Income Tax Appeal: For Indian taxpayers, there is a provision for filing petitions under the Income Tax Act, 1961. An appeal can be filed by taxpayers who believe there is a deviation in the income as computed by them and the income as computed by the Assessing Officer. It can also be filed by persons responsible for not deducting or collecting the tax deducted at source (TDS), and not paying it to the government. The Income Tax Department allows for e-filing of income tax appeals, including details such as official and residential details, PAN, assessment year, and the department’s order against which the appeal is filed. The form includes sections for ‘Relief Claimed in Appeal’ where the appellant can mention required reductions, ‘Statement of Facts’ where the order and nature of business or profession must be mentioned, and ‘Grounds of an appeal’ where the reasons and legal justifications for the appeal must be summarized.
For an individual to file an income tax appeal, they must first pay the taxes they owe. The appeal must be filed within 30 days of receiving the order, but the Commissioner may admit the appeal if there was a valid reason for the delay. The appellant must submit an additional application detailing the reasons for the delay. After receiving the application, a hearing date is set, and a final order is issued based on the arguments presented.
Income tax appeal: 5 things you need to know
As a taxpayer, you have been vested with the power to file an income tax appeal should you not be satisfied with the assessment made by the Assessing officer during a particular financial year.
Once you receive the demand notice, the process of filing an income tax appeal should be set in motion. Remember that this needs to be done before the Commissioner of Income Tax (Appeals), whose designation is specified in the notice. Here are a few things to keep in mind when you file an income tax appeal:
1. Check the order you are appealing for:Make sure that the demand notice or order that you have been served falls under the various orders listed under Section 246A of the Income Tax (IT) Act. These include Section 154, 155, 144, 150, 171, 153A, 158C, 143(3), 237, 147 amongst others. You should also be filing an income tax appeal if you have been served a demand notice when you have no tax liability.
2. Duration within which to appeal:It is essential to be proactive and make an appeal for evaluation or penalty within 30 days of receiving the demand notice from the IT department. However, if you are someone who has not deducted tax at source, you need to be quicker. It is required that you appeal within 30 days of paying tax deducted at source (TDS) due from your end.
3. Process of registering your appeal:Use form 35 to submit your application for the assessment of tax. A day and venue will be scheduled by the Commissioner of Income Tax (Appeals) for the hearing, and a notice will be sent to you informing the same. You can appear in person or appoint a representative. The Commissioner has the right to make inquiries and even postpone the appeal before he/she finally asks for submission of the report by the Assessing Officer.
4. Documents to be submitted: Apart from form 35, you would require an original copy of the demand notice, a copy of your IT assessment order and challan. All of these need to be submitted to file an income tax appeal. Form 35 needs to be duly signed by the individual, making an appeal or a representative of the company, firm, association, party or authority filing an income tax appeal.
5. Charges for appealing:The fees that you need to pay for appealing depends on the total income declared by the Assessing Officer in the demand notice issued to you. A nominal fee of ₹ 250 needs to be paid if the reported income is less than or equal to ₹ 1,00,000, ₹ 500 if it lies between ₹ 1,00,000 and ₹ 2,00,000 and ₹ 1,000 for that above ₹ 2,00,000.
Appeals
Income tax liability is determined by the 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. Various appellate procedures at different levels of appellate authority are defined hereunder:
APPEALS TO COMMISSIONER (APPEALS)246A TO 249]
| Appealable orders | Please see section 246A |
| Time limit for presenting appeal | Appeals should be presented within 30 days of the following date :where the appeal relates to any tax deducted under section 195(1), the date of payment of the taxwhere the appeal relates to any assessment or penalty, the date of service of notice of demand relating to the assessment or penaltyin any other case, the date on which intimation of the order sought to be appealed against is servedThe Commissioner (Appeals) may admit belated application on sufficient cause being shown. |
| Form of appeal | Form No. 35 the CBDT had substituted the Rule 45 of Income-tax Rules, 1962 relating to filing of Form of appeal to CIT(A) vide Income-tax (3rd Amendment) Rules, 2016.By virtue of such amendment, the CBDT had issued a new Form No. 35 for filing an appeal before CIT(A). Further, e-filing of Form has been made mandatory for persons for whom e-filing of return of income is mandatory. |
| Signing of Form | The form of appeal, the grounds of appeal and the form of verification are to be signed and verified by the person authorised to sign the return of income under section 140 as applicable to the assessee. |
| Documents to be submitted | Form No. 35 (including statement of facts and grounds of appeal) – in duplicate. However, e-filing has been made mandatory for persons for whom e-filing of return of income is mandatory w.e.f 1/3/2016.One copy of order appealed againstNotice of demand in originalCopy of challans of fees. The details of the challan (i.e., BSR code, date of payment of fee, serial number and amount of fee) are required to be furnished in case of e-filing of form of appeal. |
| Court fee stamp | Court fee stamp of 50 paise is to be affixed on the first copy of Form No. 35. |
| Fee | In case of appeals to Commissioner (Appeals) (irrespective of date of initiation of assessment proceedings) the following fee is payable :Where assessed income is Rs. 1,00,000 or less – Rs. 250.Where assessed income is more than Rs. 1,00,000 but not more than Rs. 2,00,000 – Rs. 500.Where assessed income is more than Rs. 2,00,000 – Rs. 1,000.Where subject-matter of appeal is not covered under any of the above – Rs. 250. |
| Disposal of appeal | Within a period of one year from end of financial year in which appeal is filed (where it is possible). The order should be issued within 15 days of last hearing (Instruction No. 20/2003, dated 23-12-2003) |
| Faceless Appeal | The Finance Act, 2020 has authorized the Central Government to notify an eappeal scheme for disposal of appeal so as to impart greater efficiency, transparency and accountability by:a) eliminating the interface between the CIT(A) and the appellant in the course of appellate proceedings to the extent feasible technologically;a) optimising the utilisation of the resources through economies of scale and functional specialisation;a) introducing an appellate system with dynamic jurisdiction in which appeal shall be disposed of by one or more CIT (Appeals).The Central Board of Direct Taxes (CBDT) vide Notification No. 139/2021, dated 28-12-2021 has notified the Faceless Appeal Scheme, 2021. |
[As amended by Finance Act, 2023]
APPEALS TO TRIBUNAL [SECTIONS 252 TO 255] [SECTIONS 246A TO 249]
| Appealable orders | |
| – Appeal by assessee 1-10-1998 or, as the case may be, a Commissioner (Appeals) under section 154, section 250, section 271, section 271A or section 272A; or | An order passed by Deputy Commissioner (Appeals) beforeAn order passed by an Assessing Officer under clause (c) of section 158BC, in respect of search initiated under section 132 or books of account, other documents or any assets requisitioned under section 132A, after 30-6-1995, but before 1-1-1997; orAn order passed by a Principal Commissioner/Commissioner under section 12AA or under section section 271 or under 80G(5)(vi) or under section 263 or section 271 or under section 272A or an order passed by him under section 154 amending his order under section 263 or an order passed by a Principal Chief Commissioner or Principal Director General or Principal Director or Chief Commissioner or a Director General or a Director under section 272A.An order passed by AO under section 115VZC(1).An order passed by the Assessing Officer under section 143(3) or under section 147 or section 153A or section 153C in pursuance of the directions of the Dispute Resolution Panel or an order passed under section 154 in respect of such order.An order passed by an Assessing Officer under section 143(3) or section 147 or section 153A or section 153C with the approval of the Principal Commissioner/Commissioner as referred to in section 144BA(12) or an order passed under section 154 or section 155 in respect of such order (w.e.f. 1-4-2016). |
| – Appeal by Principal Commissioner/Commissioner section 144C(5) in respect of any objection filed on or after 1-7-2012 by the assessee under section 144C(2) in pursuance of which the Assessing Officer has passed an order completing the assessment/reassessment | Order passed by Deputy Commissioner (Appeals)/Commissioner (Appeals) under section 154 or 250 Direction issued by the Dispute Resolution Panel under |
| Time limit for presenting appeal | Within 60 days of the date on which order sought to be appealed against is communicated to the assessee/Principal Commissioner/Commissioner [or within sixty days of the date on which the order sought to be appealed against is passed by the Assessing Officer in pursuance of the directions of the Dispute Resolution Panel under sub-section (5) of section 144C]. |
| Form of appeal | Form No. 36. |
| Signing of Form | Where appeal is filed by assessee, form is to be signed and verified by person authorised to sign the return of income under section 140 as applicable to the assessee. |
| Documents to be submitted | Form No. 36 – in triplicate.* Order appealed against – 2 copies (including one certified copy)* Order of Assessing Officer – 2 copies* Grounds of appeal before first appellate authority – 2 copies* Statement of facts filed before first appellate authority – 2 copies* In case of appeal against penalty order – 2 copies of relevant assessment order* In case of appeal against order under section 143(3), read with section 144A – 2 copies of the directions of the Joint Commissioner under section 144A.* In case of appeal against order u/s 143, read with section 147-2 copies of original assessment order, if any.* Triplicate copy of challan for payment of fee. |
| Fee | In case of appeals to ITAT on or after 1-10-1998 (irrespective of the date of initiation of assessment proceedings), the following fees is payable :Where assessed income is up to Rs. 1,00,000 or less – Rs. 500Where assessed income is more than Rs. 1,00,000 but not more than Rs. 2,00,000 – Rs. 1,500Where assessed income is more than Rs. 2,00,000 – 1% of assessed income subject to a maximum of Rs. 10,000Where subject-matter of appeal relates to any other matter – Rs. 500Where application is for stay of demand – Rs. 500Where application is under section 254(2) – Rs. 50 |
| Paper book | Paper book containing copies of documents, statements or other papers on the file of, or referred to in, the assessment or appellate orders which is proposed to be referred to or relied upon at the time of hearing of the appeal, should be filed, in duplicate, duly indexed and paged at least a day before the date of hearing of the appeal (along with proof of service of a copy of the paper book to the other party at least a week before). |
| Cost of appeal | Cost of appeal shall be at discretion of Tribunal. |
| Time limit for filing of cross-objections | Within 30 days of receipt of notice that appeal has been filed by the other party. |
| Form for filing of cross-objections | Form No. 36A |
| Stay applications | The Appellate Tribunal may, on an application made by the assessee and after considering the merits of the application, pass an order of stay in any proceedings relating to an appeal filed under sub-section (1) of section 253, for a period not exceeding one hundred and eighty days from the date of such order and the Appellate Tribunal shall dispose of the appeal within the said period of stay specified in that order. If such appeal is not so disposed of within the period of stay specified in the order of stay, the Appellate Tribunal may, on an application made in this behalf by the assessee and on being satisfied that the delay in disposing of the said appeal is not attributable to the assessee, extend the period of stay, or pass an order of stay for a further period or periods as it thinks fit; but the aggregate of the period originally allowed and the period or periods so extended or allowed shall not, in any case, exceed three hundred and sixty-five days and the Appellate Tribunal shall dispose of the said appeal within the period of stay so extended or allowed.If such appeal is not so disposed of within the period allowed or within the period or periods extended, which shall not, in any case, exceed three hundred and sixty-five days, the order of stay shall stand vacated after the expiry of such period or periods, even if the delay in disposing of the appeal is not attributable to the assessee. |
| Disposal of appeal/rectification application | Within four years from end of financial year in which appeal/rectification application is filed by the assessee/revenue (where it is possible). |
| Faceless proceedings | The Finance Act, 2021 has amended section 255 to make an appeal to the Income Tax Appellate Tribunal faceless. A scheme would be brought by the Govt. wherein all communication between the Tribunal and the appellant shall be electronic. |
[As amended by Finance Act, 2023]
APPEAL TO HIGH COURT [SECTION 260A]
| Who can file appeal | Assessee or Principal Chief Commissioner/Principal Commissioner/Chief Commissioner/Commissioner. |
| Order against which appeal to High Court is possible | Any order passed in appeal by the Appellate Tribunal (before the date of establishment of National Tax Tribunal), if the High Court is satisfied that the case involves a substantial question of law. |
| Fee | As specified in relevant law relating to Court fees for filing appeal to High Court |
| Time limit for filing appeal | 120 days from the date on which order of Tribunal is received by the assessee or the Principal Chief Commissioner/Principal Commissioner/Chief Commissioner or Commissioner. High Court may admit appeal after 120 days if it is satisfied that there was sufficient cause for delay. |
| Other important issues | The appeal shall be in form of a memorandum of appeal, precisely stating the substantial question of law involved in the appeal.Where the High Court is satisfied that a substantial question of law is involved, it should formulate the question.Where the High Court delivers a judgment, effect shall be given to order passed by AO on basis of certified copy of judgment.The appeal to be heard only on the question to be formulated (however, the Court has the power to hear, for reasons to be recorded, the appeal on any other substantial question of law not formulated by it, if it is satisfied that the case involves such question).High Court can award such costs as it deems fit.The High Court may determine any issue which—has not been determined by the Appellate Tribunal; orhas been wrongly determined by the Appellate Tribunal, by reason of a decision on such question of law as is referred to in sub-section (1).The appeal is to be heard by a Bench of not less than 2 judges of the High Court. Decision will be in accordance with opinion of majority of judges.Where judges are equally divided in their opinions, the case on the point on which they differ shall be heard by one or more other judges of the High Court. |
[As amended by Finance Act, 2023]
An appeal shall lie to the Supreme Court from any judgment of the High Court delivered before the establishment of the National Tax Tribunal] on a reference made under section 256 against an order made under section 254 before the 1st day of October, 1998 or an appeal made to High Court in respect of an order passed under section 254 on or after that date in any case which the High Court certifies to be a fit one for appeal to the Supreme Court.
Hearing before the Supreme Court
• The provisions of the Code of Civil Procedure, 1908 (5 of 1908), relating to appeals to the Supreme Court shall, so far as may be, apply in the case of appeals under section 261 as they apply in the case of appeals from decrees of a High Court :
Provided that nothing in this section shall be deemed to affect the provisions of sub-section (1) of section 260 or section 265.
• The costs of the appeal shall be in the discretion of the Supreme Court.
• Where the judgment of the High Court is varied or reversed in the appeal, effect shall be given to the order of the Supreme Court in the manner provided in section 260 in the case of a judgment of the High Court.
Other relevant provisions:
| Other Relevant Provisions | |
| Section – 158A | Procedure when assessee claims identical question of law is pending before High Court or Supreme Court. |
| Section – 257 | Statement of case to Supreme Court in certain cases. |
| Section – 260 | Decision of High Court or Supreme Court on the case stated. |
| Section – 261 | Appeal to Supreme Court. |
| Section – 262 | Hearing before Supreme Court. |
| Section – 266 | Execution for costs awarded by Supreme Court. |
| Section – 265 | Tax to be paid notwithstanding reference, etc. |
[As amended by Finance Act, 2023]