Income Tax Appellate Tribunal And Appeals

The Income Tax Appellate Tribunal (ITAT) is a quasi-judicial tribunal that handles appeals against rulings issued by income tax authorities. A taxpayer may submit a tax appeal if he or she disagrees with the assessment order or any other order issued by an income-tax body. Similarly, an income-tax authority may challenge any order made by subordinate income-tax authorities.

Nature And structure Of ITAT

  • The ITAT is a quasi-judicial body established by the Central Government to handle appeals under the Income Tax Act of 1961. The ITAT reports to the Ministry of Law and Justice. The ITAT has several benches for different regions with regional authority. 
  • The President of the ITAT appoints a bench of an ITAT from among its members. Each bench must have an accountant and a judicial member.
  • However, where the total income as assessed by the Assessing Officer does not exceed Rs 50 lakh, the President or any member of the ITAT may dismiss any appeal. 
  • In exceptional circumstances, the ITAT may convene a special bench of three or more members to hear appeals, with at least one accountant and one judicial member. 
  • The ITAT is also the final authority on fact-finding. When it comes to factual issues, the ITAT’s decision is final.

Functions Of The ITAT

  • The Income Tax Appellate Tribunal considers appeals from income-tax officials’ orders. After the Commissioner of Income-tax, it is the second forum to consider income-tax appeals (Appeals). 
  • The ITAT operates under the jurisdictional High Court’s supervision and is subject to the High Court. 
  • The ITAT should adhere to the precedent established by the jurisdictional High Court. That implies it must follow the law established by the High Court in a case it is hearing on appeal. 
  • Similarly, the ITAT should follow the precedent or legislation established by the Supreme Court of India.

Appealable Orders

The ITAT hears appeals from the following orders:

  • Orders were issued by the Commissioner of Income Tax (Appeals) [CIT(A)].
  • The jurisdictional Commissioner issues orders.
  • According to the Dispute Resolution Panel’s instructions, the Assessing Officer issues orders.
  • The Assessing Officer issues orders.
  • The Commissioner issued a penalty order.
  • Request for a stay of tax demands.
  • Other miscellaneous applications for order recall.

Limits On The Amount Of Money That Can Be Used To File An Appeal

The Central Board of Direct Taxes (CBDT) has the authority to issue orders, instructions, or directives to income-tax agencies. The CBDT may also impose monetary restrictions on the filing of appeals or applications, as well as the referral of cases to the ITAT, jurisdictional High Court, or Supreme Court. The CBDT issued Instruction No. 17/2019 on August 8, 2019, for the income tax department to file appeals before the ITAT, High Courts, or Supreme Courts as follows:

  • Before the ITAT, the amount was Rs 50 lakh.
  • Before the High Court — one crore rupees.
  • The cost of going to the Supreme Court is Rs 2 crore.

The Monetary Limits Apply To The Tax Effect In A Specific Scenario

The ‘tax effect’ is the difference between the tax on assessed income and the tax on income before assessment adjustments. A taxpayer’s tax effect should be determined by an Assessing Officer for each assessment year. Though the following are the monetary restrictions for filing appeals, before submitting a request, one should consider the merits of the case.

Procedure To File An Appeal Before The ITAT

Income Tax Appellate Tribunal And Appeals

An appeal to the ITAT should be made in triplicate using Form No. 36. The appeal submission should be in the form of a paper book that includes the following:

  1. The order was appealed against in two copies, one of which was certified.
  2. The Assessing Officer’s order in two copies.
  3. The first appellate authority, the CIT(A), has previously received two copies of the grounds of appeal.
  4. Before the CIT(A), two versions of the Statement of Facts were presented.
  5. In the case of an appeal against a penalty order, two copies of the assessment order are required.
  6. Two copies of the Joint Commissioner’s directions where the appeal is against an assessment order issued by the Joint Commissioner’s instructions.
  7. If the appeal is against a reassessment order issued under section 147, two copies of the original assessment order must be submitted.
  8. A duplicate of the ITAT fee-paid challan.
  9. Two copies of the submissions, documents, and papers that were previously submitted during the income-tax procedures or before the CIT (A).
  10. Two copies of any additional papers or facts that the appellant desires to submit.
  • The paper book should be in good condition and well indexed. A person filing an appeal shall submit the paper book at least one week before the planned hearing and provide a copy to the respondent. Depending on the facts and circumstances of a case, the ITAT may excuse a delay in filing a paper book.
  • A provision is given in the Union Budget 2021 for conducting procedures before the Income Tax Appellate Tribunal (ITAT) in a jurisdiction-free manner. It will lower the cost of compliance for taxpayers while increasing openness in the handling of appeals. It would also aid in the equitable division of work among different benches and ensure efficient administration.

Fees For Filing An Appeal

A person filing an appeal with the ITAT must pay the appeal filing fee shown below. The fee is determined by the Assessing Officer’s assessment of your income. The income does not include the impact of the CIT’s directive (A).

  1. The total assessed income is less than Rs 1 lakh – Rs 500.
  2. The expected total income is higher than Rs 1 lakh but less than Rs 2 lakh – Rs 1,500.
  3. Total income assessed exceeds Rs 2 lakh – 1 percent of total income assessed does not exceed Rs 10,000.

If the appeal is over something else, the filing fee is Rs 500. In addition, the appeal filing cost is Rs 500 in the case of an application for a stay of demand. The ITAT determines and notifies both parties of the date and location of the appeal hearing. Along with the notification, the respondent receives a copy of the memorandum to the appeal. Before the memorandum, the respondent may receive a notice of appeal.

Income Tax Appellate Tribunal And Appeals

Time Available For File An Appeal

The deadline for filing an appeal is 60 days after the date of communication of the order that is the subject of the appeal.

Filing Memorandum Of Cross-Objections

Within 30 days of obtaining notice from the ITAT, the respondent to an appeal should file a memorandum of cross-objections with the ITAT. The form prescribed in Form No. 36A for filing cross-objections. The filing of cross-objections is free of charge. Depending on the facts and circumstances of the appeal, the ITAT may accept a delayed filing of Form No. 36A.

Representation Before The ITAT

The appellant and respondent may request the services of an authorized person to represent them at the ITAT hearing. Section 288 of the Income Tax Act of 1961 specifies who can act as authorized representatives. A taxpayer, on the other hand, cannot seek representation during a personal examination under oath.

Presentation Of Evidence

No one of the parties is permitted to provide further evidence to the ITAT. In a case, the ITAT may order the production of documents, affidavits, or the examination of witnesses, and the ITAT may allow for the production of documents, the examination of persons, or the investigation of other evidence.

Conclusion 

The ITAT bench hears the substance of the appeal and issues an order to decide the appeal. If the event that one or more of the parties fails to appear on the scheduled hearing dates, the ITAT has the authority to dismiss the appeal ex-parte. If the opposite party or parties come after the disposal and provide the ITAT with reasons for their absence, the ITAT may vacate its earlier ex-parte order.

In general, the ITAT order is issued by a bench comprised of one accountant and one judicial member. However, in exceptional circumstances, the President of the ITAT may convene a special bench of three or more members, with at least one accountant and one judicial member. If the members disagree on any matter under discussion, the majority decision takes precedence. If the members of the bench cannot agree, the President hears and determines the appeal.

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