Appeals and Revision

Introduction

Appeal is a process by which a person (assessee or revenue) aggrieved by an order passed by the tax authority or judicial authority, as the case may be, can challenge it before the higher judicial authorities. The party challenging such an order is known as the appellant, and the other party is known as the respondent. The Commissioner or Principal Commissioner exercises the revisionary powers if an order is prejudicial to the interest of the revenue or assessee, as the case may be.

1. About

If an assessee is aggrieved by an order of the Assessing Officer, he can prefer an appeal against it with the Joint Commissioner (Appeals) or Commissioner (Appeals). An appeal against the order of the Joint Commissioner (Appeals) or Commissioner (Appeals) can be filed by the assessee or the Income-tax department to the Income-tax Appellate Tribunal (ITAT). The assessee or the Commissioner of Income-tax may prefer an appeal against the order of the ITAT to the High Court on any substantial question of law arising out of the order of the ITAT. Alternative to filing an appeal before the Joint Commissioner (Appeals) or Commissioner (Appeals), the assessee can:

(a) File an application for revision before the Commissioner; or

(b) Approach the Dispute Resolution Committee (DRC).

Further, where the order passed by the assessing officer is erroneous insofar as it is prejudicial to the interest of the revenue, the Commissioner can revise the order passed by the assessing officer that is prejudicial to the interest of revenue.

The provisions of appeals and revisions are contained in Chapter XVIII of the Income-tax Act, which can be further sub-divided into the following parts:

1.1. First Appellate Authority

Main article: Appeal before Joint Commissioner (Appeals)

Main article: First Appeal before Commissioner (Appeals)

(a) Appealable orders before the Joint Commissioner (Appeals) [Section 356];

(b) Appealable orders before the Commissioner (Appeals) [Section 357];

(c) Form for filing of appeal and limitation period [Section 358];

(d) Procedure to be followed in disposing of the appeals [Section 359]; and

(e) Powers of the Joint Commissioner (Appeals) and Commissioner (Appeals) [Section 360].

1.2. Appeals to Appellate Tribunal

Main article: Appeal before Income Tax Appellate Tribunal (ITAT)

(a) Constitution of Appellate Tribunal [Section 361];

(b) Appealable orders before the ITAT and limitation period [Section 362];

(c) Order and Powers of the Appellate Tribunal [Section 363]; and

(d) Procedure to be followed in disposing of the appeals [Section 364].

1.3. Appeals to the High Court

Main article: Appeal before High Court

(a) Filing of appeal to High Court [Section 365]; and

(b) Procedure to be followed in disposing of the appeals [Section 366].

1.4. Appeals to the Supreme Court

Main article: Appeal before Supreme Court

(a) Filing of appeal to the Supreme Court [Section 367]; and

(b) Procedure to be followed in disposing of the appeals [Section 368].

1.5. Revisionary Power

(a) Revision of order prejudicial to revenue [Section 377]; and

(b) Revision of other order [Section 378].

2. Other Provisions

2.1. Avoidance of repetitive appeals by the assessee

Main article: Avoiding repetitive appeals by assessee

Sometimes a question of law, pertaining to an earlier tax year pending in an appeal before the High Court or Supreme Court (‘earlier case’), is identical to a question of law arising in a subsequent tax year before the assessing officer or the appellate authority (‘later case’). In such a situation, to avoid duplicity, the assessee may furnish an online declaration in Form No. 117 that if the assessing officer or the appellate authority, as the case may be, agrees to apply in the later case the final decision taken on the question of law in the earlier case, then he shall not file an appeal against the question of law in the later case before any appellate authority or High Court or Supreme Court or in an SLP under Article 136 of the Constitution.

2.2. Avoidance of repetitive appeals by the revenue

Main article: Avoidance of repetitive appeals by revenue

If a question of law arises from the order of JCIT(A)/CIT(A)/Tribunal in the case of an assessee in the tax year (‘later case’) and there is another question of law that has arisen or is pending in the case of an assessee in another tax year or in the case of another assessee in any tax year (‘earlier case’), and both these questions are identical. Such a question in the earlier case, which is in favour of the assessee, is pending before the jurisdictional High Court or before the Supreme Court or as an SLP under Article 136, as the decision is challenged by the revenue.

In such a situation, the collegium may decide that both the questions are identical and inform the PCIT/CIT not to file an appeal before the Tribunal or the jurisdictional High Court on that question in a later case.

2.3. Monetary limit for filing of an appeal

Main article: Monetary limit for filing of appeal

To effectively reduce taxpayer grievances/litigation and help the Department focus on litigation involving complex legal issues and high tax effects, the CBDT has been empowered to prescribe monetary limits for filing appeals by the Income-tax authorities. In exercise of such power, the Board has prescribed that no appeals or Special Leave Petition shall be filed by the department unless the tax effect exceeds the specified monetary limits.

2.4. Payment of tax

Tax shall be payable by the assessee irrespective of the fact that an appeal has been filed before the Supreme Court or a reference has been made to the High Court or the Supreme Court.

2.5. Execution of the cost awarded by the Supreme Court

Where the Supreme Court has passed an order awarding any cost, the High Court may, on a petition for execution of such order, transmit the order to any court subordinate to it. 

2.6. Amendment of assessment on appeal

Where on an appeal before Joint Commissioner (Appeals) or Commissioner (Appeals) or Appellate Tribunal, assessment of a body of individual or an association of person has been changed or a new assessment has been ordered to be made, the Joint Commissioner (Appeals) or the Commissioner (Appeals) or Appellate Tribunal shall pass an order authorizing the assessing officer either to make such amendment or fresh assessment.

It is to be noted that the Joint Commissioner (Appeals) and the Commissioner (Appeals) cannot set aside the assessment and refer the case back to the Assessing Officer for making a fresh assessment. Thus, they can only authorise the assessing officer to amend the assessment order in accordance with the appeal order.

2.7. Summary

This article is general information and not tax advice. Provisions change. Confirm your position with a qualified professional before acting.