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Appeals
&
Revisions
Appeal and Revision
General Overview
There are two ways to seek justice under Income Tax Act,
1961. – Appeals and Revision Appeal can be filed by
Assessee or Income Tax department. The chain of appeals
is as follows
● CIT (Appeals)
●ITAT
●High Court
●Supreme Court
Revision applications is filed with CIT u/s 264.
Appeal to CIT (Appeals) – Section
246A
Appeal to CIT (Appeals) – Section 246A
Time-limit for presenting an appeal before
CIT(A)
Filing of Additional Evidences
Orders
• In case of an appeal against the assessment order the CIT(A) may confirm, reduce,
enhance or annul the assessment.
Appeal to Income Tax Appellate Tribunal (ITAT)
-Section 254
• Constitution of ITAT-
The ITAT is constituted by the Central
Government and functions under the
Ministry of Law. ITAT consists of two
classes of members – Judicial and
Accountant. It has a president and
certain members.
Appealable Orders-
• A taxpayer can file an appeal to the ITAT in respect of following orders:
• Rectification order passed by the CIT of Income-Tax (Appeals) under
section 154; or
• Order passed by the CIT of Income-Tax (Appeals) under section 250,
section 270A, section 271, section 271A, 271J or section 272A; or
• An order passed by a Principal CIT of Income-Tax or CIT of Income-Tax
under section 12AA (it relates to registration application made by a
charitable or religious trust).
• An order passed by a Principal CIT of Income-Tax or CIT of Income-Tax
under section 80G(5)(vi) (it relates to approval of a charitable trust for
donations made to it which would be eligible for deductions in the hands
of the donor).
• An order passed by a Principal CIT of Income-Tax or CIT of Income-Tax
under section 263 (it relates to revision of the order of AO which is
considered as prejudicial to the interest of revenue).
• An order passed by a Principal CIT of Income-Tax or CIT of Income-Tax
under section 154 for rectification of order passed under section 263 .
• An order of penalty passed by a Principal CIT of Income-Tax or CIT of
Income-Tax under section 270A, under section 271 or under section 272A
Appealable Orders-
• A taxpayer can file an appeal to the ITAT in respect of following
orders:
• An order of penalty passed by a Principal CCIT or CCIT or a Principal
DG a DG or a Principal Director or Director under section 272A.
• An order passed by the AO under section 115VZC(1) (i.e., order of
excluding the taxpayer from tonnage tax scheme).
• An order passed by the AO under section 143(3) or under section
147 or under section 153A or under section 153C in pursuance of
the direction of Dispute Resolution Panel or a rectification order
passed under section 154 in respect of such order. An order
passed by the AO under section 143(3) or under section 147 or
under section 153A or under section 153C with the approval of the
Principal CIT of Income Tax or CIT of Income-Tax as referred to in
section 144BA(12) (i.e., assessment after invocation of General Anti-
avoidance Rules) or an order passed under section 154 or under
section 155 in respect of such order (applicable from 01-04-2016) .
Appealable Orders-
• A taxpayer can file an appeal to the ITAT in respect of following orders:
• An order passed by the CIT of Income-tax (Exemption) under section
10(23C)(vi) or Section 10(23C)(via) [it relates to filing of application by
educational institute or hospital (other than those which are wholly or
substantially financed by the Government or whose aggregate annual
receipt do not exceed Rs. 1 Cr.) for the purpose of grant of exemption
under section 10(23C)(vi) or section 10(23C)(via), respectively.]
• An order passed by the CIT of Income-tax (Exemption) under section
10(23C)(iv). It relates to approval of a charitable institution or fund for
exemption under section 10(23C)(iv) having regard to its objects and its
importance throughout India or throughout any State or States.
• An order passed by the CIT of Income-tax (Exemption) under section
10(23C)(v). It relates to granting exemption under section 10(23C)(v) to
any trust (including any other legal obligation) or institution formed wholly
for public religious purposes or wholly for public religious and charitable
purposes.
Appeal by Income Tax Department
Time- limit for presenting appeal
Form and signature
• The appeal to ITAT shall be filed in Form No.
36. In case of appeal by the taxpayer, the form
of appeal, the grounds of appeal and the form
of verification are to be signed and verified by
the person authorized to sign the return of
income under section 140
Memorandum of cross objection
• On filing of the appeal to the ITAT by the taxpayer or
by the AO (as the case may be) the opposite party
will be intimated about the appeal and the opposite
party has to file a memorandum of cross objection
with the ITAT. The memorandum of cross objection is
to be filed within a period of 30 days of receipt of
notice. The memorandum of cross objection is to be
filed in Form No. 36A. There is no fee for filing the
memorandum of cross objection. The ITAT may
accept a memorandum of cross objection even after
the period of 30 days if it is satisfied that there was
sufficient cause for not submitting the same within
the prescribed time.
Fees for filing the appeal
Hearing of the appeal by the ITAT
• The ITAT will fix the date of hearing along with the place of
hearing the appeal and will also notify the parties.
• A copy of memorandum of appeal is to be sent to the
respondent either before or along with such notice. The ITAT
will hear the appeal on the date fixed. The appeal may be
adjourned on other dates and in such a case the appeal will
be heard on the respective dates.
• If the appellant is called by the ITAT but fails to appear before
the ITAT either in person or through an authorized
representative, the appeal may be disposed of by the ITAT on
merits after hearing the respondent. Subsequent to ex parte
hearing, if the appellant appears before the ITAT and satisfies
the ITAT that there was sufficient cause in his case for non-
appearance before the ITAT, then set aside the ex parte order
and restore the appeal. Similar procedure is applicable where
appeal is disposed of in the absence of respondent.
Filing of additional evidence
• Filing of additional evidence
before the ITAT by parties to the
appeal is not permitted. In other
words, additional evidence of any
kind, cannot be filed before the
ITAT.
Order of the ITAT
• The member of bench of the ITAT hears the appeal.
After hearing the appeal, the ITAT will pronounce its
order and will communicate the order to the
taxpayer as well as the AO.
• Appeals are heard by a Bench comprising one judicial
member and one accountant member. Appeals
where total income computed by the AO does not
exceed Rs. 50 lakhs may be disposed of by single
member Bench.
• ITAT does not have power to review its own order. (♥
Just like review petitions filed before HC and SC)
Disposal of appeal
• Where it is possible, the ITAT shall
dispose off the appeal within a
period of four years from the end of
the financial year in which appeal is
filed. The time limit given here is
recommendatory (not mandatory)
Stay application
• The ITAT may, at any time within 6 months from the end of the month in which
the order was passed, rectify any mistake apparent from record, amend any
order passed by it if the mistake is brought to its notice by the taxpayer or AO.
• However, where such amendment has the effect of enhancing an assessment
or reducing a refund or otherwise increasing a liability of the taxpayer, it shall
not be made unless the Appellate Tribunal has given a notice to the taxpayer
of its intention to do so and has allowed the taxpayer a reasonable
opportunity.
• If the assessee applies for rectification, then the order should be passed
within 4 years from end of the financial year in which order sought to be
rectified was passed.
• ITAT is the final fact finding authority. That is to mean, if the case involves a
question of fact, then the order of ITAT is final and it cannot be appealed
against in High Court and Supreme Court. [♥It is to be noted that ITAT is final
authority in case of ‘question of Fact’. ‘Question of Law’ can still be appealed
further to HC and SC.
Appeal To High Court- Section 260A
1. Appeal to High Court can be filed only for question of law.
2. Appeal to the High Court against Appellate Tribunal’s order can be filed by
the tax payer or the CCIT/CIT within 120 days of receipt of the order and in
the form of memorandum of appeal, precisely stating the substantial
question of law involved. HC may admit the appeal after 120 days if it is
satisfied that there was a reasonable cause for failure to file the appeal within
the said 120 days.
3. Where the HC is satisfied that a substantial question of law is involved, it
shall formulate that question. The appeal shall be heard only on the question
so formulated, Provided that nothing shall be deemed to take away the
power of the court to hear, the appeal on any other substantial question of
law not formulated by it, if it is satisfied that the case involves such question.
4. The High Court may determine any issue which—
(a) has not been determined by the ITAT; or
(b) has been wrongly determined by the ITAT
5. From the side of IT deptt, CIT or Chief CIT shall file an appeal.
6. As per section 260B, the case before High court shall be heard by a bench
of not less than two judges.
Appeal To Supreme Court- Section
261
1. The order of Supreme court will be a final
order.
2. Appeal can be made to Supreme Court within
90 days from receipt of order by CIT.
3. Only those cases can be appealed to
Supreme Court which High court allows as to
be fit for appeal to Supreme Court.
Section - 158A Procedure when assessee claims identical
question of law is pending before High Court or Supreme Court.
Section - 158A Procedure when assessee claims identical
question of law is pending before High Court or Supreme Court.
Section - 158A Procedure when assessee claims identical
question of law is pending before High Court or Supreme Court.
Revisions
• General overview-
Revision is done by CIT of Income Tax (CIT).
Revision can be done by the CIT under two
sections viz. Section 263 and 264. Section 263 is
used by the CIT to revise the orders of AO which
are prejudicial for the Income Tax department.
Section 264 can be used by the CIT on
application of assessee.
Section 263- Revision of orders prejudicial
to revenue
Section 264 - Revision of other orders
Section 264 - Revision of other orders
Section 264 - Revision of other orders
Minimum Tax effect for filing
appeal
Section 154- Rectification of
mistake
(1) With a view to rectifying any mistake apparent from the record an
income-tax authority (ITAT and settlement commission are not IT
Authority) referred to in section 116 may,—
(a) amend any order passed by it under the provisions of this Act;
(b) amend any intimation or deemed intimation u/s 143(1);
(c) amend any intimation u/s 200A(1);
(d) amend any intimation u/s 206CB(1).
(1A) where any matter has been decided in any appeal, then the rectification
order can be passed for matter other than the matter which has been decided
in appeal.
(2) The authority concerned—
(e) may make an amendment of its own motion, and
(f) shall make such amendment for rectifying any such mistake which has
been brought to its notice by the assessee or by the deductor or by the
collector, and where the authority concerned is the CIT (Appeals), by the
AO also.
Section 154- Rectification of
(3)
mistake
An amendment which has the effect of enhancing an assessment or reducing the refund shall be made after giving
the notice of such intention and after giving an opportunity of being heard.
(4) Order shall be passed in writing.
(5) If amendment has the effect of reducing assessment or liability, then AO shall grant the refund.
(6) Where any such amendment has the effect of enhancing the assessment or reducing a refund already made or
otherwise increasing the liability of the assessee, the AO shall serve on the assessee, a notice of demand in the
prescribed form specifying the sum payable, and such notice of demand shall be deemed to be issued under section
156.
(7) Save as otherwise provided in section 155 or section 186(4) no amendment under this section shall be made after
the expiry of 4 years from the end of the financial year in which the order sought to be amended was passed.
(8) Where an application for amendment under this section is made by the assessee or by the deductor or by the
collector to an income-tax authority, the authority shall pass an order, within a period of six months from the end of the
month in which the application is received by it,—
(a) making the amendment; or
(b) (b) refusing to allow the claim.
Section 154- Rectification of
Points to be noted:-
mistake
1. Section 248- Where under an agreement or other arrangement, the tax
deductible on any income, other than interest, under section 195 is to be
borne by the person by whom the income is payable, and such person
having paid such tax to the credit of the Central Government, claims that no
tax was required to be deducted on such income, he may appeal to the
Commissioner (Appeals) for a declaration that no tax was deductible on such
income.
2. If any defects or errors are found in the memorandum of appeal filed with
CIT(A), then memorandum of appeal and grounds of appeal is returnded to
the appellant. This is returned along with ITNS 68.
3. There is another kind of appeal which is made against the order of TRO
under Rule 86 of Second Schedule of income Tax Act. Such appeal is made to
CIT or CCIT within 30 days of order. Such appeal is made in Form No. ITCP
29A.
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