1 / 20

Appeal before Commissioner of Income-tax

AJAY WADHWA LLB, FCA AJAY WADHWA AND ASSOCIATES A-445 DEFENCE COLONY NEW DELHI Mb 9818653331 41554222 AND 41554243. Appeal before Commissioner of Income-tax. Section 246A – Appealable orders Section 248 – Appeal by person denying liability to tax

webb
Download Presentation

Appeal before Commissioner of Income-tax

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. AJAY WADHWA LLB, FCA AJAY WADHWA AND ASSOCIATESA-445 DEFENCE COLONYNEW DELHIMb 981865333141554222 AND 41554243

  2. Appeal before Commissioner of Income-tax • Section 246A – Appealable orders • Section 248 – Appeal by person denying liability to tax • Section 249 – Form of appeal and limitation • Section 250 - Procedure in appeal • Section 251 – Powers of CIT(A)

  3. Issues • Payment of admitted tax – Section249(4) • Unless good and sufficient cause otherwise dismissal in limine. • Pending refund/direction of Court to be given effect to while calculating tax. Nokia Corporation 292 ITR 22 (Del) • Tax does not include interest. Manojkumar Beriwal 217 CTR 407 Bom. If law denying remedy-courts would save remedy if possible by interpretive process. Tax doesn’t include interest S 2(43). • Curable defect-Insufficient funds- sufficient cause 82 TTJ 284 (Ahd). Endeavor Industries 43 SOT 322 HYD- huge refund due to assessee and he also paid tax after filing of appeal-adjustment permitted.

  4. 2. Curing of irregularity – • Appellants signature – unsigned memo - Rajendra kumar Maneklal Sheth 213 ITR 715 (Guj), • 276 ITR 1 (Del): Rule 45- Memo signed by AR-procedural irregularity-curable-liberal interpretation. • Power of enhancement CIT A has no power to enhance by discovering new source of income, not mentioned in return, or considered in asstt, or considered by AO. Sardari Lal 251 ITR 864 (Del) FB, CIT v Union Tyres 240 ITR 556 Del, • Net loss converted to profit by rejecting books and estimating high GP rate-CIT A sought to enhance by taxing unexplained investment-impermissible. CIT v. Rai Bahadur Hardunoy 66 ITR 443(SC) • Nibheram Daluram 127 ITR 491 Something in AO to show he applied mind to subject matter with a view to its taxability or non taxability • Base decision: Shapoorji Pallonji Mistry 44 ITR 891 SC

  5. Taxing remittances from abroad- 23 SOT 227 Coch • AO taxes notional income-CIT A deletes notional income and disallows expenses – not valid 49 ITD 534 4. Inherent power to stay Paulsons Litho Works v. ITO (1994) 208 ITR 676 (Mad) 5. Condonation of delay. Wrong legal advise, compelling reasons, illness…. Royal Airways – 98 TTJ 665 (Del)/ 98 ITD 259 Concord of India Insurance Co. 118 ITR 507 (SC) law of limitation not to destroy rights of parties, Mst Katiji 62 CTR 23 SC,

  6. 6. CIT(A) – Decision of Tribunal – binding Article 141 of Constitution - Doctrine of stare decisis decision , CIT v. Godavari Devi 113 ITR 589 (Bom). ITAT anywhere has to respect High Court though of difference state particularly if no contrary decision of any other High Court against 232 ITR 771 (Del) Kamlakshi Finance 1992 Suppl (1) SCC 648 Eagle Flask Industries 72 ITD 455 Pune Prasad & Co 45 TTJ 282 Hyd Rikhabchand 81 TTJ 964 Pune 7. Prosecution of appeal (i) Adjournments, power of attorney (ii) Paper book (iii) Written submissions (iv) Additional evidence applications

  7. APPEAL EFFECT • No appeal against order of CIT A if tax effect 3 lakhs or less, 10 lakhs or less against Tribunal order, Rs 25 lakhs or less if appeal against order of High Court. Instruction No 3 of 9th February 2011. • Except where revenue audit objection accepted by Deptt, prosecution, constitutional validity, CBDT Circular decided against. • Binding on tax authorities. • Tax effect excludes interest. • Applies to pending appeals also and not only fresh appeals.

  8. Admission of additional evidence – Rule 46A Rule 46 A AO refuses to admit, Appellant prevented by sufficient cause to produce evidence called for by AO, App prevented by sufficient cause, any evidence relevant to ground of appeal and insufficient opportunity. Interest of justice – Prabhavati S. Shah 231 ITR 1, 68 TTJ 722 (Rajkot). Bonafide impression that AO satisfied with reply as no query raised: HLS Asia 121 TTJ 340 Del.

  9. DRAFT APPLICATION • The Hon’ble Commissioner of Income Tax (Appeals) II, • XXXXXXX • New Delhi. • Sub.:- M/s. ABC Pvt. Ltd. – A.Y.2001-02 – Furnishing of Additional Evidence under Rule 46A – Penalty u/s 271(1) (c). • May it please Your Honour, • The sole issue in respect of the captioned appeal is the levy of penalty u/s 271(1) (c) consequent to the surrender/disclosure of a sum of Rs.5 Lacs received from M/s. XYZ Pvt. Ltd. on account of sale of shares of..l Mills Ltd. by the appellant company to them. The said shares were acquired by the appellant during the course of business and the payment for their acquisition was through account payee cheques.

  10. During the course of assessment proceedings the appellant was asked to establish the veracity of the said transaction by satisfying the tests of Section 68 in respect of the credits from M/s. XYZ. Since the transaction was one of the numerous transactions entered into by the appellant company and more than seven years had elapsed since the said transaction, the appellant, apprehending that it may not be able to produce the parties, in its wisdom, decided to offer to tax the amount of Rs. 5 Lacs received from the said parties. The said disclosure was made merely to buy peace and also to avoid protracted litigation that would ensue if the appellant was called upon to produce the said parties. The appellant so stated and was also of the bonafide belief that on making the said declaration no penalty proceedings would be initiated. However penalty was initiated and levied on the appellant u/s 271(1)(c ) of the Act.

  11. 3. The appellant had the required documents substantiating the impugned transaction with it and could have filed the same if the A.O. had indicated his intent to levy penalty for concealment despite the offer/surrender made at the very inception of the reassessment proceedings. Even during the penalty proceedings the appellant believed that no penalty would be levied considering that the offer to tax was bonafide and without any finding of the A.O. that the same was false. Besides, no enquiry had been made by the A.O. in the assessment proceedings and the surrender/disclosure was accepted without any question or discussion. • 4. The appellant humbly submits that there was sufficient cause for the inability of the appellant to furnish the evidence relating to the entire transactions of Rs. 5 Lacs, inasmuch as, it was of the bonafide belief that having offered the entire amount to tax it was not required to file any supporting documents. Besides, the Ld. A.O. did not seek any information after the disclosure, both during the assessment and the penalty proceedings and hence adequate opportunity was not provided.

  12. It is therefore prayed that the circumstances stated hereinabove fall within the parameters laid out in Rule 46A and the following additional evidence filed may kindly be admitted :- • Copy of PAN of XYZ Pvt. Ltd establishing • the identity. • Copy of acknowledgement of return and Balance Sheet • and Profit and Loss Account of XYZ Pvt. Ltd. • Copy of Affidavit of XYZ Pvt. Ltd confirming the entire transaction. • Copy of Resolution of M/s XYZ Pvt. Ltd. • Bank statement showing payment for purchase of shares. • It is submitted that the additional evidence sought to be admitted would clearly show that the appellant entered into a bonafide transaction of sale against which Account Payee Cheques were received and the shares had been purchased by the appellant through cheque as well. Needless to add that the admission of the said documents would only sub serve the interest of justice. • It is further submitted that as per the judgment of the Hon’ble Supreme Court in the case of Mst. Katji, 167 ITR 471 (SC) it was held that the appellate authorities ought to render substantial justice and should not be fettered be the rules of technical evidence. The admission of the additional evidence will clearly establish the bona fides of the appellant and will assist Your Honour in rendering substantial justice.

  13. ADMISSION OF ADDITIONAL GROUND OF APPEAL • LETTER IN WRITING GIVING REASONS WHY GROUND NOT TAKEN IN MEMO TO APPEAL. • STATE THE GROUND OF APPEAL. • GIVE CASE LAWS ON ADMISSION OF ADDITIONL GROUND AT ANY STAGE OF HEARING-NTPC v. CIT 229 ITR 383 (SC). • OPPORTUNITY TO THE AO TO GIVE HIS COMMENTS ON THE ADDITIONAL GROUND.

  14. GROUNDS OF APPEAL AND BRIEF FACTS • To be specific and brief. • Can give alternative ground without prejudice. • Facts need not be very elaborate but must fill up the column. • Should narrate that detailed submissions shall be filed at the time of hearing before Your Honours.

  15. WRITTEN SUBMISSIONS PREFERABLY BE FILED. • Start with “May it please Your Honour” or “Dear Sir” Submissions to be ground wise, must state briefly what AO states, counter facts point wise, give case law and explain how it applies to your issue, take copies of judgments reported in CTR, TTJ, SOT and others, give reference of PB folio. • ANSWER TO QUERY ONLY IF VERY SURE ON FACTS OR LAW.

  16. PAPER BOOK • PAPER BOOK CONTAINING PLEADINGS AND EVIDENCES PLACED BEFORE ASSESSING OFFICER, BE FILED. Describe every document well in the PB, number serially, advert attention of CITA to the relevant replies and documents, if PB large bind it spirally, attach all relevant documents filed before the AO on the issue along with written submissions on the subject. • PAST HISTORY-AN IMPORTANT EVIDENCE-BUT TO BE USED CAREFULLY AT THIS STAGE • DETAILS GIVEN IN PAST ASSESSMENT CAN BE MADE PART OF PAPER BOOK

  17. 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.

  18. POWERS OF CIT(A) • TO GRANT ADJOURNMENTS •  TO SEEK REMAND REPORT • TO CONDONE DELAY IN FILING OF • 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

  19. TO ADMIT ADDITIONAL GROUND AND DECIDE THE ADDITIONAL GROUND • TO ADMIT ADDITIONAL EVIDENCE • TO ENHANCE ASSESSMENT, PENALTY • TO STAY DEMAND • TO IMPOSE PENALTY IN SPECIFIED CIRCUMSTANCES • TO PASS THE APPEAL ORDER • TO RECTIFY APPARENT ERRORS IN THE ORDER

  20. NO POWER TO DISMISS IN DEFAULT • NO POWER TO SET ASIDE THE ORDER OR RESTORE ISSUE • NOT TO BE CONTROLLED BY BOARD’S DIRECTION • LIMITATION PERIOD TO BE OBSERVED FOR DISPOSAL OF APPEAL AS FAR AS POSSIBLE • NO POWER TO DISCOVER NEW SOURCE OF INCOME

More Related