Income Tax

Income Tax Appellate Tribunal (ITAT): Brief Overview

Income Tax Appellate Tribunal (ITAT)

The Income Tax Appellate Tribunal (ITAT) is a quasi judicial authority where an affected party by the orders of the income tax authorities can appeal. An appeal can be filled by the tax payers who are affected because of any order or an assessment ordered by the income tax authorities. In the same way, the income tax authorities too can file an appeal against any order passed by lower income tax authorities.

Structure and nature of ITAT

The appellate tribunal is a quasi-judicial body set up by the union government to handle the appellate matter under the Income Tax Act. The Income Tax Appellate Tribunal (ITAT) works under the Ministry of law and justice. The ITAT has a number of benches for the different regions each having a regional jurisdiction.

The bench at ITAT is constituted by the president of the ITAT and amongst the other members of the ITAT. Each bench shall consist of one judicial member and an accountant member. However, the president or any member of the ITAT has the power to dispose of any appeal, in the cases where the total income which is calculated by the assigned assessing officer does not cross Rs 50 lakh. In some cases where it is required the appellate tribunal may constitute a special bench for the purpose to dispose of the appeals with at least one judicial member and one accountant member.

In respect to the factual matters, the decision of the ITAT[1] decision will be finding in concern of factual matters. ITAT is also known as the fact finding authority.

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Function of ITAT

The Income-Tax appellate tribunal is the second forum in which the appeals are been heard after the Commissioner of Income Tax (Appeals). The appeals are heard by all the matters concerning orders of assessment passed by the income tax authorities.

All the functions of the Income Tax Appellate Tribunal act under the guidance and supervision of the High Court of that particular region. The authority of the ITAT is subordinate to the High court. It mandates the ITAT to follow the precedents passed by the High court. In the matters where the ITAT is dealing with the appeal, it is bound to follow all the rules which are laid by the High Court. Similarly, the ITAT is also blinded by the rules and precedents lay by the supreme court of India.

Appealable orders before ITAT

The following the appealable orders before ITAT:

  • Any order passes by the Income tax Commissioner.
  • Any order passes by the Jurisdictional Commissioner.
  • Any order passes by the direction of the Dispute Resolution panel by an Assessing Officer.
  • Any order approved by Assessing Officer.
  • Any order of penalty passed by the commissioner.
  • Any application of stay on the tax demands
  • Any other miscellaneous application for the purpose of recall orders.

Financial limits to file appeals before ITAT                                                      

The Central Board of Direct Taxes (CBDT) has the power to issue any instruction or order or any direction to the income tax authorities. The CBDT has the authority to fix the financial limit to further regulate the filling of reference, application or appeal to the ITAT, Supreme Court, or the jurisdictional High Court.

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The fillings of appeals before the Supreme Court, high court or ITAT are as follows:

  1. Before Income Tax Appellate Tribunal – Rs. 50 lakhs
  2. Before High Court – Rs 1 crore
  3. Before Supreme Court – Rs 2 crore

Procedure to file an appeal before ITAT

Any appeal before the ITAT should be in accordance with Form 36.

The submissions should be in the structure of the paper book:

  1. Two Copies of the appealed order against certified copy.
  2. Two copies of the Assessing Officer order.
  3. Two copies of the ground of appeal which was submitted before the appellate authority.
  4. Two copies of the statement of facts.
  5. Two copies of the order in case of an appeal against the penalty order.
  6. Two copies of the direction given by the Joint Commissioner
  7. Two copies of the original assessment order, in the case where the order of reassessment passed under section 147 of the Income Tax Act.
  8. Copy of Income Tax Appellate Tribunal fee paid Challan.
  9. Two copies of the papers documents submission and papers of the earlier tax proceeding
  10. Two copies of any other relevant document

Appeal filing fees before ITAT

Any person filling an appeal before ITAT should pay the following fees:

  1. Where total income less than Rs 1 Lakh- Rs 500.
  2. Where total income is between 1 lakh to 2 lakh -Rs 1500.
  3. Where total income is more than 2 lakh- 1% of the total income, but not surpassing Rs 10,000.

Time availability

 The time allowed under ITAT is to file an appeal in 60 days from the date of communication of the order.

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Order by the ITAT

The bench of ITAT hears the presented appeal and in respect to that pass orders. Generally, a bench consists of one judicial member and one accountant member. In special cases, the president of the Income Tax Appellate Tribunal forms a special bench consists of 3 or more members. In case the difference arises the decision of the majority prevails.

Conclusion


The Income Tax Appellate tribunal gives an opportunity to appeal to the tax payer who is being affected by the decision of the income tax authorities. The income tax authorities too can file an appeal against any order passed by lower income tax authorities. The appeal should be filed within 60 days of the order passed.

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