Thursday, April 16, 2015

Income Tax Appeal filing, Forms and Challan

An "Appeal" is a proceeding taken to rectify an erroneous decision of a court by submitting the question to a higher court, or court of appeal. An Appeal under the Income Tax laws can be filed before the Commissioner (Appeals), the Income Tax Appellate Tribunal, the High Court and the Supreme Court when a tax payer is adversely affected by Orders passed by various Income Tax Authorities.

Forms for Filing of Appeals

An Appeal before the Commissioner of Income Tax (Appeals) [CIT(A)] is made thrugh a Memorandum of Appeal in Form No. 35. An Appeal before the I.T.A.T has to be be filed in Form No. 36. Further, a Cross Objection is made in Form 36A.

The Form of Appeal can be signed by the individual tax payer himself or by a person duly authorized by him holding a valid Power of Attorney. In case of an HUF, it is to be signed by the Karta and in case of a company, by the Managing Director. An Authorised Partner may sign it in the case of a firm.

Documents Accompanying the Memorandum of Appeal

Before the CIT(A): Duplicate copies of:

  1. Statement of Facts
  2. Ground of Appeal
  3. Notice of Demand (including the Notice in Original)
  4. Copy of Order against which the Appeal is preferred.

Before the ITAT: Triplicate copies of:

  1. Statement of Facts
  2. Grounds of Appeal
  3. Order of CIT (A)
  4. Copy of Form No. 35 filed before the CIT(A) (with complete set of documents).

Presentation of Appeal

The Appeal must be presented: 
  • in person or by an agent; or
  • sent by Registered Post addressed to the Office of the Commissioner (Appeals).
  • If sent by post, it shall be deemed to have been presented on the day on which it is received by the Office of the Commissioner (Appeals) or the Tribunal.

Time for Filing of Appeal

Appeal to the CIT(A) should be filed within 30 days from the date of Notice of Demand relating to Assessment or Penalty Order, or from the date on which the Order was communicated to the assessee. An Appeal to the Tribunal should be filed within 60 days from the date on which the Order is communicated.

The Appeal may be admitted by the CIT(A)/ITAT even after the expiry of 30/60 days, if the Appellate Authority is satisfied that there was sufficient cause for not presenting the Appeal within the specified period. Application for condonation of delay and reasons for delay, along with necessary evidences, should be filed with Form No. 35/36 at the time of filing of appeal. 

Payment of Admitted Tax

Section 249(4) of the Income Tax Act, 1961 provides that no appeal shall be entertained by the CIT(A) unless, at the time of filing of 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 CIT (Appeals) is empowered, for any good and sufficient reason, to exempt the assessee from the operation of this provision in case of (b).

An Appeal is not maintainable in the case where tax is not deducted at source from payment made to non-resident and is not paid to the Govt. prior to the filing of appeal.

An Appeal Before the High Court

One can file an Appeal before the High Court when the case involves a substantial question of law. The Appeal can be filed by the tax payer or by the Chief Commissioner/Commissioner of Income Tax within 120 days of receipt of the Order.

If the High Court is satisfied that a substantial question is involved, it would formulate that question. An Appeal filed before the High Court is heard by a bench of not less than two Judges and the decision is by majority.

When Can an Appeal be Filed?

Before CIT(A)                                              
Before ITAT
·         Order against tax payer where the tax payer denies liability to be assessed under Income Tax Act;
·         Intimation issued under Section 143(1) making adjustments to the returned income
·         Scrutiny Assessment Order u/s 143(3) or an ex-parte Assessment Order u/s 144
·         Re-assessment Order passed after reopening the assessment u/s 147/150
·         Search Assessment Order u/s 153A or 158BC
·         Rectification Order u/s 154/155
·         Order u/s 171 recording finding about partition of Hindu Undivided Family(HUF)
·         Order u/s 115VP(3) refusing approval to opt for tonnage-tax
·         Order determining refund u/s 237
·         Order u/s 201(1)/206C(6A) deeming person responsible for deduction of tax at source as assessee in default on failure to deduct/ collect tax at source
·         Order imposing penalty u/s 221/271 /271A/ 271AAA/ 271F/271FB/272A/272AA/272BB/275(1A)/158BFA(2)/271B/ 271BB/271C/271CA/271D/271E
·   Order by Commissioner(Appeals) u/s 250/154/271/ 271A/272A
·    Order by Commissioner u/s 12AA on registration application by a charitable or religious trust
·   Order by Commissioner u/s 263 revising Assessing Officer’s order considered prejudicial to the interest of revenue;
·   Order by Commissioner u/s 154 to rectify an order u/s 263
·    Penalty order passed by Commissioners u/s 271 or section 272A;
·   Penalty order passed by Chief Commissioner u/s 272A;
·   Order passed by Assessing Officer u/s 143(3)/147 in pursuance of direction of Dispute;

Schedule of Appeal Fees

Fees for filing appeal before CIT (A)
Fees for filing appeal before I.T.A.T
Assessed Total Income is Rs. 1 lakh or less
Rs. 250
Rs. 500
Assessed Total Income is more than Rs. 1 lakh but not more than Rs. 2 lakhs
Rs. 500
Rs. 1,500
Assessed Total Income is more than Rs. 2 lakhs
Rs. 1000
1% of Assessed Income subject to a maximum of Rs. 10,000
Where subject matter is not covered under any of above
Rs. 250
Rs. 500
Under Wealth Tax
Rs. 500
Miscellaneous application u/s 254(2)
Rs. 50
Stay Petition
Rs. 500

How to Fill Income Tax Appeal Challan?

An Appeal can be filed only after Appeal Fee is paid. So, one should take care of the following points while making the payment of appeal fee and filling the proper challan as that fee can’t be adjusted against tax payment:

  1. The challan form to be used is Challan No. 280.
  2. If the Appeal is for more than one year, Appeal Fees has to be paid for each year through a separate challan. 
  3. Write Correct Permanent Account Number (PAN)  
  4. For depositing the Appeal Fees in case of Non Corporate and Corporate Assessee, Major Head 020 or 021 is to be selected.
  5. Under ‘Type of Payment’, Minor Head Self Assessment Tax (300) has to be selected.
  6. Under ‘Details of Payments’, the amount has to be entered in the "Others" column. 
  7. Do not use Challan 280 for depositing TDS.

Contributed by Ms. Tanya Gagneja (Article Assistant, Sandeep Ahuja & Co.)