Appeals and Revision under Income Tax Act, 1961 - Section 246 to 269

Contents -

1. Introduction of Appeals and Revision.

2. Appeal to the Commissioner (Appeals).

3. Conditions for filling the appeal by the assessee.

4. Requirements for filing the appeal to Appellate Tribunal.

5. Appeal to National Tax Tribunal.

6. Appeal to the High Court : Section 260A.

7. Appeal to Supreme Court.

Question : State the Provisions relating to "Appeals and Revision" under the Income Tax Act, 1961.

Introduction -

An appeal for kids maintainability must have the clear authority of law. It should not be criticized that the right of appeal is not merely a matter of procedure but it is a substantive right. The Institution of a suit carries with it the implication that all successive appeal available under the law then in force would be preserved to the parties to the suit till the final disposal by the highest forum.

To hear the appeal, there is jurisdiction and time limit as well as the court fee as it is applicable by law. In this topic we will discuss the appeal and revision under section 246 to 269.

The right of appeal must be given by express enactment and cannot be implied. It should not be assumed that, if there is injustice to the assessee or to the Government Department, may file an appeal to the Higher Authority, may be High Court or Supreme Court.

• Jurisdiction and Appellate Hierarchy -

1. The Appeal against the order of the Assessing Officer lies with the Commissioner (Appeals). (Section 246A to 251)

2. The Appeal against the order of the Commissioner (Appeals) can be preferred by the assessee of the Income Tax Department and such appeal lies with the Appellate Tribunal which is the final fact finding athority. (Section 252 to 255)

3. Appeal against the Appellate Tribunal can be preferred by the assessee or the Income Tax Department and such appeal lies to the High Court on a substantial question of law. (Section 268 and 260B)

4. Appeal to National Tax Tribunal Appeal against the order of the Appellate Tribunal where the question of law is raised.

5. The Appeal can be preferred against the order of the High Court either by the assessee or by the Income Tax Department to the Supreme Court which is the final appellate authority. (Section 261 and Section 262)

•  Appeal to the Commissioner (Appeals) -

Any person not satisfied or arrived with any of the following orders of the Assessing Officer, any file an appeal to the Commissioner (Appeals) having jurisdiction to entertain the appeal.

A) An order of assessment under section 115WE(3) or 115WF, where the assessee being an employer objects to fringe benefits assessed.

B) An order under section 115VP(3) (ii) or, assessment order against the assessee, where the assessee denies his liability to be assessed under the act.

C) An intimation under section 143(1) or 143(B), where the assessee objects to the making of adjustments.

D) An order to assessment or reassessment under section 115WG.

E) An assessment order under section 143(3) or a best judgement assessment order under section 144, where the assessee object to the amount of income assessed or the loss computed or to the status under which he is assessed.

F) An order of assessment, reassessment under section 153A.

G) A rectification order under section 154 or 155.

H) An order of assessment, reassessment or re-computation under section 147 or 150.

I) An order of penalty under section 158BFA.

J) An order of assessment of undisclosed income under section 158BC in case of search of requisition initiated on or after 1st January, 1997.

K) An order under section 163 treating the assessee as agent of a non resident.

L) An order of assessment after partition of an HUF under section 171.

M) An order under section 170(2) or 170(3). (Succession to business otherwise than on death)

N) An order made under section 201. (failure to collect or pay TCS)

O) An order for refund under section 237.

P) An order imposing or enhancing penalty under section 275(1A). (i.e. in effect of an appellate or revision order)

Q) A person claiming as not liable to deduct TDS on any income other than interest, under section 195, where under an agreement/arrangement TDS is to be borne by the payer.

R) Any other penalty order.

S) A penalty order under section 271C (failure to deduct tax at source), under section 271CA (failure to collect tax at source), under section 27D (Contravention of section 269SS), under section 271E (Contravention of section 269T)

T) A penalty order under section 221 (default it payment of tax), under section 271 (failure to comply with notice or concealment of income), under section 271A (failure to keep maintain or retain books of account etc.), under section 271AAA (initiation of search), under section 271B (failure to get accounts audited u/s 44AB), under section 271F (failure to file return), u/s 271FB (failure to file fringe benefit tax return), under Section 272A (failure to answer questions, sign statements, furnish information, return of statements etc.), under Section 272AA (failure to comply with a search u/s 133B)

• Conditions for filling the appeal by the assessee :

1. The fee to be paid by the assessee mentioned as below :

Total Income	Fee Rs.
Where the total income assessed is up to Rs. 1,00,000/-	Fee Rs. 250/-
Where the total income assessed is up to Rs. 1,00,000/- to Rs.2,00,000/-	Fee Rs. 500/-
Where the total income assessed exceeds  Rs. 2,00,000/-	Fee Rs. 1,000/-
Where the subject matter of an appeal is not covered under (1),(2),(3) above	Fee Rs. 250/-

 2. If the delay is made by the assessee in filling the appeal within the prescribed time i.e. within 30 days, the delay would be granted or rejected by the Commissioner (Appeals) on the reasonable ground if submitted by the appellant.

3. The Appeal should be filed within 30 days in Form No. 35 in duplicate, duly appended by grounds of appeal, duly signed and verified by the authorised person to sign the return.

4. It is to be noted that the appeal will not be admissible if the undisputed portion of the income tax paid and the copy of payment of such amount is enclosed with the appeal as the evidence of Payment.

5. The appeal should be along with copy or order passed by the Assessing Officer and of notice of demand.

More Commentary :

The Commissioner (Appeals) may hear or decide the case/appeal within one year from the end of financial year in which the appeal is filed. The appeal may be allowed or dismissed by the Commissioner (Appeals). The Commissioner has power to enhance the income, interest and penalty.

The appeal once filed cannot be withdrawn by the applicant, unless the permission is granted by the Commissioner (Appeals). The grounds of appeal can be altered, added before the date of hearing of the appeal.

• Appeal to Appellate Tribunal : Section 253 -

In the following circumstances, the appeal may be filed to the Appellant Tribunal.

1. An order passed by the Assessing Officer u/s 115VZC.

2. An order of revision u/s 263.

3. A penalty order u/s 271, 271A or 272A, passed by the Commissioner.

4. Against the order passed by the Commissioner (Appeals).

5. An order for registration of a trust u/s 12AA or u/s 80G(5)

• Requirements for filling the appeal to Appellate Tribunal :

1. The free to be paid by the assessee for filing an appeal to Appellate Tribunal is mentioned as below :

Total Income	Fee Rs.
Where the total income assessed is up to Rs. 1,00,000/-	Fee Rs. 500/-
Where the total income assessed is up to Rs. 1,00,000/- to Rs.2,00,000/-	Fee Rs. 1,500/-
Where the total income assessed exceeds Rs. 2,00,000/-	Fee of 1% of the income assessed subject to a maximum of Rs.10,000/-
Where the subject matter of an appeal is not covered under (1),(2),(3) above	Fee Rs. 500/-
Application for stay of demand	Fee Rs. 500/-

 2. Three copies of the paper book containing copies of all documents, if any relied upon.

3. Three copies of any order of the Tribunal or High Court or The Supreme Court, relied upon.

4. Two copies (one should be certified copy) of the order appealed against and two copies of the relevant order of the assessing officer.

More Commentary -

The Tribunal may on merits, issue a stay order for a period up to 180 days and the appeal shall be disposed within the period of stay.

The Appellate Tribunal may accept or reject the appeal in which case the appeal is said to be allowed or dismissed, respectively. It is important to note that the order of Appellate Tribunal is final on all matters of facts.

The department may also file and appeal only if the tax effect exceeds Rs. 2 lacs. The Tribunal may hear and decide the case / appeal within 4 years from the end of the financial year in which such appeal is field.

If the points of law arise from the appellant tribunal the Appeal can be made before National Tax Tribunal. (w.e.f. 28 Dec. 2005)

• Appeal to National Tax Tribunal -

The National Tax Tribunal may condone the delay up to 60 days beyond the prescribed period of 120 days in appropriate cases. In case of order appealed against involves the payment of any tax, the appeal shall not be admitted unless at least 25% of such tax involved has been deposited.

With effect from 28 December, 2005 the National Tax Tribunal Act, 2005 is enacted. A National Tax Tribunal has been established with effect from 6 January. 2006, to adjudicate upon disputes with respect to levy, assessment, collection and enforcement of direct and indirect taxes.

Any person aggrieved by an order of the Income Tax Appellate Tribunal involving a substantial question of law, may file as appeal to the National Tax Tribunal. The appeal should be file within 120 days from the date of receipt of the order appealed against.

• Appeal to the High Court : Section 260A -

The Appeal will be admissible only if there is question of law is involved.

The Appeal would be filed before the High Court form every appellate order passed by the Appellate Tribunal (up to 5-1-2006).

The appeal to be filed before High Court within 120 days of the date of receipt of the order appealed against.

The Appeal may be before High Court by the aggrieved assessee or the department. It is to be noted that the department might be filed appeal before High Court if the tax effect exceeded Rs.4,00,000/-.

• Section 260A (2A) :

The High Court may admit an appeal after the expiry of the period of 120 days referred to in clause (2)(a), if it is satisfied that there was sufficient cause for not filing the same within that period. (w.e.f. 1-10-2010)

The question of law in the appeal would be heard by the bench of two judges and decided by majority opinion.

• Appeal to Supreme Court -

The department may appeal before the Supreme Court, only if the tax effect exceeds Rs.10 lakhs.

Any person arrived by an order of the National Tax Tribunal, may appeal before the Supreme Court, within 60 days from the date of Communication of the National Tax Tribunal's order to him.

Against the order of High Court (Before 6-1-2006), appeal lies before the Supreme Court. If the High Court certifies that the case is fit for appeal to the Supreme Court, then on the such case will be admissible in the Supreme Court. The Supreme Court will hear and decide the appeal on merits.