APPEALS
Income-tax
Act, 1961, as other Direct Tax Laws, contain provisions which provide
for self-contained machinery provisions enabling tax payers to file
appeals against orders which affect their tax liability. Such orders
are enumerated in section 246 of the Act. The fist appeal lies before
the Commissioners (Appeals) and the second appeal lies with the
Appellate Tribunal.
The
Commissioners (Appeals) are senior officers of the department who
have been allowed full independence to adjudicate any tax matters
without any interference from the administrative ministry. The Appellate
Tribunal functions under the Ministry of Law and has several benches
in major cities of the country. Normally, a bench of the Appellate
Tribunal would have one Accountant Member, who may be a former officer
of the Indian Revenue Service or a Chartered Accountant and one
Judicial Member who may be a former Judge of the rank of District
Judge or an Advocate or a senior member of Indian Legal Service.
Appeal
procedure
- Any
taxpayer aggrieved by the adjustments to the returned income in
the intimation sent to him or by the order of assessment, penalty
or rectification by an Assessing Officer can file first appeal
before Commissioner (Appeals),
- There
is a prescribed form for filing the appeal (Form No.35). Prescribed
fee is required to be paid before filing of appeal. The form should
be signed by the assessee. The grounds of appeals and the statement
of facts are also required to be filed along with Memorandum of
Appeal.
- Appeal
must be filed within thirty days from the date of receipt of the
relevant order. In appropriate cases where the delay is for good
reasons, Commissioner(Appeals) can condone the delay.
- The
appeal is admitted for hearing only if at the time of filing of
appeal the assessee has paid the tax due on income returned.
- Once
the appeal is filed, it can be withdrawn only with the permission
of appellate authority.
- Normally
the assesee cannot file the additional evidence or evidence not
led in before the assessing officer before Commissioner (Appeals).
In case where the appellate authority wants to admit this additional
evidence, an opportunity to examine this is given by the authority
to the assessing officer.
- Commissioner
(Appeals) have also power of enhancing the assessed income or
penalty.
- Commissioner
(Appeals) can remand a case to an Assessing Officer to inquire
and furnish a report on a specified matter.
- Commissioner
(Appeals) makes a reasoned order in writing after giving opportunity
for hearing to the appellant and the assessing officer.
- In
respect of cases under Wealth tax act, appeal to Commissioner(Appeals)
lies where the assessed net wealth is over Rs. 15 lakhs or the
appellant is a company. Appeal is required to be filed in Form
No. E of Wealth Tax Rules.
BLOCK
ASSESSMENTS APPEALS
Where
as a result of search initiated after 30.6.1995 and before 1st January,
1997, the Assessing Officer makes an order determining the undisclosed
income of the block period and the assessee is aggrieved, he can
file an appeal before the Appellate Tribunal within 30 days from
the date of receiving the order.
In
respect of search initiated on or after January 1, 1997, Commissione
of Income Tax (Appeals) is the first appellate authority against
block assessment orders or penalty for under declaration of undisclosed
income in the return of income for the block period. In these cases
second appeal will lie to the Tribunal.
APPELLATE
AUTHORITIES
APPEAL
TO APPELLATE TRIBUNAL
An
assessee aggrieved by the orders of the Commissioner (Appeals) can
file further appeal to the Appellate Tribunal. He can also file
appeal with the Tribunal against the order of revision or rectification
prejudicial to him made by Commissioner of Income-tax.
The
appeal is required to be filed in the prescribed Form No. 36. the
form under Wealth-tax and Gift tax Rules are F&H respectively.
A fee
Rs. 1,500/- is required to be paid for the appeal to the Tribunal
where the assessed total income of the assessee is more than one
lakh rupees. Where it is Rs. 1 lakh or less, the fee required to
be paid is Rs. 250/- . For appeals under Wealth-tax Act the fee
is Rs. 200/-.
The
appeal has to be filed within sixty days from the date of receiving
the relevant order.
The
Memorandum of appeal should be accompanied by grounds of appeal,
statement of facts and a paper book containing the relevant orders
and statement, documents referred to in the order and proposed to
be relied upon at the time of hearing of the appeal.
Normally
a bench of the Tribunal consisting of one Judicial Member and one
Accountant Member hears and decides appeals. The cases where the
total income assessed does not exceed one lakh rupees may be heard
and decided by a single Member.
The
assessing officer, not satisfied with the order of the first appellate
authority, may also file an appeal with the Tribunal upon an authorisation
from the Commissioner.
Where
the assessee has not filed an appeal and the Department does, the
assessee may file a cross objection within thirty days of the receipt
of the notice of departmental appeal. The cross objection is required
to be filed in Form No. 36A. No fee is required to be paid by the
assessee for filing the cross objection before the Tribunal.
APPEAL
TO HIGH COURT ON QUESTION OF LAW
Until
1.10.1998, the assessee or the Commissioner could file a reference
to the High Court on any question of law arising from the order
of the Tribunal and the High Court, in an advisory capacity, would
dispose of the reference by answering the question in the affirmative
or in the negative on the basis of the Statement of Facts drawn
up by the Tribunal.
The
Finance Act, 1998 has introduced a new provision whereby a direct
appeal would lie to the High Court from all orders passed by the
Appellate tribunal on or after 1.10.1998. The jurisdictional High
Court will have the discretion to admit the appeal if any substantial
question of law is involved. The procedure for filing the appeal
would be the same as prescribed in the Civil Procedure Code subject
to any rules framed in this regard by the High Court. The appeal
must be filed within 120 days of the receipt of the order by the
assessee or by the Commissioner.
REFERENCE
AND APPEAL TO THE SUPREME COURT
Where
there is a conflict in the decision of High Courts in respect of
any particular question of law, the Appellate Tribunal may draw
up a statement of case and refer it through its President direct
to the Supreme Court for its opinion.
If
the assessee is not satisfied with the decision given by the High
Court on a question of law referred to it, he may file an appeal
before the Supreme Court against the judgment of the High Court.
Such appeal can only be filed before the Supreme Court if the High
Court certifies it be a fit case for appeal to the Supreme Court.
The application before the High Court for certificate of fitness
should be filed within 60 days.
Where
High Court refuses to grant such a certificate, the assessee can
under Article 136 of the constitution file a Special Leave Petition
before the Supreme Court. If the Special Leave to appeal is granted,
the Supreme Court will hear and decide the appeal on merits.
After
the Supreme Court decides the issue, the Tribunal will revise its
order in conformity with the order of the Supreme Court.
The
procedure outlined above in regard to appeals under the Income-tax
Act applies mutatis mutandis to appeals under Wealth tax and Gift
tax Act as well.
ADVANCE
RULING FOR NON-RESIDENTS
With
a view to avoiding disputes in respect of assessment of Income Tax
liability of non residents the Income Tax provides that a non resident
assessee can apply to authority for advance ruling and obtain a
ruling in advance in respect of the transaction specified by the
non resident. This ruling is binding on the Income Tax authorities
and the non resident who seeks the ruling in respect of that transaction.
The
non resident seeking the advance ruling should make an application
in Form No. 34C along with a fee of Rs. 2500/- (Rs. Two Thousand
Five Hundred Only) through a bank draft in favour of the ' Authority
for Advance Rulings' payable at New Delhi.
AUTHORITY
FOR DISPUTES UNDER DOUBLE TAX AVOIDANCE AGREEMENTS
India
has entered into double taxation avoidance agreements with several
countries. If a foreign tax payer is aggrieved by the tax authorities,
under these agreements he can present his case to the competent
authority which is Ministry of Finance (Department of Revenue),
Joint Secretary, Foreign Tax Division, North Block, New Delhi. The
time limit for making reference to the competent authority is three
from the taxation complained against. This course is available to
a foreign tax payer in addition to normal appellate forums in respect
of assessment orders.
APPEAL
AGAINST PRE- EMPTIVE PURCHASE
Orders
of the appropriate Authority for pre-emptive purchase of immovable
property are final and no appeal is provided against these orders.
JURISDICTION
OF CIVIL COURTS
In
view of the elaborate appellate system provided under Direct Tax
Laws, the jurisdiction of Civil Courts is barred. No suits can be
filed an any court against the order made under the Direct Tax Laws.
This however does not curtail the original writ jurisdiction of
High Court or of the Supreme Court under the constitution of India.
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