is made, the appellate tribunal shall dispose off the appeal within a period of 180 days from the date of such order.

4. The ITAT shall send a copy of any order passed by it to the ‘a’ and to the CIT [ Sec. 265(3)].

5. The order passed by the ITAT shall be final unless appeal is made u/s 260A.

SOME IMPORTANT POINTS(a) On a question of fact, ITAT’s order is a final order. However, if the fact finding

have not been done properly by the Appellate Tribunal, the ‘a’ can file writ petition to the High Court challenging the fact finding process. If the HC is satisfied that the claim of the ‘a’ is correct then it will direct the ITAT to conduct the fact finding as per proper procedure.

(b) On a question of law also, the ITAT’s order should be final if no appeal is preferred to High Court.

(c) The ITAT does not have any power to review its own order.(d) Mistake apparent from record can be rectified by ITAT u/s 254(2), within a period

of 4 years from the date of order. However, if the order has the effect of increasing tax liability of the ‘a’, ‘a’ has to be given opportunity of being heard.

Procedure for filing the departmental appeal

Appeal in Form No 36 in triplicate and signed and verified by A.O Grounds of appeal and Statement of facts signed by A.O 2 copies of order appealed against [ one of which cert. copy ] 2 copies of relevant order of A.O

[ in case of penalty, two copies of Asst. Order also ] 2 copies of assessee’s grounds of appeal before CIT(A) Two copies of assessee’s SOF filed before CIT(A) An authorization certificate of the CIT directing that an appeal be preferred

before the Tribunal and also a certificate indicating the date of communication of CIT(A) order to him appealed against .

U/S 15(1): Appeal to NTT shall lie from the order of ITAT /Customs,Central Excise &

Service Tax appellate Tribunal if NTT is satisfied that the case involves a substantial question of Law .

U/s. 15(2): Appeal shall be made within 120 days of the order of ITAT received by

CIT/CCIT… NTT may entertain appeal within Sixty days even after 120 days if the

appellant was prevented by sufficient cause from preferring an appeal in time U/s. 15(3)(a) : On admission of the appeal the NTT shall formulate the question of

Law

U/s. 15(3)(b) : The NTT may determine the relevant issue which ;

has not been determined by ITAT has been wrongly determined by ITAT

FINALITY OF ORDERS OF NTTAny order by NTT shall be final and shall be given effect and no civil court shall have

or entitled to exercise any jurisdiction, power or authority w.r.t. any of the matters falling within the jurisdiction of the NTT.

APPEAL BEFORE SUPREME COURT

Any person including any department aggrieved by an decision of NTT may file an appeal to the SC within 60 days from the date of communication the decision or order of the NTT.

National Tax Tribunal Act ,2005…

• This Act has come into force with effect from 28/12/2005

• National Tax Tribunal has been established with effect from 6/1/2006

APPEAL BEFORE HON’BLE SUPREME COURT [ SEC. 261]

The ‘a’ or the CIT may prefer appeal to the SC from any judgment of the HC, if the HC certifies the case to be a fit case for appeal before the SC. However, if the HC decides not to give such certificate, the aggrieved party may make an application to the SC under Article 136 of the Constitution for Special Leave to appeal against the decision of the judgment.

For the Department, revenue effect exceeding Rs. 10 lakhs is required for filing appeal before SC.

Hearing and judgment [ Sec. 262 ]The SC upon hearing any such case shall decide the question of law raised therein and

shall deliver its judgment thereon containing the grounds on which such decision is founded.

The law declared by the SC is binding on all Courts and Tribunals in India in view of Article 141 of the Constitution.

The cost of appeal shall be in the discretion of the SC. The SC may award the cost to the successful appellant or may hold that each party should bear the cost.

The Supreme Court is the final appellate authority in India.

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