Appeal and Revision in
Income Tax Act
Appeal and Revision Whenever an assessee is not satisfied with order
passed by an assessing officer, in this case he is having two options:
1. Appeal against such order
2. Revision of such a order
Meaning of Appeal
Appeal means lodging a complaint. Whenever an assessee is not satisfied
with the order passed by an assessing officer, he can file an appeal with the
higher authority.
PAYMENT OF TAX BEFORE FILING
APPEAL
1. Before filing the appeal to CIT appeal the assessee has to pay
the amount of tax decided by assessing officer in his order.
2. But in certain circumstances the authority may exempt the
assessee from paying such tax before filing such appeal
Appealable orders against the orders passed by assessing officer
are as follows:
There are various penalties which can be imposed for various
defaults and if such penalty is imposed in that case an appeal can
be made to commissioner appeal.
Income Tax Appellate Tribunal (ITAT)
Constitution of ITAT and its members The central government constitute the Income tax
Appellate Tribunal (ITAT). It has two types of members i.e. accountant members and judicial
members.
Qualification of members of ITAT ➢Judicial Member:
Any person who has held a judicial office in India for at least 10 Years or
Who has been a member of Indian legal services grade II or an equal or higher post for minimum
three years or
Who has been an lawyer for at least 10 years
Qualification of members of ITAT ➢Accountant Member:
A practicing chartered accountant In India for at least 10 years or
A member of Indian Income tax services, group A and was on the post of additional
commissioner or on any higher post for a period of at least three years.
Appointment of Vice- president and President ➢
the central government may appoint out of the members one or more vice
president or presidents. Further the central government will appoint a siting
or retired judge of high court having at least 7 years of experience as judge
or
One of the vice presidents as the presidents of the ITAT.
Powers of Income tax Appellate Tribunal (ITAT)
The Income tax Appellate Tribunal (ITAT) shall exercise all the powers of
income tax authority as are given to them u/s 131. All the proceedings with
Income tax Appellate Tribunal (ITAT) shall be judicial proceedings.
Further, the vice presidents shall exercise those powers and functions as
are assigned to them in writing by president of Income tax Appellate
Tribunal (ITAT)
Functioning of Income tax Appellate Tribunal (ITAT)
➢Any case to appellate tribunal shall be heard by a Bench
(panel of judges)
➢Generally a bench has two members (one is judicial and other
one is accountant member)
Functioning of Income tax Appellate Tribunal (ITAT)
➢However, if the total income of the assessee is up to rupees
50,00,000 then only one member shall hear the case.
➢In special cases the members of the Income tax Appellate
Tribunal (ITAT) may be three or more (with at least one as judicial
member and one as accountant member)
➢In this case the decision shall be taken by the majority.
Memorandum of cross objection
Whenever an appeal is filed with Income tax Appellate Tribunal (ITAT) and the other party
gets notice of it, in that case if the other party also wants to file an appeal against such
appeal this is called memorandum of cross objection.
Where memorandum of cross objection is filed in that case both the parties are considered
as parties to the appeal.
In case of appeal by the department the TAX EFFECT IS TO BE considered. In order to
reduce the unnecessary litigation in the courts of India, the income tax act has made a
rule that if the department of income tax has to approach Income tax Appellate Tribunal
(ITAT) or any other higher authority then tax effect is to be considered first.
In simple words if department of income tax wants to file the appeal, then
the tax effect (loss to department in a case) must be more than the limits
specified below:
➢In case of appeal to Income tax Appellate Tribunal (ITAT) the tax effect
must be at least 50,00,000
➢Incase of appeal to High court the tax effect must be 1,00,00,000
➢In case of appeal to Supreme court the tax effect must be 2,00,00,000.
Appealable orders to Income tax
Appellate Tribunal
(ITAT) Following are the order against which the appeal may be made to
Income tax Appellate Tribunal (ITAT)
1. Against the order passed by CIT appeal
2. Against the order of assessing officer in case of tonnage tax scheme.
3. Against revision order u/s 263
4. Against any other order of CIT/CCIT/DIT/DGIT
Procedure of orders passed by Income tax Appellate Tribunal (ITAT)
➢First of all while hearing the case, both the parties shall be heard by Income tax Appellate
Tribunal (ITAT).
➢In Normal circumstances the judgment shall be passed within four year from the year in
which appeal is filed
➢The cost of appeal shall be decided by the Income tax Appellate Tribunal (ITAT)
Procedure of orders passed by Income tax Appellate Tribunal (ITAT)
The copy of judgment shall be delivered to both the parties. The Income tax Appellate Tribunal
(ITAT) can make amendment in his order within a period of 6 months from passing its orders.
(But If the effect of this amendment is the increase in the net tax liability of the assessee in that
case he will be given a chance of hearing first).
In case of revision the principal commissioner or commissioner Income tax shall give
the taxer payer a chance to present his side and after hearing the assessee, the
commissioner may;
➢Increase the tax liability
➢Change the order of assessing officer
➢Cancel the order of assessing officer and ask him to pass new order
In the following cases an order of assessing officer is considered against
government revenue;
➢If the order was passed without any enquiry which was necessary
➢If benefit was given without taking any evidence
➢If the orders were not passed as per guidelines
➢If the order were not passed as per decisions of high court or supreme court.
