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How to File an Income Tax Appeal with ITAT?

Saiyam Shah

| Updated: Jul 26, 2022 | Category: Income Tax, Taxation

Income Tax Appeal

ITAT stands for Income Tax Appellate Tribunal. ITAT is a quasi-judicial body set up in January 1941 established by the Central Government for the speedy disposal of cases that specializes in dealing with the appeals related to the Direct Taxes Act. An appeal can be filed against the order of the Commissioner of Income-tax if the appellant is not satisfied with the order passed by the concerned authority. However, the Income Tax Authority can also file an appeal against an order passed by a lower authority. It stands second in the hierarchy of tax litigation in India. Further in this blog we will discuss about the Income Tax Appeal with ITAT.   

What is the Jurisdiction of ITAT? 

The ITAT[1] function under the jurisdiction of the respective High Court. It follows the precedent set by the State High Court. It means that ITAT needs to pronounce the orders on the basis of the law and the precedents of the High Court and Supreme Court. However, the order passed by the ITAT is final the appeal can be filed before the High Court if there is any substantial question of law. 

Constitution of Income Tax Appellate Tribunal

ITAT consists of the following members:

President 

The president is appointed by the Central government, and he is a person who is a retired judge of the High court or has an experience of at least seven years as a judge of a high court.

The Senior Vice President or one of the Vice President of the ITAT can be the president.

Vice President 

The Vice President is appointed by the Central government, and he must have experience as a judicial member or accountant member. 

Judicial Member

A person who has been an advocate for at least ten years or has been a member of Indian legal services or any equivalent or higher post for at least three years.

Accountant Member 

He shall be a person who has been in the practice of accountancy for ten years or has been a member of the Indian Income Tax Service and has held the Additional Commissioner of Income-tax/any equivalent or higher post for at least three years.

Composition of the Benches under Income Tax Appeal before ITAT

  • The Division Bench of the Appellate Tribunal shall consist of one judicial member and an Accountant Member.
  • The SMC Bench of an appellate tribunal may dispose of the cases where the total income assessed does not exceed Rs 50 Lakhs. 
  •  The Special Bench may consist of a president and three or more members, one of whom shall be a Judicial Member and one accountant member.
  • If the member of the bench differs, the point shall be decided according to the majority’s opinion. And if the decision is not made through majority, then that points shall be referred to the president for hearing, and then a collective decision would be made after the final discussion with all the members 

Orders that are Appealable before the Income Tax Appellate Tribunal

The following orders can be appealed – 

  • The order passed by the CIT – (Appeal).
  • Any rectification order passed by the commissioner of Income-tax 
  • An order was passed by the Commissioner of Income – Tax or Principal Chief Commissioner. (Related to Registration Application made by Charitable Trust).
  • Order passed by the commissioner of Income – Tax or Principal Chief Commissioner (Related to the approval of Charitable Trust for donation made to it which would be eligible for deductions in the hands of the donor).   
  • Order passed by the commissioner of Income – Tax or Principal Chief Commissioner (Related to revision of the order of AO, which is considered prejudicial to the interest of revenue).
  • The Jurisdictional Commission
  • The order passed by the Assessing Officer as per the direction of the dispute resolution panel.
  • Penalty Order passed by the commissioner 
  • Application for Stay of Demands.
  • Other Miscellaneous applications for recall of the order.

Procedure for Filing an Income tax appeal before Income – Tax Appellate Tribunal

  • The applicant can file an appeal before the ITAT through FORM No – 36 in triplicate along with 2 copies of the following documents 
  • Order of the assessing officer 
  • The grounds of appeal earlier submitted before the first appellate authority that CIT (A)
  • Statement of Facts provided before the CIT (A)
  • Assessment Order in the case where the appeal is against a penalty order
  • Where an appeal is against a reassessment order passed under section 147, two copies of the original assessment order are to be submitted by the applicant 
  • An Income tax appeal challan filed before ITAT 
  • Any documents, submissions and papers submitted earlier during CIT (A) or Income–Tax
  • Any other documents or facts the appellant wishes to provide in Income tax appeal before ITAT  
  • The paper book filed before the appellate tribunal should be in proper indexing. The Paper booklet submitted to the tribunal should be submitted a week before the scheduled hearing, and a copy of the same should be furnished to the respondent.
  • The above are the requisite form and procedure to file an Income Tax Appeal with ITAT.

Fees to be paid for Income Tax Appeal with ITAT

The assessees filing an appeal before the ITAT have to pay prescribed fees. The fees depend on the demand raised by the Assessing Officer.

  • Where the total demand is less than Rs 1 Lakh, the fees to be paid are Rs. 500.
  • Where the total demand is more than1 lakh but less than 2 Lakh, the fees to be paid is Rs. 1,500.
  • The total demand is more than 2 lakh – 1 % of the total demand not exceeding Rs 10,000.
  • In case of any other matter, the filing fee is Rs. 500. And in case of application of stay of demand and appeal, Filing fees is Rs. 500.
  • The Fees structure for filing Income Tax appeal with ITAT has been elaborately discussed above.

Time Limit for filing an appeal before the Income Tax Aplletete Tribunal ITAT 

The time limit to file an Appeal before ITAT is 60 days from the date of the communication of the order, which is the subject matter of the appeal. 

The ITAT may allow an appeal even after 60 days if satisfied that there was sufficient cause.

Forms and Signature to be verified in Income Tax Appeal

When a tax payer files an appeal, the grounds of appeal, form of appeal, , and the form of verification are to be signed & verified by the person authorized to sign the return of income. However, in other words, the form of appeal is to be signed by the following person:

  • When an Individual Taxpayer files an appeal, he must sign the appeal or by his authorized person holding a valid power of Attorney.
  • In the case of the HUF, the Karta of the family can sign. If he is absent or not in India, it can be signed by any other adult. 
  • In the case of the Company, the managing director will sign or if he is not present, then any other Director. 
  • In the case of a firm, managing partner or if the managing partner is unavailable, then any other partner. (not being a minor)
  • In the case of LLP by a designated partner or if the designated partner is unavailable, then any other partner can sign.
  • In the case of Local Authority by the principal officer thereof 
  • In the case of the Political Party CEO of such a party.
  • In case of any other association by the principal office or by any member of the Association.
  • In case of any other individual by that person or by someone competent to act on his behalf can sign.

The faceless Income Tax appeal before ITAT        

The Central Government may build a scheme for faceless proceedings before ITAT for greater efficiency, transparency and accountability to dispose of appeals BY ITAT.

  • Implementing the Faceless proceedings before ITAT will help eliminate the interference between the parties to appeal.
  • Optimizing utilization of resources through the economics of scale and functional specialization.
  • Introducing an appellate system with dynamic jurisdiction.

To give the effect to this scheme, the Central Government may issue the notification in the official gazette that any of the provisions of this act shall not apply or, with such exception, modification and adaptation as may be specified in the notification. Such direction is to be issued before 31st March 2024.

Conclusion 

It can be concluded that Income Tax Appeal filed before ITAT plays a huge role in the disposal of the cases related to Tax laws in India, and hence it is very important for the taxpayer to be aware of this forum and time limits to file an appeal.

Read our Article: How to manage Income Tax notices?

Saiyam Shah

Saiyam Shah has done his LL.M in Business Law from Amity Institute of Advanced Legal Studies – Amity University. His area of interest is legal research related to Indirect – Tax and Company law. He has prior experience in Tax litigation, dealing with various Income – Tax Assessments and has good drafting skills in filing arguments and replying to Income – Tax Notices.

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