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APPEALS AND REVISION

APPEALS AND REVISION. AUTHORITIES INVOLVED. COMMISIONER OF INCOME TAX APPELLATE TRIBUNAL HIGH COURT SUPREME COURT. APPEAL TO THE COMMISSIONER.

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APPEALS AND REVISION

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  1. APPEALS AND REVISION

  2. AUTHORITIES INVOLVED COMMISIONER OF INCOME TAX APPELLATE TRIBUNAL HIGH COURT SUPREME COURT

  3. APPEAL TO THE COMMISSIONER Introduction of new appellate authority called Commissioner of Income-tax (Appeals). Any tax-payer aggrieved by an order of the Assessing officer can appeal to the Deputy Commissioner (appeals). Appeal against the decisions and orders passed by Deputy Commissioner lies with Commissioner of Income tax who is an administrative authority and an appellate authority.

  4. Appealable order before commissioner (APPEALS) 1) Against an • An order passed by a Joint Commissioner u/s 115VP(3)(ii) or an order making the assessee liable to tax but where he denies his liability. • An intimation u/s 143(1) or 143(1B) objecting to the adjustments made, • An order of assessment u/s 143(3) or 144 as regards income assessed or to an amount of loss computed or to the status under which he is assessed • An order of assessment made, where the assessee being an employer objects to the value of Fringe Benefits assessed • An order of assessment or reassessment made u/s115WG.

  5. 2) An order of assessment, reassessment, or re-computation of income. • 3) An order u/s154 or 155 by which his tax liability is enhanced or refund is reduced or to allow the claim made by him under either of these sections: • 4) An order made u/s170(2) or(3) regarding assessment on succession: • 5) An order made u/s171 regarding partition of HUF: • 6) An order made u/s237 regarding refund: • 7) An order imposing a penalty u/s 158BFA(2) regarding levy of interest on assessment under search and seizure: • 8) An order imposing a penalty u/s271B and 271BB regarding failure to get the accounts audited or failure to subscribe in eligible issue: • 9) An order made by Deputy Commissioner imposing a penalty u/s271C, 271CA for not deducting tax at source: • 10) An order made by an Assessing Officer except by Deputy Commissioner under the provisions of this Act in the case of such persons or class of persons as directed by CBDT.

  6. PRE-REQUISITES FOR APPEAL • Appeal must be made in prescribed form and verified in prescribed manner. • The appeal must be accompanied by a receipt of payment of fee. The appeal shall be presented in the prescribed form and verified in the prescribed manner, within 30 days of the following dates: • a) date of the service of the relevant notice of demand • b) date on which tax is deducted u/s195(1) relating to the deduction of tax from payments to non-residents • c) in any other case, the date on which intimation of the order against which appeal is preferred. No appeal shall be admitted unless at the time of filing of the appeal: • 1) where a return has been filed by the assessee, the assessee has paid the tax due on the income returned by him:or • 2) where the return has not been filed by the assessee, the assessee has paid an amount equal to the amount of advance tax which was payable by him

  7. Procedure in appeal • Under section 250(I), the D.C. (A) and Commissioner (appeals) shall fix a day and place or the hearing of the appeal and shall give notice of the same to the appellant and to the I.T.O. against whose order the appeal is preferred. • The following shall have the right to be heard at the hearing of the appeal • (a) The appellant either in person or by an authorized representative ; • (b)Assessing Officer, either or by a representative • The Commissioner shall have the power to adjourn the hearing of the appeal from time to time. • The Commissioner, may at the hearing of the appeal, allow the appellant tom go into any ground of appeal, not specified in the grounds of appeal, if he is satisfied with the omission of that ground from the form of appeal was not wilful or unreasonable. • The order of Commissioner disposing of the appeal shall be in writing and shall state the points for determination, decision thereon and the reason for the decision. • The Commissioner may decide upon the appeal within a period of one year fro the end of financial year in which the appeal is made. • On the disposal of the appeal, the orders passed by them shall be passed on the assessee as well as to the Commissioner.

  8. Powers of Commissioner (Appeals) In disposing of the appeal, the Commissioner (appeal) has following powers: a) to confirm, reduce, enhance, or annual the assessment b) to conform, cancel, enhance, or reduce the penalty imposed; and c) in other cases to pass such orders in the appeal as he thinks fit. The Commissioner (appeals) will not pass any order enhancing the tax liability or a penalty or reducing the amount of refund without giving a reasonable opportunity to the appellant of being heard. He may pass orders on such matters which may not have been referred to him.

  9. Appellate Tribunal If an assessee is not satisfied with an order passed by the Deputy Commissioner (Appeals), or Commissioner (Appeals) he is entitled to file an appeal to higher authority known as the Appellate tribunal. The Appellate Tribunal is the final authority on question of fact. The appellate Tribunal is not an income tax authority but it is a final fact-finding authority. The decisions of Appellate Tribunal, on a question of fact, cannot be disturbed and it can be revised only when there is no evidence to support it or where the finding is perverse. The tribunal shall be constituted by the central government and shall consist of as many judicial and accountant members as it thinks fit. It shall discharge such functions and exercise such powers as are conferred on the Appellate Tribunal by the act . Ordinarily a judicial member of Appellate Tribunal shall be appointed as its President by the Central Government.

  10. Appealable orders The following matters may be referred to the Appellate Tribunal on an appeal by the assessee : (a)an order passed by Deputy Commissioner (Appeals) or Commissioner (Appeals) relating to: (1)rectification of mistake u/s 154; or (2)decision given on an appeal u/s 250; or (3)order of penalty u/s 271, or 271A or 272A; or (b)an order passed by the Commissioner u/s 263 under revisions; or (c) an order passed by a Chief Commissioner or a Director General or a Director . (d) an order passed by an Assessing Officer u/s 115VZC(1). The Assessing Officer can file an appeal on directions from Commissioner to the Appellate Tribunal only when the Deputy Commissioner decides a point against the authorities in an appeal or in an order under section 159 . The appeal can be filed under this section within 30 days only.

  11. Procedure in appeal The Tribunal shall have the powers to regulate its proceedings in its own manner. The Tribunal shall for the purpose of discharging the functions have all the powers conferred upon different Income-tax authorities u/s131m the proceedings before the appellate tribunal shall be deemed to be judicial proceedings for section 196 of I.P.C. In case of disagreement on any issue in appeal between the members of the bench. The matter has to be referred by the president to one or more members of the tribunal and the matter will be decided by the majority of the members who hear the case including the members who heard it. In case of appeal by an assessee whose tax liability does not exceed Rs.100000, the president or any other member of the tribunal may dispose it off sitting single.

  12. Powers of the Appellate Tribunal The Tribunal has the power to allow the appellant to withdraw an appeal. Appellate Tribunal is not a court but enjoys all the powers which any appellate court enjoys under Code of Civil Procedure. Section 254(1) empowers the Appellate Tribunal to pass such orders, ofcourse after giving both the parties to the appeal an opportunity of being heard, which it thinks just in relation to the matters that arise in the appeal. The Appellate Tribunal has the power to issue any type of order which it thinks desirable in the relevant case but at the same time it cannot sit on judgment on a matter which was not referred to the Tribunal for its decision and also cannot give a finding in a question which is not in dispute and which does not form the subject-matter of the appeal before it. While giving its judgment, the Tribunal must consider every fact for and against the assessee with due care and not act on conjectures or irrelevant considerations.

  13. Limitations of period on Appellate Tribunal • With a view to rectify any mistake apparent from the record the Appellate Tribunal may, at any time within 4 years of the date of the orders, amend any order passed by it and shall make such amendment if the mistake is brought to its notice by the assessee or the Assessing Officer. • The Appellate Tribunal may decide upon the appeal within a period of Four years from the end of financial year in which the appeal is made. • In case any order of stay of proceedings relating to an appeal filed u/s 253(1) is made, the Appellate Tribunal shall dispose of the appeal within 180 days from the date of such order. In case appeal is not disposed off within specified period the stay order shall stand vacated after the expiry of specified period. • In a case where any amendment results into enhancement of the assessment or reducing the refund if any, or otherwise increasing the liability of the assessee, the assessee must be served with a notice by the Appellate Tribunal of its intention to do so and must allow the assessee a reasonable opportunity of being heard.

  14. Reference to High Court before 1-10-1998 The assessee or the Commissioner may within 60 days of the order of the Appellate Tribunal, require the Appellate Tribunal to refer to the High court of the state concerned any question of law arising out of such order. Such a reference shall be made on an application by the assessee or by the Commissioner and shall be accompanied by a fee of Rs. 200 if it is preferred by the assessee and irrespective of the number of questions of law specified in the application. The Tribunal shall, within 120 days of the receipt of such application draw up a statement of the case and refer the case to High court or refuse to refer the case on the grounds that no question of law is involved. In such a case, the assessee or the Commissioner, as the case may be, within 6 months of the date on which he is served with notice of such refusal, apply directly to the High court. If the High court is not satisfied with the decision of the Appellate Tribunal, it may require the Appellate Tribunal to state the case and refer it and on receipt of such requisition the Appellate Tribunal shall do so. The High court, upon hearing in any such case shall decide the questions of law and shall deliver its judgment stating the grounds on which such decision is based. A copy of the judgment shall be sent to the Appellate Tribunal to enable it to pass necessary order for the disposal of the case in accordance with the decision.

  15. Obligation on Appellate Tribunal In any case where a proper application to the Tribunal is made to state the case and refer it to the High court, it is obligatory on the part of the Tribunal to send the reference to the High court if a question of law does arise out of the Tribunal’s appellate order. In case the reference application is rejected on the ground that no question of law arises, applicant can withdraw his application and in such a case he is allowed the refund of the fees also. But no refund will be allowed if his application was rejected being time barred. In case the assessee opts to withdraw his application and thus gets the refund of the fees, he cannot thereafter make an application to the High court. In case the Tribunal has found that no question of law arises out of its order and the aggrieved party has referred its case to the High court, it is for the Court to determine what question or questions of law arise out of the appellate order of the Tribunal. Even when the Court has sent a requisition to the Tribunal to state a case and refer it to the Court, the Court’s requisition should indicate the question or questions of law which according to the High court arise out of the Tribunal’s appellate order. At the end it can be said that all questions of facts regarding assessee’s income are for Tribunal to decide and the Court cannot go beyond the Tribunals finding of fact. A reference to the Court can only be preferred on a question of law.

  16. Direct appeal to High court from 1-10-98 onwards • An appeal shall lie to the High court against the decision of the Appellate Tribunal. The appeal will be admitted only if High court is satisfied that the case involves a substantial question of law. • The appeal can be made within 120 days from the day on which the order, against which appeal is being made, was communicated to the assessee. It must be accompanied by a fee of s. 10000 if appeal is filed by the assessee. The appeal shall precisely state the substantial question of law. • If High court is satisfied that a substantial question of law is involved in any case, it shall formulate such question of law. • The appeal shall be heard only on question of law so formulated and respondents shall have the right to argue that question of law is involved. The High court can hear any other question of law, if it is satisfied that the case involves such other question of law. • The High court may determine any other matter which: a) has not been determined by the Appellate Tribunal b) has been wrongly determined by the Appellate Tribunal The Assessing Officer shall give effect to the Judgment of the High court on the basis of certified copy of the Judgment.

  17. Reference to the Supreme court Any party dissatisfied with the decision of the High Court , has the right to file an appeal against such decision to the Supreme Court. When the Supreme Court varies its judgment from that of High court, the Tribunal shall pass such orders as are necessary to dispose off the case in the light of the judgment of the Supreme court. In case the High Court finds that the case is not worthy referring to the Supreme Court and so refuses to certify the case to be a fit one for appeal to the Supreme Court, an application may be made to the Supreme Court under Article136 of the constitution for special leave to appeal. Normally, the High Court is supposed to certify the case as a fit one for appeal and grant leave to appeal to the Supreme Court if a substantial question of law is involved in that case and the same is likely to occur in successive years and otherwise also the question is of great public and private importance. If any application made for reference, is on a point on which there are conflicting decisions of the different High Courts, the Appellate Tribunal may refer the matter through its President direct to the Supreme court.

  18. Appeal to Supreme court after 1-10-98 • 1) An appeal to Supreme Court can be made: a) against the judgment of the High Court on reference made u/s 256 b) against the order of High Court made u/s 254 before 1-10-98 c) against the judgment in appeal made to High Court u/s 254 after 1-10-98, provided it is certified by the High Court to be a fit case for appeal to Supreme Court. • 2) U/s 262(1) the appeal will be heard in same manner as is applicable in appeals against the decrees of High Court • 3) The cost of appeal shall be at the discretion of Supreme court. If the Supreme Court varies the judgment of the High Court, effect shall be given to the judgment of Supreme Court in same manner as given u/s 260.

  19. General provisions • Notwithstanding that a reference has been made to the High Court or the Supreme Court, or an appeal has been referred to the Supreme Court, tax shall be payable in accordance with the assessment made in the case. • On a petition made for the execution of orders of the Supreme Court, in respect of any costs awarded thereby, the High Court may transmit the order for execution to any court subordinate to the High Court. • In case any change is made or new assessment is made, as a result of appeal u/s 246 or 253, on the assessment of Association of Persons or Body of Individuals, the Deputy Commissioner (appeals), Commissioner (appeals) or the Appellate Tribunal may direct the Assessing Officer either to amend the assessment already made or to make the assessment afresh. • In computing the period of limitation prescribed for an appeal, or an application under this Act, the day on which the order complained of was served and if, the assessee was not furnished with a copy of the order when the notice of the order was served upon him, the time required for obtaining a company of such order shall be excluded.

  20. REVISIONRevision of a best judgment assessment The assessee may, under prescribed circumstances, make an application to the Assessing Officer against his orders issued under section 144 of the Act making Best Judgment Assessment for not complying with the notices issued under Section 139(2) or 142(1) or 143(2) for revision of such orders. The prescribed grounds are: • i) that he was prevented by sufficient cause from filing the return • ii) That he did not have a reasonable opportunity to comply or was prevented by sufficient cause from complying with the terms of any notice served either under Section 142(1) or under Section 14(2). In case the Assessing Officer is satisfied with the contention of the assessee, he shall cancel the original Best Judgment Assessment and shall make a fresh regular assessment.

  21. Revision of orders Prejudicial to Revenue by Commissioner Section 263 of the act, gives powers to Chief Commissioner or Commissioner to review any orders passed by Assessing Officer and to pass such orders thereon as the circumstances of the case justify. While passing such orders he may enhance, cancel or modify an assessment or he may order a fresh assessment. The assessee has to be provided an opportunity of being heard in this case. No order shall be made under this section after the expiry of two years from the end of financial year in which the order sought to be revised was passed. U/s 263(3) an order of revision may be passed at any time in the case of an order which has been passed in the light of any finding or direction contained in the order of the Appellate Tribunal, the High Court or the Supreme Court. As per Section 264, the Commissioner may be given such powers whereby he may be able to revise such orders which are prejudicial to the assessee and thus this section empowers him to exercise his powers in favour of the assessee. The Commissioner can exercise his revisional power only if the original order is not appealable or if appealable, the assessee has either waived his right of appeal already or the appeal has become time-barred.

  22. Revision of other orders by Commissioner Under the provisions of section 264 in case of any order, the Commissioner may either of his own motion or on application by the assessee for revision, call for the record of any proceedings and make such inquiries and orders thereon as he thinks fit. These orders cannot be prejudicial to the assessee. In this case the revision proceedings can be started by the Commissioner of his own motion within one year of the passing of the order sought to be revised. If the assessee wants revisions of any order, the application accompanied by a fee of Rs. 500 only from 1-6-2001 must be made within one year of the date on which the order in question was communicated to him or the date on which he otherwise comes to know of it, whichever is earlier. The Commissioner shall not revise any order in the following circumstances: Where an appeal against the order lies to the Deputy Commissioner (appeals) or to the Appellate Tribunal or it has not been made and the time for its making has not expired or in the case of an appeal to the Tribunal, the assessee has not waived his right of appeal; or Where the order is pending on an appeal before the Deputy Commissioner ; Where an appeal has been made to Appellate Tribunal against the order.

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