Appeals and Revisions

The party complaining is styled as the “Appellant” and the other party is known as “Respondent”.

Under the scheme of the Income Tax Act, an assessment is normally the first Stage determining the Taxable Income and The Tax, Interest or Sum Payable by an Assessee.

The Act provides for various remedies available to an assessee on completion of the assessment.

The primary remedies available to an assessee on completion of the assessment are:

: APPEALS

: REVISION

: RECTIFICATION

All these remedies work in different areas. However, strictly speaking the remedies are not alternative to each other but at times more than one remedial proceeding may be used as complimentary to each other so as to achieve the best result by applying optimum resources.

The procedures governing these remedial provisions are proposed to be discussed hereunde

APPELLATE HIERARCHY

APPEAL BEFORE THE COMMISSIONER OF INCOME-TAX(APPEALS)

An appeal before the Commissioner of income tax (Appeals) is an extremely useful remedy available to an assessee.

The commissioner of Income Tax (Appeals) is the first appellate authority under the scheme of the Act.

This forum helps in redressing the grievances that the assessee might have    against the assessment order passed in his case.

However, one should bear in mind that the right of appeal is not an inherent right but it is a statutory right created due to the provisions of the statute

The proceedings of appeal work strictly as per the statutory provisions made in this regard. Therefore, , it is essential to understand these provisions in greater detail and know exactly what are the powers, rights and duties of the CIT (A) as well as the assessee while dealing with the appeals.

Appealable Orders-Section 246A

Section 246A of the Act lists down the category of orders, which can be appealed against.  The List is an exhaustive list and not an inclusive list.

Accordingly, if any order does not find place in any of the clauses of section 246A, the same becomes a non appealable order and the assessee has to exercise certain other options to protect himself against such order.

Majority of the orders with which we deal in our day to day   life are appealable. However, it would be interesting to note the appealabilty or otherwise of few of the orders as under:

Appeal against the order under section 154 wherein interest under section 244A is reduced is maintainable.

APPEAL IN CASE OF AN AGREED ASSESSMENT

The issue whether an appeal can be preferred in the case of an agreed assessment is not free from doubt.

The Bombay High Court in the case of Rameshchandra & Co. vs. CIT (169-ITR-375) (Bom.) has held that when the additions are made on the basis of the assessee’s own admissions, the assessment can not be subjected to appeal. A similar view has been expressed by the Allahabad High Court in the case of sterling Machine Tools Vs CIT (123-ITR-181)(All.)

As against this, the Punjab and Haryana High Court in the case of Chhatmull Agarawal vs. CIT (115-ITR-694) (Punj) has held that an agreed assessment can be subjected to appeal. The statutory right of appeal can not be taken away from the assessee since he has consented to the additions/disallowances at the time of the assessment. Under the Act, there is no provision for withdrawal of the statutory right to appeal.

In view of the conflicting decisions, the maintainability or otherwise of an appeal in such a situation will largely depend on the facts of each case. It seems that it is difficult to contend that the appeal can be preferred in a case of admission made by the assessee due to the decision of the Bom, HC in the case of Rameshchandra & Co. However keeping in mind the statutory right of appeal, it seems that the appeal can not be denied in a case where the addition/disallowance are agreed by an assessee during assessment proceedings with a view to settle the matter and buy peace of mind.

Section- 248- Appeal by person denying liability to deduct tax u/s. 195

Section 248 of the act deals with appeal in a case where under an agreement or arrangement, tax deductible on any income, other than interest u/s. 195 is to be borne by the payer and such payer claims that no tax was required to be deducted on such income. In such a situation, the section provides that the payer shall first pay the tax deductible on such income. If the CIT (A) issues a declaration as aforesaid, then the tax deposited by him will be refunded to him.

Section 249(2)-Time Limit for filing appeal

As per section 249(2), an appeal shall be preferred within 30 days of the date of service of notice of demand in the case of an appeal against an assessment or penalty or of the intimation or any oeder sought to be appealed against. In the case of an appeal u/s. 248, the same shall be preferred within 30days of the payment of tax.

Where the assessment order was served on a person who was not an authorized agent of the assessee and later on the assessee applied for and obtained a copy of the assessment, it was held that time limit for filing the appeal should be reckoned from the date on which the assessee obtained the copy of assessment order and notice of demand and not from the earlier date of the service of the assessment order.

Section 249 (3)- Condonation of delay in filing appeal

Section 249(3) enables the CIT (A) to admit an appeal after the examination of the time limit of 30 days if he is satisfied that the appellant had sufficient cause for not presenting it within the time limit prescribed.

In case of an appeal filed beyond the period of 30 days, it is recommended that the same shall be accompanied by a petition for condonation of delay explaining the reasons for the delay.

In appropriate cases, it is also advisable to file an affidavit confirming the reasons for the delay. As far as possible an attempt shall be to explain the reasons for each and every day’s delay in filing the appeal.