Appeal Procedure Under Income Tax Act

APPEAL PROCEDURE
UNDER INCOME TAX ACT

R.Ravichandran
Why the process of appeal necessary?
Powers to make tax payers comply with their tax obligations

and to investigate those who do not
Tax authorities have discretion to make best judgement
assessment and to pass orders as they may think fit in the
circumstances of the case.
Exercise of such powers and discretion by tax authorities is
likely to generate tax payer grievances on ground either that
the tax authority
misunderstood the law or

incorrectly inferred facts or
misapplied the law to the facts of the case
had not afforded a reasonable opportunity of hearing to the tax
payer may also be voiced.
Why the process of appeal necessary?
In case of obvious or prime facie mistakes, the tax

payer can approach the concerned authority for
rectification of the order. Such mistakes may be as
to facts as well as of law.
The tax payer can also approach the Commissioner
of Income-tax for revision of the orders of the
authority administratively subordinate to him where
he does not file appeal against this order.
In order that the tax payers have confidence in the
fair play, credibility and impartiality of the tax
administration, Direct Tax laws have provided for
independent appellate fora.
Right of Appeal
Statutory Right
Appeal against the order of Assessing officer lies
with the CIT(Appeal) under S.246A to S.251 of
the IT Act
Appeal against the order of the CIT(Appeal) lies

with the appellate tribunal
Only by the assessee
By assessee or IT Department
Appeal against the order of the Income tax

Appellate Tribunal (ITAT) lies with the High
Courts and thereafter the Supreme Court
Ravichandran/NADT/Appeal Procedures
Alternate modes of redressal of

grievances
In case of obvious or prime facie mistakes,

the tax payer can approach the concerned
authority for rectification of the order.
Such mistakes may be as to facts as well as
of law.
The tax payer can also approach the
Commissioner of Income-tax for revision of
the orders of the authority administratively
subordinate to him where he does not file
appeal against this order.
Hierarchy of appeals
Appellate authorities
First level CIT (Appeals)

Second level ITAT
Third level High Court
Fourth Level Supreme Court
Authority for advance ruling

DTAA grievances Joint Secretary (FTD)
Appeal under Income Tax Act,1961

Sections Covered
246A: CIT (Appeals)

254: ITAT ---Final Fact Finding Authority
260A: High Court ---On substantial Question of Law
261:SupremeCourt

Orders not appealable
Orders
Orders
Orders
Orders
passed U/s 234A, B, and C for levying Interest

passed U/s 264 rejecting Revision Petition
of AAR (Authority for Advance Ruling)
of Settlement Commission
Procedure of Appeal
Particulars
246A
254
260A
261
Appellate Authority
CIT (A)
30 days
Time limit for Appeal
from the
receipt of
the order
1 Year
Time limit for disposal from the

of Appeal
end of the
FY
ITAT
60 days from
the
communicat
ion of the
Order
High Court
35
from the
90 days from
communicat the date of

ion of the
Order of
order of
High Court
ITAT
4 Year from
As per
the end of
Court
the FY
procedure
36
Court
120 days
As per
Application Form
Supreme
Court
procedure
As per Court
procedure
As per Court
procedure
Stamps to be
affixed
Fees to be Paid
Returned Income
upto Rs1 Lac
More than 1 lac
upto Rs 2 Lac
0.50P
Rs 250
Rs 500
0.50P
Rs 500
Rs 1500
1 % of
More than 2 lac
Rs 1000
income
Max Rs
(10,000)
Appeal for other

than Income
Rs 250
Rs 500
As per
As per
Court
Court
procedure
procedure
As per
As per
Court
Court
procedure
As per
procedure
As per
Court
Court
procedure
procedure
As per
As per
Court
Court
procedure
procedure
As per
As per
Court
Court
procedure
procedure
Possible
Stay of Demand
Not Possible against order
Possible
Possible
of CIT(A)
Final order
No power to should be
Recovery of Tax
stay the
passed within
recovery of
180 days from
Tax
the stay order

so passed
If Return is
Filled: Tax
due on
Returned
Minimum Tax to be paid
Income
for filling appeal
If Return
not Filled:
At least the
Advance tax
payable
Rs 2,00,000/- Rs 4,00,000/- Rs 10,00,000/+ Question of

Law
+ Question of
+ Question of
Law
Law
SECTION 246A- APPEAL TO

COMMISSIONER (APPEALS)
Appealable orders
Orders against the Assessee

Where the assessee denies his liability to be
assessed under IT Act

assessed under Assessment Order U/s 143 (3), 144
Where the assessee objects to the
income assessed
amount of tax determined
amount of loss computed
status under which he is assessed

Order of Assessment / Re-assessment U/s

147,153A
Orders made U/s 154,155
enhancing the assessment

reducing a refund
refusing to allow a claim
Orders made U/s 163 ---treating Assessee as

an agent of NR
Orders made U/s 170 (2) / (3)
on succession of Business or Profession

Orders made U/s 171-----refusing Partition of HUF

Orders made U/s 201----levying interest for delay
in remitting TDS / TCS
Orders made U/s 206C (6A)---levying penalty for
failure to collect or delay in remitting TDS /TCS
Order made U/s 237----Refund
Order imposing penalty U/s 221, 271, 271A,
271AAA, 271F, 271FB, 271B, 271BB, 271C,
271CA, 271D, 271E, 272A, 272AA, 272BB,
158BFA, Chapter XXI

COMMISSIONER (APPEALS).
Order imposing / enhancing penalty U/s 275

(1A)
Order made U/s 158BC ( c) for search
initiated U/s 132 or requisition of books U/s
132A
Orders made U/s 115VP
Orders made U/s 115WE/ WF for value of
Fringe Benefits
Orders made U/s 115 WG for re-assessment
of FBT
Powers of CIT (A)
To Condone the Delay as regards limitation

of time limit for filling Appeal beyond 30
days
if he is satisfied that the appellant or the

Assessee has sufficient reason to file the
appeal after the due date.
To inquire into the matters as he thinks fit,

before disposing the Appeal.
To direct the Assessing officer to make such
inquiry and report the same, as he thinks fit.
Powers of CIT (A).
Canconfirm, reduce, enhance or

annulthe assessment -----if the Appeal
is against the Order of Assessment.
Canconfirm, cancel, and varythe
Order -----if the Order is against the
Order of Penalty.(can not set aside)
Pass such Order as he thinks fit.
ITAT
SECTION 253: APPEAL TO INCOME TAX

APPELLATE TRIBUNAL (ITAT)
Appealable orders
Orders Passed by COMMISSIONER

(APPEALS)
Orders
passed U/s 115 VZC refusing

applicability of tonnage tax Scheme.
Orders passed U/s 154
Orders passed u/s 250
Orders passed u/s 271, 271A, 272A
SECTION 253: APPEAL TO INCOME TAX

APPELLATE TRIBUNAL
Orders passed by Commissioner

Orders
passed U/s 12 AA refusing registration of a

Trust as religious or charitable or Cancellation of
registration of a Trust.
Orders passed U/s 80G (5) (vi) refusing to register a
Trust U/s 80G
Orders passed U/s 263, 271, 272 A
Order passed U/s 154 amending order U/s 263
Order passed U/s 154 amending order passed U/s

272Aoriginally passed by Chief Commissioner,
DG or Director
Powers of ITAT
To Condon the Delay as regards limitation of

time limit for filling Appeal beyond 120 days
if he is satisfied that the appellant or the

Assessee has sufficient reason to file the
appeal after the due date
To accept additional evidence Under Rule

46A.
To make necessary inquiry, wherever
necessary
To rectify the mistake apparent from record
Powers of ITAT.
Rectify( can not REVIEW )its own order at any time

---within 4 years from the date of the Order---with a
view to rectify any mistake apparent from record. (if
any order is prejudicial to the interest of the Assessee
then shall give opportunity of being heard).
ITAT is the final fact finding authority i.e, on a question
of fact, the Order of ITAT are final and no appeal
against the said order can be filed at Supreme Court
On a question of Law the Order of ITAT is final until
appeal is not filed at Supreme Court against the said
Order
APPEAL AGAINST ITAT
On a question of Fact
A WRIT PETITION can be filed to the

Supreme Court, challenging the fact finding
process adopted by ITAT.
If the Supreme Court is satisfied that the
Fact Finding process is not proper, then the
Order of ITAT shall be quashed and a
direction shall be issued by the Supreme
Court to the ITAT to do the Fact Finding in a
proper manner and /or as per the direction
Appeal against ITAT.
If the WRIT PETITION filed by assessee is

dismissed by SUPREME COURT
The assessee can file a SPECIAL LEAVE

PETITION to the SUPREME COURT challenging
the Fact Finding process of ITAT.
If the Supreme Court is satisfied that the Fact
Finding process is not proper, then the Order
of ITAT shall be quashed and a direction shall
be issued by the Supreme Court to the ITAT to
do the Fact Finding in a proper manner and /or
as per the direction
Procedure
Procedure for filing of appeals before

CIT(A) &ITAT
The Income-tax Rules, 1962 provides that an

appeal to the Commissioner (Appeals) shall be
made in Form No. 35
Form of verification shall be signed and
verified by the person who is authorized to
sign the return of income under section 140 of
the Income-tax Act, 1961 (the Act) (Rule 45) .
Income-tax (Appellate Tribunal ) Rules, 1963
specifies as to the contents of the
memorandum of appeal.
Procedure for filing of appeals before CIT(A)

&ITAT
Rule 8 mandates that every

memorandum of appeal shall be written
in English and shall set forth, concisely
and under distinct heads the grounds of
appeal without any argument or
narrative and such grounds shall be
numbered consecutively.
Rule 47 of the Rules prescribes Form No.
36 for an appeal to the Income-tax
Appellate Tribunal and Form No. 36A for
Ravichandran/NADT/Appeal
filing memorandum
ofProcedures
cross-objections

CIT(A) &ITAT..
Both the memorandum of appeal and

memorandum of cross-objections are to be
verified by the person specified in Rule 45
Form No. 35 requires to set out a statement

of facts along with the ground of appeal
No statement of fact is required to be filed

with the memorandum of appeal to be filed
with the Tribunal

CIT(A) &ITAT..
Annexure to the memorandum of appeal to be

filed before the Tribunal should include Form
No. 35 in which statement of facts are narrated.
Statement of facts should be in such a manner
so as to clearly bring out the issues in the
assessment/penalty proceedings leading to the
order under challenge.
Rule 22 of the Tribunal Rules provides that
memorandum of cross-objection shall be
numbered as an appeal and all the rules so far
as may be, shall apply to such appeal.
Draft of grounds of appeal
"On the facts and in the circumstances of the case and in

law the Assessing Officer (or the Commissioner of
Incometax (Appeals) where an appeal is filed before the
Tribunal against the order of Commissioner (Appeals))
erred in .without appreciating ".
A prayer should be made for deletion or
addition/disallowance after taking relevant ground as
under :
"The Appellant prays that the addition/ disallowance of
Rs. _________ made in respect of/out of . be
deleted."
Draft of grounds of appeal
And at the end the Appellant should

crave leave for variation or withdrawal of
grounds of appeal as under:
"The Appellant craves leave to add,
amend , alter vary and / or withdraw any
or all the above grounds of Appeal."
If the statement of facts /grounds of
appeal are separately annexed then the
same should be signed by the Appellant.
Detailed process
Appeal to the Commissioner (Appeals) is to be filed

in Form No. 35 and to the Tribunal in Form No. 36.
Cross-objections are to be filed in Form No. 36A.
As per notes to the Form No. 35 the memorandum
of appeal, statement of facts and the grounds of
appeal must be in duplicate and should be
accompanied by a copy of the order appealed
against and the notice of demand in original, if any.
The memorandum of appeal should be
accompanied by the prescribed fee.
Detailed Process
Where the appeal is filed against an order imposing

penalty under section 271(1)(c) of the Act , a copy of
assessment order must also be attached.
Rule 9 of the Tribunal Rules provides that every
memorandum of appeal to be filed before the
Tribunal shall be in triplicate and shall be
accompanied by two copies (at least one of which is
a certified copy) of the order appealed against, two
copies of the order of the assessing officer, two
copies of the grounds of appeal, before the first
Appellate authority and two copies of statement of
facts, if any, filed before the said Appellate Authority.
Detailed process
In a case of appeal against the order of penalty,

the memorandum of appeal shall also be
accompanied by two copies of the assessment
order.
Where an assessment order is passed under
section 143(3) rws 144B or under section 143(3)
rws 144A or under section 143(3) rws 147, the
memorandum of appeal shall also be accompanied
by the two copies of the draft assessment order
under section 144B or directions under section
144A or the original assessment order as the case
may be.
Detailed Process
The memorandum of appeal before the Tribunal

shall also be accompanied by the prescribed fees.
Four identical sets consisting of memorandum of
appeal in Form No. 36, order of Commissioner
(Appeals), Form No. 35 with annexures and the
assessment/penalty order from which the appeal
arises are generally prepared
Explanation to Rule 9 clarifies that "certified copy "
will include the copy which was originally supplied
to the assessee as well as photostat copy thereof
duly authenticated by the assessee or his
authorised representative as a true copy.
Beware
The Supreme Court in CIT vs. Calcutta

Discount Co. Ltd., (1973) 91 ITR 8 (SC)
observed that in considering an appeal
the Appellate Authority should deal with
the substance of the matter at issue and
not be unduly influenced by mere
procedural technicalities, for example,
whether the memo of appeal was or was
not in proper form etc.
Appeal Fees
Fee must be paid for admitting the appeal

The Hyderabad Bench of the Tribunal in
Andhra Pradesh State Electricity Board vs.
ITO (1994) 49 ITD 552 (Hyd) have held that
even where total income is computed at a
loss and such loss exceeds Rs.1 lakh, the
fees payable would be as per the slab
prescribed for the income more than Rs. 1
lakh and therefore fees are to be determined
on the basis as if loss determined is income.
Appeal fees
The Mumbai Bench of the Tribunal in Chiranjilal S.

Goenka vs. WTO (2000) 66 TTJ (Mum) 728 have held
that the stay application for more than one year or for
more than one order for the same assessment year
can be made on payment of fees of Rs. 500/- only.
The Mumbai Bench of Tribunal in Amruta Enterprises
vs. Dy. CIT (2003) 84 ITD 172 (Mum) have held that
the quantum of penalty under section 271(1)(c)
cannot be linked with the assessed income and
therefore the fees payable is as per the provisions of
section 253 (6)(d). Also, in Narendra Valji Shah vs.
ACIT (ITA/3545/M/99 dated 24-5-2000).
Appeal Fees
In Mrs. Nimu R. Thodani vs. Jt. CIT

(ITA/5437/M/97 dated 1-2-2000) the Tribunal
held that in cases filed with respect to interest
under sections 234A, 234B, 234C or any other
interest appeal fee would be Rs. 500/- as per
section 253(6)(d) because interest is in no way
related to the assessed income but is linked
with tax payable.
The ratio of the above decisions will also
apply to the appeals to be filed before
Commissioner (Appeals).
Appeal fees
The Tribunal (Mumbai Bench C) held that

the levy of penalty u/s. 271B is not in any
way related to the total income and hence
fees would be Rs. 500/- as contemplated
in section 253(6)(d). A similar view was
taken in Chromatte India Ltd. vs. ITO
(ITA/3486-87/M/02 dated 12-2-2002)
where the Tribunal held that in an appeal
against an order u/s 263 the fees are to be
paid as per section 253(6)(d).
Signing of appeal
the form of appeal is to be signed and

verified by the person who is authorised to
sign the return of income under section 140
of the Act.
As such the appeal to be filed by an
individual must be signed and verified
(i) by the individual himself,

(ii) where he is absent from India, by the
individual himself or by some person duly
authorised by him in this behalf (a valid Power of
Attorney should be attached with the appeal)
Signing of Appeal
(iii) where he is mentally incapacitated from

attending to his affairs, by his guardian or
any other person competent to act on his
behalf.,
where, for any other reason, it is not
possible for the individual to sign the
appeal, by any person duly authorised by
him in this behalf (a valid Power of Attorney
should be attached with the appeal).
Therefore, unless any of such exceptional
circumstances be present, an appeal in
order to
be valid, has Procedures
to be signed by the
Ravichandran/NADT/Appeal
Signing of appeal..
In case of the Hindu undivided family, the appeal is to

be signed by the Karta and where the Karta is absent
from India or he is mentally incapacitiated from
attending to his affairs, the appeal is to be signed and
verified by any other adult member of such family. If
the Hindu undivided family has no major member as
Karta, appeal may be validly signed by any male
adult member of the family who is in receipt of the
income.
In the case of Shridhar Uday Narayan vs. CIT (1962)
45 ITR 577(All)]. "Adult "is a person who has attained
the age of discretion which in India is 16 years. A
person attains majority at the age of 18 years.
Signing of appeal
In a case of a company an appeal is to be signed and

verified by the Managing Director thereof or where for
any unavoidable reason, such Managing Director is not
able to sign, by any Directors thereof or where there is
no Managing Director by any Director thereof.
The Calcutta High Court in National Insurance Co. Ltd vs.
CIT (1995) 213 ITR 862 (Cal) held that the return signed
by a Director and not by the Managing Director was
invalid in absence of any explanation.
A company which is being wound up or for whose assets
any person has been appointed as a receiver, the appeal
is to be signed and verified by the liquidator referred to
in section 178(1).
Signing of Appeal.
In case of a firm the appeal is to be signed by the

Managing Partner thereof or where for any unavoidable
reason, such Managing Partner is not able to sign, by any
partner thereof not being a minor or where there is no
Managing Partner as such, by any partner thereof not
being a minor.
In other cases, it is the principal officer who has to sign
the appeal. The Bombay Bench of the Tribunal in Mrs.
Leezo Salidan vs. CIT 16 TTJ 243 (Bom) , Pyrkashim
Stores vs. CIT 9 ITD 93(Bom) and Hariledge vs. ITO 29
Taxman 122 (Bom) as also the Gujarat High Court in
Rajendrakumar Maneklal Sheth( HUF) vs. CIT (1995) 213
ITR 715 (Guj) have held that the appeal signed by an
advocate / Chartered Accountant is valid.
Signing of appeal
The Madras High Court in Arunachalam Chettiar vs. CIT

(1962) 45 ITR 407 (Mad) and Andhra Pradesh High Court in
Chelamala Setti Adeyya vs. CGT (1964) 54 ITR 339 (AP) held
that failure to attach notice of demand to memorandum of
appeal is mere irregularity which can be subsequently
rectified.
The above view was held by Gyan Manjari Kuari vs. CIT
(1944) 12 ITR 59 (Pat); Ag IT v. Keshab Chandra Madanlal
(1950) 18 ITR 569, 573(SC)].
The Bombay High Court in Malani Trading Co. vs. CIT (2001)
252 ITR 670 (Bom) have held that merely because there is
defect in the memo of appeal, dismissal of appeal without
giving opportunity to cure said defect will be improper.
Presentation of Appeal
Where revenue filed appeal without including

therein grounds of appeal and statement of
facts as required and Tribunal did not issue
defect memo, the Gauhati Bench of the
Tribunal in Asst. CIT vs. Rayang Timber
Products (P) Ltd. (2002) 82 ITD 73 (Gau)(TM)
held that appeal was to be deemed to have
been accepted and it had to be further
presumed that Tribunal had already exercised
its discretion under sub-rule (3) of rule 9 of
ITAT rules in favour of appellant
Presentation of appeal
A memorandum of appeal to the Commissioner (Appeals)

must be presented to the office of the Commissioner in
person or by an agent or sent by Registered Post addressed
to the Office of the Commissioner (Appeals).
A memorandum of appeal to the Tribunal must be presented
by the Appellant in person or by an agent to the Registrar at
the Head Quarters of the Tribunal at Bombay or to an Officer
authorised in this behalf by the Registrar or sent by
Registered Post addressed to the Registrar or to such officer.
Vide order No. 1 of 1973 dated 1.10.1973, the Registrar of the
Tribunal has authorised Asst. Registrars of the Appellate
Tribunal situated at different places to be the authorised
Officer to receive the appeals or applications as per Rule 7 of
the Tribunal Rules.
Presentation of appeal
In the case the applicant apprehends that it is last day

of the limitation for presentation of his appeal and
application, he may present it to the Assistant Registrar
at his residence or any other place wherever he may be
or to Member of the Tribunal at his residence or
wherever he may be.
If an appeal is send by post it shall be deemed to have
been presented on that day on which it is received by
the office of the Commissioner (Appeals) or the Tribunal
(pl.see Rule 6(2) of the Tribunal Rules and F.N.Roy vs.
Collector of Customs AIR 1957 (SC) 648 postal
authorities are not considered as a agents of the
addressee but are the agents of the sender).
Decisions on Time limit
An appeal to the Commissioner (Appeals) should be

filed within a period of 30 days of the service of the
order against which the appeal is preferred.
The Calcutta High Court in Charki Mica Mining Co. Ltd.
vs. CIT (1978) 111 ITR 193 (Cal) has held that the
period of limitation for filing an appeal to the
Commissioner (Appeals) is to be computed from the
date of the receipt of demand by the assessee and not
from the date of receipt of assessment order by the
assessee.
An appeal to the Tribunal should be filed within a period
of 60 days from the date on which the order sought to
be appealed against is communicated.
Where the assessment order was served on the person

who was not an authorised agent of the assessee, and
later on, the assessee applied for and obtained a copy
of the assessment order for purpose of filing an appeal,
it was held that the time limit for filing the appeal
should be reckoned from the date on which the
assessee obtained the copy of the assessment order
and notice of demand and not from the earlier date of
service of the assessment order CIT vs. Prem Kumar
Rastogi (1980) 124 ITR 381 (All). Also see, Jayalakshmi
Cloth Stores vs ITO (1981) 132 ITR 764 (AP), Rasipuram
vs. CIT (1956) 30 ITR 687 (Mad) and Malayalam
Plantations Ltd vs. CIT (1959) 36 ITR 205 (Ker).
Where postal acknowledgment in file of

Assessing Officer did not bear signature of
any person and so also it did not bear any
date of service, it was reasonable to believe
that the assessee was not served with the
order of assessment and the demand notice
and in such case appeal filed by the assessee
on 10-8-1980 against the order of assessment
for the assessment year 1981-82 could not be
said to be barred by limitation. (Badri Singh
Thakur vs. ITO (1995) 78 Taxman 206(Jab).
Delay in filing the appeal
Section 249 (3) gives a power to the Commissioner

(Appeals) to condone the delay in filing the appeal to the
Commissioner (Appeals).
Section 253(5) empowers the Tribunal to admit an appeal or
permit the filing of memorandum of cross-objection after
the expiry of the relevant period if it is satisfied that there
was sufficient cause for not presenting it within that period.
When an application for condonation of delay in filing an
appeal is preferred, it is statutory obligation of the appellate
authority to consider whether sufficient cause for not
presenting the appeal in time was shown by the appellant
Shrimant Govindrao Narayanrao Ghorpade vs. CIT (1963)
48 ITR 54(Bom).
An assessee has a statutory right to present an appeal

within prescribed period without any order being
required from the Appellate Authority for admission of
the appeal.
After the expiry of the prescribed period, an appeal can
be entertained only if it is admitted by the appellate
authority after condoning the delay [CIT vs. Mysore
Iron & Steel Ltd. (1949) 17 ITR 478, 480 (Bom)].
The power to condone the delay is discretionary and
the discretion must be judicially exercised. (J & K Small
Scale Industries Development Corpn Ltd., v. Dy. CIT
(1949) 71 ITD 367 (Asr).
The Supreme Court in Collector of Land Acquisition vs. Mrs.

Katiji & Others (1987)167 ITR 471(SC), held that Court should
have pragmatic and liberal approach. [Also see Raja
Jagadambika Pratap Narain Singh vs. CBDT 100 ITR 698 (SC)]
The Supreme Court in N. Balkrishnan vs. M. Krishnamurthy
(1998) 7 SCC 123 had condoned a delay of 833 days. It was
observed that condonation of delay is a matter of discretion of
the Court and the only criterion is the acceptability of
explanation irrespective of the length of delay.
A subsequent decision of the Supreme Court/High Court was
considered as sufficient cause for condoning delay in filing the
appeal. (State of Andhra Pradesh vs. Venkataramana Chudava
& Muramura Merchant (1986) 159 ITR 59 (AP).
The Courts have also held that the mistake of an Advocate

or Chartered Accountant is a reasonable cause for delay in
filing an appeal. (pl. see Rafiq C. Munshilal AIR 1981 SC
1400 (1401), Mahavir Prasad Jain vs. CIT (1988) 172 ITR
331 (MP), Concord of India Insurance Co. Ltd. vs. Smt.
Nirmaladevi & Sons (1979) 118 ITR 507 (SC). Punam Singh
vs. ITO (2002) 257 ITR 38 (Chennai) ( Trib). Shakti Clearing
Agency P. Ltd. vs. ITO (127 Taxman 49 (Mag) (Raj.).
Revenues petition for condonation of delay was dismissed
in Asst. CIT vs. Taggas Industries Development Ltd. (2002)
80 ITD 21 (Cal); Asst. CIT vs. Punna Textiles Industries P.
Ltd., (2002) 122 Taxman 264 (Cal) (Mag), Asst. CIT vs.
Mahadeo Agarwalla (2002) 125 Taxman 229 (Cal) (Mad).
Payment of admitted tax
Section 249 (4) provides that no appeal shall be entertained

under chapter XX unless at the time of filing the appeal the
assessee has paid
(a) the taxes due on the returned income or
(b) where no return is filed, an amount equal to the amount of
advance tax which was payable by him.
The Commissioner (Appeals) is empowered, for any good and
sufficient reason, to exempt the assessee from operation of this
provision in case of (b).
Prior to amendment from 1-4-1989 the Commissioner (Appeals)
had power to exercise his power to exempt in case (a) also.
Order refusing to exercise such discretion is an appealable order
CIT vs. Smt. Nanhibai Jaiswal (1988) 171 ITR 646 (M.P.).
Filing of appeal before Tribunal also falls

under chapter XX , hence provisions of
section 249(4) are applicable to an appeal
filed before the Tribunal. (V. Baskaran vs.
Asst. CIT (1998) 62 TTJ (Chennai) 698).
The Indore Bench of the Tribunal in Pawan
Kumar Lodha vs. ACIT (2003) 78 TTJ (Ind)
983 held that prepayment of tax does not
apply to appeal filed before the Tribunal.
It does not apply to appeals filed to the

Tribunal from assessment framed under
Chapter XIV B. [V.S.N. Sudhakaran vs. Asst. CIT
(2002) 83 ITD 159 (Chennai); Anil Sanghi vs.
ACIT (85 ITD 73 (Del) (SB)].
The Madras High Court in CIT vs. Smt. G.A.
Somanth Kamani (2002) 125 Taxman 424
(Mad) held that section 249 (4) cannot be read
down so as to restrict it to appeal against
assessment only it will be applicable in case of
appeal against penalty also.
Maintainability of appeals
Appeal is not maintainable
where tax is not deducted at source from payment made to

non-resident and is not paid to the Govt. prior to filing of
appeal (ITO vs. Tata Iron & Steel Co. Ltd. (2001) 71 TTJ (Cal)
323.
Crucial date for deciding the applicability of amended
provisions to section 249(4) was the date of issue of notice
under section 143(2) and not date of filing return. (Satyendra
Pal Chaudhary vs. Asst. CIT (2002) 74 TTJ (Mum) 741) .
Where despite adjustment of seized amount full amount of
tax due from assessee was not paid before filing appeal,
assessees appeal was not maintainable (Bharatkumar
Sekhsaria vs. Dy. CIT (2002) 82 ITD 512 (Mum) ( CIT vs. Smt.
G.A. Samonthakamani (2002) 125 Taxman 424 (Mad).)
In Shri Parasram G. Purohit vs. ACIT, ITA

No. 2689/Bom/93 Bench B Assessment
year 1989-90, the Honble Bombay
Tribunal, held that once the tax required
to be paid u/s. 249(4) has been paid
before the final date of hearing, it is
incumbent to consider the appeal having
been filed on the date of payment.
(Decision of Supreme Court in CIT vs.
Filmistan 42 ITR 163 referred to).
Where appellant was notified entity under the Special Court (Trial of
offences relating to Transactions in Securities) Act, 1992 and all
properties had been attached, in view of this fact that the Appellant
had requested the Assessing Officer to approach special Court to
release amount of self assessment tax payable and such request had
been made by Assessing Officer, assessee could be said to have made
implied compliance with the provisions of section 249(4). (Divine
Holdings (P) Ltd vs. Dy. CIT (2001) 119 Taxman 27 (Mum) (Mag) (Also
see, Ashwin S. Mehta (HUF) vs. Asst CIT (2002) 75 TTJ (Mum) 960).
Where assessee filed appeal on 2.4.1976 and 4.11.1997 was last date
on which AAC heard appeal by which time assessee had paid entire
tax due, the Delhi High Court in CIT vs. Rama Body Builders (2001)
250 ITR 825 (Del), AAC was not justified in refusing to entertain appeal
on the ground that tax due had not been paid by 2.4.1976, the date on
which the appeal was filed, [also see S. Venkatesh vs. Asst. CIT (2000)
112 Taxman 31 (Chennai) (Mag)].
Death of Assessee
Where an assessee to an appeal dies or is adjudicated

insolvent or in the case of the company wound up, the
appeal will not abate and will continue against the
executor, administrator or other legal representatives of
the assessee or by or against the assignee, receiver or
liquidator as the case may be.
In case of a death of assessee, the legal heirs of the
assessee must file copy of death certificate and an
affidavit of they being the legal heirs.
A fresh memorandum of appeal signed by the legal heirs
must be filed before the Commissioner (Appeals) or the
Tribunal as the case may be where the assessee is the
appellant so that the legal heirs are brought on record.
High Court
High Courts
The High Court stands at the head of a State's

judicial administration.
There are 18 High Courts in the country, three
having jurisdiction over more than one State.
Among the Union Territories Delhi alone has a
High Court of its own. Other six Union
Territories come under the jurisdiction of
different State High Courts.
.
Powers of HC
Each High Court has power to issue to any person

within its jurisdiction directions, orders, or writs
including writs which are in the nature of habeas
corpus, mandamus, prohibition, quo warranto and
certiorari for enforcement of Fundamental Rights
and for any other purpose.
This power may also be exercised by any High Court
exercising jurisdiction in relation to territories within
which the cause of action, wholly or in part, arises
for exercise of such power, notwithstanding that the
seat of such Government or authority or residence
of such person is not within those territories.
Powers of HC.
Each High Court has powers of

superintendence over all Courts within
its jurisdiction.
It can call for returns from such Courts,
make and issue general rules and
prescribe forms to regulate their practice
and proceedings and determine the
manner and form in which book entries
and accounts shall be kept.
Supreme Court
Supreme Court
Original, appellate and advisory jurisdiction.

exclusive original jurisdiction extends to any dispute between
the Government of India and one or more States or between
the Government of India and any State or States on one side
and one or more States on the other or between two or more
States, if and insofar as the dispute involves any question
(whether of law or of fact) on which the existence or extent
of a legal right depends.
Article 32 of the Constitution gives an extensive original
jurisdiction to the Supreme Court in regard to enforcement of
Fundamental Rights.
It is empowered to issue directions, orders or writs, including
writs in the nature of habeas corpus, mandamus, prohibition,
quo warranto and certiorari to enforce them.
Supreme Court
The Supreme Court has been conferred with power to direct

transfer of any civil or criminal case from one State High
Court to another State High Court or from a Court
subordinate to another State High Court.
The Supreme Court, if satisfied that cases involving the
same or substantially the same questions of law are pending
before it and one or more High Courts or before two or more
High Courts and that such questions are substantial
questions of general importance, may withdraw a case or
cases pending before the High Court or High Courts and
dispose of all such cases itself.
Under the Arbitration and Conciliation Act, 1996,
International Commercial Arbitration can also be initiated in
the Supreme Court.
Powers of Supreme Court
Appellate jurisdiction of the Supreme Court can be

invoked by a certificate granted by the High Court
concerned under Article 132(1), 133(1) or 134 of the
Constitution in respect of any judgement, decree or
final order of a High Court in both civil and criminal
cases, involving substantial questions of law as to the
interpretation of the Constitution.
Appeals also lie to the Supreme Court in civil matters if
the High Court concerned certifies :
(a) that the case involves a substantial question of law of

general importance, and
(b) that, in the opinion of the High Court, the said question
needs to be decided by the Supreme Court.
Powers of Supreme Court.
In criminal cases, an appeal lies to the Supreme Court if

the High Court
(a) has on appeal reversed an order of acquittal of an accused

person and sentenced him to death or to imprisonment for life
or for a period of not less than 10 years, or
(b) has withdrawn for trial before itself any case from any
Court subordinate to its authority and has in such trial
convicted the accused and sentenced him to death or to
imprisonment for life or for a period of not less than 10 years,
or
(c) certified that the case is a fit one for appeal to the Supreme
Court. Parliament is authorised to confer on the Supreme Court
any further powers to entertain and hear appeals from any
judgement, final order or sentence in a criminal proceeding of a
High Court.
Powers of Supreme Court.
Appellate jurisdiction over all Courts and

Tribunals in India in as much as it may, in its
discretion, grant special leave to appeal under
Article 136 of the Constitution from any
judgment, decree, determination, sentence or
order in any cause or matter passed or made
by any Court or Tribunal in the territory of India.
Special advisory jurisdiction in matters which
may specifically be referred to it by the
President of India under Article 143 of the
Constitution.
Reference to SC
There are provisions for reference or

appeal to this Court under Article 317(1)
of the Constitution,
Section 257 of the Income Tax Act, 1961,
Section 7(2) of the Monopolies and
Restrictive Trade Practices Act, 1969,
Section 130-A of the Customs Act, 1962,
Section 35-H of the Central Excises and
Salt Act, 1944 and Section 82C of the
Gold (Control) Act, 1968.
Appeals to SC
Appeals also lie to the Supreme Court under the
Representation of the People Act, 1951

Monopolies and Restrictive Trade Practices Act, 1969
Advocates Act, 1961
Contempt of Courts Act, 1971
Customs Act, 1962
Central Excises and Salt Act, 1944
Enlargement of Criminal Appellate Jurisdiction Act, 1970
Trial of Offences Relating to Transactions in Securities
Act, 1992, Terrorist and Disruptive Activities (Prevention)
Act, 1987
Consumer Protection Act, 1986
Enabling provision in IT act
(i) Section 257 of Income-tax Act, provides that the

Income-tax Appellate Tribunal can, through its
President, refer to the Supreme Court, any question of
law on which there is difference of opinion between
different High Courts and the question requires to be
resolved by the Supreme Court.
Section 261 of Income-tax Act provides for an appeal to
the Supreme Court from any judgment of the High Court
(delivered on a reference made under Section 256
against an order made under section 254 before 1st
October, 1998 or on appeal made to the High Court in
respect of an order passed under section 254 on or after
that date), in any case which the High Court certifies to
be a fit one for appeal to the Supreme Court.
JURISDICTION AND SEAT OF HIGH COURTS

Name
Year
Territorial establishment
jurisdiction
Seat
Allahabad
1866
Uttar Pradesh
Allahabad (Bench at Lucknow)
Andhra Pradesh
1956
Andhra Pradesh
Hyderabad
Maharashtra, Goa, Dadra and Bombay (Benches at Nagpur, Panaji and

Nagar Haveli and Daman and Diu
Aurangabad)
Bombay
1862
Calcutta
1862
West Bengal
Calcutta (Circuit Bench at Port Blair)
Delhi
1966
Delhi
Delhi
Guwahati(2)
1948
Gujarat
1960
Assam, Manipur, Meghalaya, Guwahati (Benches at Kohima, Aizwal &

Nagaland,Tripura, Mizoram and
Imphal. Circuit Bench at Agartala &
Arunachal Pradesh
Shillong)
Gujarat
Ahmedabad
Himachal Pradesh
1971
Himachal Pradesh
Shimla
Jammu & Kashmir
1928
Jammu & Kashmir
Srinagar & Jammu
Karnataka(3)
1884
Karnataka
Bangalore
Kerala
1958
Kerala & Lakshadweep
Ernakulam
Madhya Pradesh
1956
Madhya Pradesh
Jabalpur (Benches at Gwalior and

Indore)
Madras
1862
Tamil Nadu & Pondicherry
Madras
Orissa
1948
Orissa
Cuttack
Patna
1916
Bihar
Patna (Bench at Ranchi)
Punjab & Haryana(4)
1975
Punjab, Haryana &

Chandigarh
Chandigarh
Rajasthan
1949
Rajasthan
Jodhpur (Bench at Jaipur)
Sikkim
1975
Sikkim
Gangtok
National Tax Tribunals
Backlog in Indian courts
At the current speed, the lower courts, may take 124 years for
clearing 2,50,000 cases.
In the last seven years, the disposal rate has increased by 48 per
cent in the high courts and by 28 per cent in the subordinate
courts, but the pendency has increased.
The Chief Justices Conference has recommended increasing in the
working hours of high courts to clear the huge backlog of cases.
Most high courts work for 210 days in a year and it has been
recommended to increase it up to 215 or 220
Setting up 463 family courts, one in each district, to deal with
matrimonial cases
Setting up one CBI court in each state. There were about 13,000
cases under the Prevention of Corruption Act pending in various
high courts out of which 6,100 were CBI cases
Backlog.
Indian judiciary would take 320 years to

clear the backlog of 31.28 million cases
pending in various courts including High
courts in the country
"If one considers the total pendency of
cases in the Indian judicial system, every
judge in the country will have an
average load of about 2,147 cases,
Backlog
A recent study indicated that the

number of new cases has direct
relationship with increasing literacy rate
and awareness
Citing example of Kerala, a high literacy
state with awareness has 28 new cases
per 1000 population per annum have
been added, whereas, Bihar with
relatively low literacy rate the figure
stands at just three
Backlog
India has 14,576 judges as against the sanctioned

strength of 17,641 including 630 High Court Judges.
This works out to a ratio of 10.5 judges per million
population
The Apex court in 2002 had suggested 50 judges
per million population
If the norm of 50 judicial officers per million
becomes reality by 2030 when the country's
population would be 1.5 to 1.7 billion, the number
of judges would go upto 1.25 lakh dealing with 300
million case.
Article 32
Things had come to a pass in the Supreme Court of

India, when Justice E.S. Venkataramiah inP.N. Kumar v.
Municipal Corporation of Delhi, (1987) 4 SCC 609
relegated the writ petitioner under Article 32 to the
High Court, without deciding whether any fundamental
rights were violated or not, giving, among others, the
following reason: This Court has no time today even
to dispose of cases which have to be decided by it
alone and by no other authority. A large number of
cases are pending from 10 to 15 years. Even if no new
case is filed in this Court hereafter, with the present
strength of Judges it may take more than 15 years to
dispose of all the pending cases.
Workload of SC
Justice P.N. Bhagwati, inBihar Legal Support Authority

v. Chief Justice of India and Anr., (1986) 4 SCC 767 had
this to say: The Supreme Court of India was never
intended to be a regular court of appeal against orders
made by the High Court or the sessions court of the
magistrates. It was created for the purpose of laying
down the law for the entire country and the
extraordinary jurisdiction of granting special leave was
conferred upon it under Article 136 of the Constitution
so that it could interfere whenever it found that the law
was not correctly enunciated by the lower courts or
tribunals and it was necessary to pronounce the
correct law on the subject.
National Court of Appeals
The Constitution Bench had itself felt the need to set up a

National Court of Appeal and observed in the very same
judgment thus: We think that it would be desirable to set
up a National Court of Appeal which should be in a position
to entertain appeals by special leave from the decisions of
the high courts and tribunals in the country in civil, criminal,
revenue and labour cases and so far as the present apex
court is concerned, it should concern itself only with
entertaining cases involving questions of constitutional law
and public law.
Law Commission of India in its 229th Report (2009)
recommended the setting up of aCour de Cassationin each
of the four regions to act as a final court with regard to the
matters entrusted to it.
Distance to SC
Nick Robinson, a Yale Law School Research

Fellow, that 10 per cent of the cases filed in
the Supreme Court emanate from Delhi, 6.2
per cent from Punjab and Haryana, and 6.2
per cent from Uttarakhand, with only 1.1 per
cent and 2.4 per cent coming from large
States like Tamil Nadu and Karnataka.
This would imply that the distance of the
Supreme Court from the southern States
would, in fact, be an impediment to access to
the Supreme Court in Delhi.
Disposal by SC in India, USA &UK
Supreme Court disposes of about 50,000

cases a year
Falls short of the filings that year by about
3,000 to 4,000 cases
U.S. Supreme Court with nine judges
sittingen bancis able to dispose of only 80
to 100 cases a year
Erstwhile Judicial Committee of the House
of Lords was able to dispose of only about
180 cases a year
NTT
Passing of the Forty Second Amendment to the Constitution of India in 1976,

tribunals became key dramatis personae in the justice delivery system
For speedy disposal of cases, an array of tribunals were set up.
Administrative Tribunals, the Rent Control Tribunals and also Tax Tribunals.
Constitution of the National Tax Tribunals, through the passing of the National
Tax Tribunal Act, 2005 in pursuance of Article 323-B (1) (a).
Act provides a machinery for the adjudication by the National Tax Tribunal of
disputes with respect to levy, assessment, collection and enforcement of direct
taxes and also to provide for the adjudication by that Tribunal of disputes with
respect to the determination of the rates of duties of customs and central excise
on goods and the valuation of goods for the purposes of assessment of such
duties as well as in matters relating to levy of tax on service.
The Act is bound to raise constitutional issues of immense significance as to
validity of conferral of the power and functions of the Tribunal, the exercise of
such powers and functions, and the concept of judicial review under the
Constitution.
Thank You

Appeal Procedure Under Income Tax Act

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Appeal Procedure Under Income Tax Act

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APPEAL PROCEDURE

UNDER INCOME TAX ACT

Why the process of appeal necessary?

Powers to make tax payers comply with their tax obligations

misunderstood the law or

Why the process of appeal necessary?

In case of obvious or prime facie mistakes, the tax

Appeal against the order of the CIT(Appeal) lies

Only by the assessee

Appeal against the order of the Income tax

Alternate modes of redressal of

In case of obvious or prime facie mistakes,

First level CIT (Appeals)

Authority for advance ruling

Appeal under Income Tax Act,1961

246A: CIT (Appeals)

Orders not appealable

passed U/s 234A, B, and C for levying Interest

Time limit for Appeal

Time limit for disposal from the

communicat the date of

More than 2 lac

Appeal for other

Not Possible against order

180 days from

the stay order

for filling appeal

Rs 2,00,000/- Rs 4,00,000/- Rs 10,00,000/+ Question of

SECTION 246A- APPEAL TO

Orders against the Assessee

assessed under IT Act

Where the assessee objects to the

SECTION 246A- APPEAL TO

Order of Assessment / Re-assessment U/s

enhancing the assessment

Orders made U/s 163 ---treating Assessee as

on succession of Business or Profession

SECTION 246A- APPEAL TO

Orders made U/s 171-----refusing Partition of HUF

SECTION 246A- APPEAL TO

Order imposing / enhancing penalty U/s 275

Powers of CIT (A)

To Condone the Delay as regards limitation

if he is satisfied that the appellant or the

To inquire into the matters as he thinks fit,

Powers of CIT (A).

Canconfirm, reduce, enhance or

SECTION 253: APPEAL TO INCOME TAX

Orders Passed by COMMISSIONER

passed U/s 115 VZC refusing

SECTION 253: APPEAL TO INCOME TAX

Orders passed by Commissioner

passed U/s 12 AA refusing registration of a

Order passed U/s 154 amending order passed U/s

To Condon the Delay as regards limitation of

if he is satisfied that the appellant or the

To accept additional evidence Under Rule

Rectify( can not REVIEW )its own order at any time

APPEAL AGAINST ITAT

A WRIT PETITION can be filed to the

Appeal against ITAT.

If the WRIT PETITION filed by assessee is

The assessee can file a SPECIAL LEAVE