Income Tax Appellate Tribunal (ITAT) – Second Appeal

The Income Tax Appellate Tribunal (ITAT) is the second appellate authority and a tax appeal to the ITAT can be filed by an aggrieved party i.e. either by the taxpayer/assessee and/or by the Assessing Officer (AO)/Commissioner of Income Tax, as against an appealable order, usually as passed in appeal by the Commissioner of Income Tax (Appeals).

MinusTax’ legal and taxation professionals via the e-medium (i.e. email, skype, whatsapp etc) provide the complete spectrum of services that include —

  • Expert legal assessment and analysis of the order/notice etc. to be appealed against
  • Professionally drafting and filing an income tax appeal before the relevant Appellate Authority
  • Legal representation before the relevant Appellate Authority (option)
  • Drafting and filing a Stay Application against a Demand Notice before AO/CIT(A) and other necessary Miscellaneous Applications before the relevant Appellate Authority
  • Strategic appeal advisory services
  • Drafting and filing a Writ Petition (where appropriate) and legal representation before the jurisdictional High Court (in its Writ jurisdiction)


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The ITAT is constituted by the Central Government of India and functions under the Ministry of Law & Justice. ITAT consists of two classes of members – Judicial Members and Accountant Members and has Benches across the country with demarcated territorial jurisdiction. The ITAT is the final fact finding quasi-judicial authority and can hear an appeal both on issues of fact finding by the lower income tax authorities including the CIT(Appeals) as well as questions of law or mixed questions of law and fact.

The Income Tax Act 1961 (the Act) also specifies the (appealable) orders against which an appeal can be filed before the ITAT. Some of the important orders appealable before the ITAT as well as important procedural steps and requirements are listed below.

Common and important appealable orders in case of appeal by the taxpayer/assessee —

  • Order passed by a Commissioner of Income Tax (Appeals) or CIT(Appeals) under section 154 (Rectification of Mistake)
  • Adjudicatory/appellate order passed in appeal by CIT (Appeals) under section 250
  • Penalty order for failure to furnish returns, comply with notices, concealment of income, etc. under section 271
  • Penalty order for failure to keep, maintain or retain books of account, documents, etc. under section 271A
  • Penalty order for failure to answer questions, sign statements, furnish information, returns or statements, allow inspections, etc.) of the Income Tax Act 1961 (the Act) under section 272A
  • Order passed by a Principal Commissioner or Commissioner under section 12AA (Application for Registration of a Charitable or Religious Trust or Institution)
  • Order passed under section 80G(5)(vi) (Deduction in respect of donations to certain funds, charitable institutions, etc.)
  • Revision of orders prejudicial to revenue under section 263 passed by Principal Commissioner or Commissioner of Income Tax (as the case may be)
  • Order passed under section 154 amending order under section 263
  • Order passed by the prescribed authority under section 10(23C)(vi) (i.e non-inclusion of income in total income of any university or other educational institution existing solely for educational purposes and not for purposes of profit)
  • Order passed by the prescribed authority under section 10(23C)(via) (i.e. non-inclusion of income in total income of any any hospital or other institution existing solely for philanthropic purposes and not for purposes of profit) etc.


Draft and file an Income Tax Appeal/Writ Petition

  • Click the “MinusTax Professionals” red banner below and fill-up/submit the pop-up form
  • Upload (if any) relevant documents (eg.CIT(A) Order)
  • Pay professional fees and charges (as quoted)
  • Receive (including via email) and file professionally drafted Appeal/Writ Petition
  • Legal representation by MinusTax Professionals before Appellate/Writ authority (optional)
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The Principal Commissioner or Commissioner of Income Tax (as the case may be) may, if he/she objects to any order passed by a Commissioner of Income Tax (Appeals) under section 154 (Rectification of Mistake) or section 250 (Adjudicatory/appellate order passed in appeal), direct the Assessing Officer (AO) to appeal to the Income Tax Appellate Tribunal (ITAT) against the said order.


Bar to Departmental appeal in certain cases due to low “Tax Effect”

By virtue of a Circular issued by the Central Board of Direct Taxes (CBDT), the Commissioner of Income Tax cannot direct the Assessing Officer (AO) to file a tax appeal to the ITAT against the order of the Commissioner of Income Tax (Appeals) or CIT(Appeals) in those cases in which the tax effect does not exceeds Rs. 10 lacs.

“Tax effect” means the difference between the tax on the total income as assessed and the tax that would have been chargeable had such total income been reduced by the amount of income in respect of which dispute has arisen and against which the appeal is intended to be filed (hereinafter referred to as “disputed Issues”), subject to the following

  • The tax will not include any interest thereon, except where chargeability of interest itself is in dispute;
  • In case the chargeability of interest is the issue under dispute, the amount of interest shall be the tax effect;
  • In cases where returned loss is reduced or assessed as income, the tax effect would include notional tax on disputed additions; and
  • In case of penalty orders, the tax effect will mean quantum of penalty deleted or reduced in the order to be appealed against.

Assessment year and Composite Order

Appeals can be filed by Commissioner of Income Tax only with reference to the tax effect in the relevant assessment year. However, in case of a composite order of any High Court or appellate authority, which involves more than one assessment year and common issues in more than one assessment year, appeal shall be filed in respect of all such assessment years even if the tax effect is less than the prescribed monetary limits in any of the year(s), if it is decided to file appeal in respect of the year(s) in which tax effect exceeds the monetary limit prescribed. Further, in case where a composite order/judgment involves more than one taxpayer, each taxpayer shall be dealt with separately.


Appeal on merit irrespective of Tax Effect

Adverse judgments relating to the following issues will still be contested on merits notwithstanding that the tax effect entailed is less than the monetary limits specified above or there is no tax effect

  • Where the Constitutional validity of the provisions of an Act or Rule is under challenge;
  • Where Board’s (CBDT) order, Notification, Instruction or Circular has been held to be illegal or ultra vires;
  • Where Revenue Audit’s objection in the case has been accepted by the Department;
  • Writ matters;
  • Matters pertaining to other direct taxes, i.e., other than Income-Tax;
  • Where the tax effect is not quantifiable or not involved, such as case of registration of trust or institution under section 12A.

Every tax appeal to the ITAT must be filed within 60 days of the date on which the order sought to be appealed against is communicated to the taxpayer/assessee or to the Principal Commissioner or Commissioner, as the case may be.

The ITAT may admit a tax appeal or permit the filing of a memorandum of cross-objections after the expiry of the relevant period of 60/30 days (as the case may be) if it is satisfied that there was sufficient cause for not presenting it within that period.


Draft and file an Income Tax Appeal/Writ Petition

  • Click the “MinusTax Professionals” red banner below and fill-up/submit the pop-up form
  • Upload (if any) relevant documents (eg.CIT(A) Order)
  • Pay professional fees and charges (as quoted)
  • Receive (including via email) and file professionally drafted Appeal/Writ Petition
  • Legal representation by MinusTax Professionals before Appellate/Writ authority (optional)
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The Assessing Officer (AO) or the concerned assessee/taxpayer etc. (as the case may be) on receipt of notice that an appeal against the order of the Commissioner of Income Tax (Appeals) or CIT(Appeals), has been preferred by the other party, notwithstanding that he/she/it may not have appealed against such order or any part thereof, may within 30 days of the receipt of such notice, file a Memorandum of Cross-Objections, verified in the prescribed manner, against any part of the order of the CIT(Appeals), and such memorandum shall be disposed of by the Income Tax Appellate Tribunal (ITAT) as if it were an appeal presented within the time prescribed.

An appeal to the Income Tax Appellate Tribunal (ITAT) is required to be filed in the prescribed Form No.36 (and 36A for Cross-Objections) and verified in the prescribed manner.

Irrespective of the date of initiation of the relevant assessment proceedings relating thereto, the filing fees for such appeal is as follows —

  • Where the total income of the assessee as computed by the Assessing Officer (AO), in the case to which the appeal relates, is Rs.100,000 or less, fees of Rs.500;
  • Where the said total income is more than Rs.100,000 but not more than Rs.200,000, fees of Rs.1500;
  • Where the said total income is more than Rs.200,000, fees shall be 1 per cent of the assessed income, subject to a maximum of Rs.10,000; and
  • Where the subject matter of an appeal relates to any matter, other than those specified above, fees shall be Rs.500.

No fee however is payable in the case of a Memorandum of Cross Objections, though an application for Stay of Demand has a filing fee of Rs.500.


Draft and file an Income Tax Appeal/Writ Petition

  • Click the “MinusTax Professionals” red banner below and fill-up/submit the pop-up form
  • Upload (if any) relevant documents (eg.CIT(A) Order)
  • Pay professional fees and charges (as quoted)
  • Receive (including via email) and file professionally drafted Appeal/Writ Petition
  • Legal representation by MinusTax Professionals before Appellate/Writ authority (optional)
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Documents for submission and filed in appeal
  • Form No. 36 and Memorandum of Appeal – in triplicate
  • Order appealed against – 2 copies (including one certified copy)
  • Order of Assessing Officer – 2 copies
  • Grounds of Appeal before first appellate authority (i.e. Commissioner of Income Tax (Appeals) – 2 copies
  • Statement of Facts filed before first appellate authority (CIT (Appeals)) – 2 copies
  • In case of appeal against penalty order – 2 copies of relevant assessment order
  • In case of appeal against order under section 143(3) (i.e. Scrutiny or Regular Assessment), read with section 144A – 2 copies of the directions of the Joint Commissioner under section 144A
  • In case of appeal against order under section 143, read with section 147 (Income Escaping Assessment)- 2 copies of original assessment order, if any
  • Copy of challan for payment of appeal fee

Submission of Paper Book
  • The appellant or the respondent to the appeal, may submit a Paper Book
  • Paper Book is to be submitted in duplicate and should contain documents or statements or other papers referred to in the assessment order or the CIT(Appeals) appellate order on which appellant/respondent wants to rely
  • Paper Book should be duly indexed and page numbered. It should be filed at least a day before the hearing of the appeal
  • Paper Book should be filed along-with the proof of service of copy of the same to the opposite party at least a week before
  • Each paper in the Paper Book is to be certified as true copy by the party filing the same
  • Delay in filing the Paper Book may be condoned in genuine cases of delay
  • The ITAT can also on its own direct the preparation of Paper Book in triplicate by and at the cost of appellant or the respondent as it may consider necessary for disposal of appeal
  • Additional evidence, if any, should be filed separately and should not form part of the paper book

Filing of additional evidence

Filing of additional evidence before the ITAT by parties to the appeal is not permitted as of right, however, if the ITAT requires production of any document, examination of any witness or filing of any affidavit to enable it to pass orders, it may allow such document to be produced, witness to be examined, affidavit to be filed and such evidence to be adduced.


Draft and file an Income Tax Appeal/Writ Petition

  • Click the “MinusTax Professionals” red banner below and fill-up/submit the pop-up form
  • Upload (if any) relevant documents (eg.CIT(A) Order)
  • Pay professional fees and charges (as quoted)
  • Receive (including via email) and file professionally drafted Appeal/Writ Petition
  • Legal representation by MinusTax Professionals before Appellate/Writ authority (optional)
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  • For the purposes of hearing the appeal, the ITAT will fix the date of hearing along with the place of hearing the appeal and will also notify the parties
  • A copy of memorandum of appeal is to be sent to the respondent either before or along with such notice
  • The ITAT will hear the relevant parties to the appeal on the date fixed; and
  • The appeal may be adjourned on other dates and in such a case the appeal will be heard on the respective dates.

Ex Parte Appeal and Hearing

If the appellant is called by the ITAT but fails to appear before the ITAT either in person or through an authorized representative, the appeal may be disposed of by the ITAT on merits after hearing the respondent on an ex parte basis. However, subsequent to ex parte hearing, if the appellant appears before the ITAT and satisfies the ITAT that there was sufficient cause in his case for non-appearance, the ITAT may then set aside the ex parte order and restore the appeal. Similar procedure is applicable where appeal is disposed of in the absence of respondent.

The ITAT may, on an application made by the taxpayer and after considering the merits of the application, pass an order of stay in any proceedings relating to an appeal filed. The stay order can be in operation for a period not exceeding 180 days from the date of such order and the ITAT will then dispose of the appeal within the said period of stay specified in that order.

If the relevant appeal is not so disposed of within the period of stay specified in the order of stay, the ITAT may extend the stay period, on an application made in this behalf by the taxpayer on being satisfied that the delay in disposing of the said appeal is not attributable to the taxpayer.


Draft and file an Income Tax Appeal/Writ Petition

  • Click the “MinusTax Professionals” red banner below and fill-up/submit the pop-up form
  • Upload (if any) relevant documents (eg.CIT(A) Order)
  • Pay professional fees and charges (as quoted)
  • Receive (including via email) and file professionally drafted Appeal/Writ Petition
  • Legal representation by MinusTax Professionals before Appellate/Writ authority (optional)
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The Income Tax Appellate Tribunal (ITAT) after giving both the parties to the appeal an opportunity of being heard, will pass such orders thereon as it thinks fit, which will be pronounced and communicated to the assessee/taxpayer as well as the Assessing Officer concerned.


Rectification of Appellate Order

The ITAT may, at any time within 4 years from the date of the order, rectify any mistake apparent from record, amend any order passed by it if the mistake is brought to its notice by the taxpayer or Assessing Officer.

However, where such amendment has the effect of enhancing an assessment or reducing a refund or otherwise increasing a liability of the taxpayer, it shall not be made unless the Appellate Tribunal has given a notice to the taxpayer of its intention to do so and has allowed the taxpayer a reasonable opportunity of being heard.


Time period for disposing off an Appeal

In every appeal, the ITAT, where it is possible, may hear and decide such appeal within a period of 4 years from the end of the financial year in which such appeal is filed under the Act.

 

Draft and file an Income Tax Appeal before the Income Tax Appellate Tribunal (ITAT)- MinusTax Professional Help

  • Click the “MinusTax Professionals” red banner below and fill-up/submit the pop-up form
  • Upload (if any) relevant documents (eg.CIT(A) Order)
  • Pay professional fees and charges (as quoted)
  • Receive (including via email) and file professionally drafted Appeal/Writ Petition
  • Legal representation by MinusTax Professionals before Appellate/Writ authority (optional)

For administrative assistance and general queries, please contact MinusTax via —
Telephone: +91 8800 38 1950
Email: contact@minustax.com

Alternatively, please contact for an appointment and visit our representational office in DLF Phase IV, Gurgaon (click for Google Map directions).

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