AN OVERVIEW OF APPELLATE PROCEEDING BEFORE COMMISSIONER OF INCOME TAX(APPEALS)

AN OVERVIEW OF APPELLATE PROCEEDING BEFORE COMMISSIONER OF INCOME TAX(APPEALS) BY:-DR. RAKESH GUPTA FCA, FCS, FICWA, LLB, PhD. EX-MEMBER, INCOME TAX APPELLATE TRIBUNAL RAKESH RAJ & ASSOCIATESRRA TAXINDIA, ADVOCATESNEW DELHI

RIGHT TO APPEAL IS A STATUTORY RIGHT AND NOT AN INHERENT RIGHT

RIGHT TO APPEAL – TO BE CONSTRUED IN A LIBERAL, REASONABLE AND PRACTICAL MANNER- CIT VS ASHOKA ENGG 194 ITR 645

PRESCRIBED ORDERS ALONE ARE APPEALABLE • APPEAL AGAINST THE APPEAL EFFECT ORDER? • APPEAL AGAINST THE ORDER CHARGING INTEREST U/S 234A, 234B ETC? • APPEAL AGAINST THE ORDER INITIATING PENALTY PROCEEDINGS? • APPEAL AGAINST ORDER ASSESSING INCOME WRONGLY OFFERED?

PRESCRIBED ORDERS ALONE ARE APPEALABLE(Contd.) • APPEAL AGAINST THE ISSUE DECIDED BY REVISIONAL OR APPELLATE AUTHORITY IN THEIR ORDER? • APPEAL AGAINST THE PROTECTIVE ASSESSMENT? • REMEDY AGAINST ORDERS NOT APPEALABLE?

“AGGRIEVED ASSESSEE” ALONE IS COMPETENT TO FILE APPEAL • APPEAL- RIGHT OF REVISION HOWEVER PRESERVED U/S 263. • APPEAL AGAINST THE AGREED ADDITION? • APPEAL BY THE EX PARTNER OF THE FIRM.

PRECAUTIONS IN FILING OF APPEAL APPROPRIATE FORM TO BE USED ANNEXURES TO ACCOMPANY THE APPEAL MEMO-DEMAND NOTICE IN ORIGINAL TAX TO BE PAID ON RETURNED INCOME FILING FEE TO BE PAID

PRECAUTIONS IN FILING OF APPEAL (Contd.) • APPEAL BE FILED WITHIN PRESCRIBED LIMITATION PERIOD • SIGNING OF APPEAL MEMO BY COMPETENT PERSON • SEPARATE APPEALS FOR EACH YEAR IF ORDER PASSED IS CONSOLIDATED ORDER RIGHT TO WITHDRAW THE APPEAL IS NOT THERE

PRECAUTIONS IN FILING OF APPEAL DRAFTING OF GROUNDS OF APPEAL TO BE MADE CAREFULLY-NO ARGUMENTATIVE ALL GROUNDS RELATING TO MAT, BF LOSS, SET OFF OF LOSS, AS ON DAY UNTENABLE LOOKING CLAIMS, DVO APPOINTMENT, REOPENING, OPPORTUNITY OF HEARING, DENIAL OF LIABILITY TO BE ASSESSED, ALTERNATIVE CLAIMS, BE TAKEN GROUND TAKEN CAN BE WITHDRAWN AT ANY TIME

PRECAUTIONS IN FILING OF APPEAL ILLUSTRATIONS:- “THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. AO HAS ERRED IN LAW AND ON FACTS IN ASSUMING JURISDICTION TO FRAME ASSESSMENT U/S 143(3) WITHOUT SERVING THE MANDATORY NOTICE U/S 143(2) WITHIN THE STATUTORY ALLOWABLE PERIOD.” “THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. AO HAS ERRED IN REOPENING THE ASSESSMENT U/S 147 WITHOUT COMPLYING WITH THE MANDATORY STATUTORY CONDITIONS PRESCRIBED U/S 147 TO 151 OF THE ACT.”

PRECAUTIONS IN FILING OF APPEAL ILLUSTRATIONS:- “THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. AO HAS ERRED IN REFERRING THE MATTER OF VALUATION OF PROPERTY TO THE DVO & RELYING UPON HIS REPORT.” “THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. AO HAS ERRED IN LAW AND ON FACTS IN MAKING ADDITION OF RS……ON ACCOUNT OF CAPITAL GAIN BY TAKING FAIR MARKET VALUE AS DEEMED SALE CONSIDERATION.

PRECAUTIONS IN FILING OF APPEAL ILLUSTRATIONS:- “THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. AO HAS ERRED IN LAW AND ON FACTS IN REJECTING THE BOOKS OF ACCOUNTS BY INVOKING THE PROVISIONS OF SECTION 145A AND HAS FURTHER ERRED IN MAKING TRADING ADDITION BY APPLYING G.P. RATE OF 10% WITHOUT ANY BASIS, MATERIAL OR EVIDENCE AND BY RECORDING INCORRECT FACTS”.

PRECAUTIONS IN FILING OF APPEAL ILLUSTRATIONS:- “THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. AO HAS ERRED IN LAW AND ON FACTS IN MAKING ADDITION OF RS……..ON ACCOUNT OF LOAN OF MR. X BY TREATING THE SAME AS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT. “THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. AO HAS ERRED IN LAW AND ON FACTS IN FRAMING THE ASSESSMENT BY MAKING ADDITIONS AND DISALLOWANCES WITHOUT GIVING ADEQUATE OPPORTUNITY OF HEARING AND WITHOUT CONFRONTING THE MATERIAL COLLECTED AT THE BACK OF THE APPELLANT.

DO NOT WAIT FOR ORDER ON APPLICATION U/S 154 MOVED AGAINST ASSESSMENT ORDER-FILE APPEAL AGAINST ASSESSMENT KEEP THE APPEAL ALIVE FOR RELIEF IN FUTURE-QUANTUM APPEAL ALLOWED BY TRIBUNAL BUT NO APPEAL PREFERRED AGAINST PENALTY-NOTHING CAN BE DONE FOR PENALTY AT THIS STAGE APPEAL ON MINOR ISSUES HAVING REPETITIVE IMPACT IN FUTURE YEARS

WRITTEN SUBMISSIONS PREFERABLY BE FILED • WRITTEN REPLY BE PREFERRED TO QUERY ASKED INSTEAD OF INSTANT ANSWER

PAPER BOOK CONTAINING PLEADINGS AND EVIDENCES PLACED BEFORE ASSESSING OFFICER, BE FILED PAST HISTORY-AN IMPORTANT EVIDENCE-BUT TO BE USED CAREFULLY AT THIS STAGE REPRESENTATION OF INFORMATION BASED ON INFORMATION ALREADY FILED IS POSSIBLE DETAILS GIVEN IN PAST ASSESSMENT CAN BE MADE PART OF PAPER BOOK

CAN ADDITIONAL GROUND BE MOVED AND IF YES, IN WHAT CIRCUMSTANCES? SECTION 250(5)

CAN ADDITIONAL EVIDENCE BE FILED AND IF YES, IN WHAT CIRCUMSTANCES, MODE AND MANNER? RULE 46A OF INCOME TAX RULES 1962

STAY PETITION BEFORE COMMISSIONER WHETHER MAINTAINABLE? – 231 ITR 892- INHERENT POWERS OF THE APPELLATE AUTHORITY

FACTS NOT RECORDED IN THE ORDER OR MENTIONED CONTRARY TO THE RECORD, IN THE ORDER- IMPLICATIONS AND REMEDY

ADJOURNMENT APPLICATIONS MUST EXPLAIN THE REASONS FOR SEEKING OF ADJOURNMENTS AND WHEREVER POSSIBLE, TO BE SUPPORTED WITH DOCUMENTRY AND CIRCUMSTANTIAL EVIDENCE

NEW PLEA OF FACTS AND LAW- WHETHER CAN BE RAISED BEFORE FIRST APPELLATE AUTHORITY?

TO SEEK REMAND REPORT IS THE DISCRETION OF APPELLATE AUTHORITY

POWERS OF COMMISSIONER • TO GRANT ADJOURNMENTS • TO SEEK REMAND REPORT FROM THE ASSESSING OFFICER • TO CONDONE DELAY IN FILING OF APPEAL

POWERS OF COMMISSIONER (contd.) TO SEEK ADDITIONAL FACTS AND EVIDENCES HAVING BEARING ON THE ISSSUE BEFORE HIM TO EXERCISE POWERS U/S 131 TO PASS ORDER ON ALTERNATE PLEA

POWERS OF COMMISSIONER (contd.) TO ADMIT ADDITIONAL GROUND AND DECIDE THE ADDITIONAL GROUND TO ADMIT ADDITIONAL EVIDENCE FILED BY THE APPELLANT TO ENHANCE ASSESSMENT, PENALTY ETC TO STAY OF DEMAND

POWERS OF COMMISSIONER (contd.) TO IMPOSE PENALTY IN SPECIFIED CIRCUMSTANCES TO PASS THE APPEAL ORDER TO RECTIFY APPARENT ERRORS IN THE ORDER

DUTIES OF, AND RESTRICTIONS ON THE POWERS OF COMMISSIONER TO EXERCISE DISCRETION WHEREVER REQUIRED, IN FAIR AND JUDICIOUS MANNER ON OBJECTIVE CONSIDERATIONS OF FACTS e.g. IN THE MATTERS OF GRANT OF ADJOURNMENTS, CONDONATION OF DELAY OF FILING OF APPEAL, ADMISSION OF ADDITIONAL GROUND AND ADDITIONAL EVIDENCE, STAY OF DEMAND

DUTIES OF, AND RESTRICTIONS ON THE POWERS OF COMMISSIONER (Contd.) TO GIVE OPPORTUNITY OF HEARING TO REVENUE BEFORE ADMISSION OF ADDITIONAL GROUND AND ADDITIONAL EVIDENCE

DUTIES OF, AND RESTRICTIONS ON THE POWERS OF COMMISSIONER (Contd.) TO PASS APPEAL ORDER WHICH SHOULD BE SPEAKING ORDER CONTAINING REASONS FOR HIS CONCLUSION

DUTIES OF, AND RESTRICTIONS ON THE POWERS OF COMMISSIONER (Contd.) NO POWER TO DISMISS IN DEFAULT NO POWER TO SET ASIDE THE ORDER OR RESTORE ISSUE NOT TO BE CONTROLLED BY BOARD’S DIRECTION

DUTIES OF, AND RESTRICTIONS ON THE POWERS OF COMMISSIONER (Contd.) LIMITATION PERIOD TO BE OBSERVED FOR DISPOSAL OF APPEAL ALBEIT AS FAR AS POSSIBLE NO POWER TO DISCOVER NEW SOURCE OF INCOME

THANK YOU

AN OVERVIEW OF APPELLATE PROCEEDING BEFORE COMMISSIONER OF INCOME TAX(APPEALS)