Section 250 – CIT(A) Appeal Order
Section 250 of the Income Tax Act, 1961, outlines the procedure for appeals to the Commissioner of Income-tax (Appeals), commonly known as CIT(A). The CIT(A) is the first appellate authority in the income tax hierarchy, providing an important avenue for taxpayers to seek redressal against unfavorable orders passed by the Assessing Officer (AO).
This section details the powers and processes that the CIT(A) must follow when an appeal is presented, including the conduct of hearings and the passing of the appeal order. It ensures that taxpayers have a structured legal recourse if they are aggrieved by an assessment or other specified orders.
Orders Appealable Before CIT(A)
As per Section 246A of the Income Tax Act, a taxpayer can file an appeal before the CIT(A) against various orders, including but not limited to:
- Intimation issued under Section 143(1) making adjustments to the returned income.
- Scrutiny Assessment Order under Section 143(3) or Best Judgment Assessment Order under Section 144.
- Reassessment Order under Section 147/148.
- Assessment or reassessment orders in search cases under Section 153A or 153C.
- Rectification Orders under Section 154 or 155.
- Orders imposing penalties under various sections (e.g., Section 271(1)(c), Section 270A).
- Orders passed treating the taxpayer as an agent of a Non-Resident.
Procedure in Appeal Before CIT(A) (Section 250)
1. Fixing Date and Place of Hearing (Sub-section 1)
The CIT(A) is required to fix a date and place for the hearing of the appeal and notify both the appellant (taxpayer) and the Assessing Officer whose order is being appealed against. With the introduction of the Faceless Appeal Scheme, hearings are primarily conducted through video conferencing.
2. Right to be Heard (Sub-section 2)
Both the appellant (or their authorised representative) and the Assessing Officer (or their representative) have the right to be heard at the appeal hearing.
3. Adjournment of Hearing (Sub-section 3)
The CIT(A) has the power to adjourn the hearing of the appeal from time to time, if deemed necessary.
4. Further Inquiry (Sub-section 4)
Before disposing of any appeal, the CIT(A) may undertake further inquiry or direct the Assessing Officer to conduct further inquiry and submit a report. This ensures that all necessary facts and evidence are considered before a decision is made.
5. Admission of New Grounds of Appeal (Sub-section 5)
At the hearing, the CIT(A) may allow the appellant to raise any ground of appeal not specified in the original Form of Appeal (Form 35) if satisfied that the omission was not willful or unreasonable. This provides flexibility for taxpayers if a crucial point was inadvertently missed earlier.
6. Passing of Order (Sub-section 6)
The order passed by the CIT(A) disposing of the appeal must be in writing. It must clearly state:
- The points for determination (issues raised in appeal).
- The decision on each point.
- The reasons for the decision.
The CIT(A) possesses wide powers under Section 251, including the authority to confirm, reduce, enhance, or annul the assessment or penalty.
7. Time Limit for Disposal of Appeal (Sub-section 6A)
The CIT(A) is mandated, wherever possible, to hear and decide an appeal within one year from the end of the financial year in which the appeal was filed. It is important to note that this time limit is generally considered directory and not mandatory, meaning an order passed beyond this period may still be valid, though efforts are made to adhere to it.
8. Communication of Order (Sub-section 7)
Upon disposal of the appeal, the CIT(A) must communicate the order to both the assessee and the Principal Chief Commissioner or Principal Commissioner or Chief Commissioner.
Faceless Appeals: The government has introduced the Faceless Appeal Scheme (now incorporated into the e-Appeals Scheme, 2023), minimizing physical interaction between taxpayers and tax authorities. All appeals before the CIT(A) are intended to be finalized in a faceless manner through an automated allocation system. Taxpayers can request a personal hearing via video conferencing.
Key Considerations for Taxpayers
- Time Limit for Filing Appeal: An appeal to the CIT(A) must generally be filed within 30 days from the date of service of the order or notice of demand. The CIT(A) has the power to condone delays if there is sufficient cause.
- Form 35: Appeals are filed in Form 35, which requires a detailed statement of facts and grounds of appeal.
- Appeal Fees: A fee is payable based on the total income assessed by the Assessing Officer. For income up to ₹1 lakh, it's ₹250; for income between ₹1 lakh and ₹2 lakh, it's ₹500; and for income exceeding ₹2 lakh, it's ₹1,000.
- Pre-deposit of Tax: While filing an appeal, a taxpayer is generally required to pay the tax due on the income returned by them. In cases where no return has been filed, an amount equal to the advance tax payable may be required.
Careful Drafting of Appeal: The success of an appeal heavily relies on the precise drafting of the statement of facts and grounds of appeal. Any issue not raised in the grounds of appeal may not be considered by the CIT(A) unless specifically permitted under sub-section (5).
Conclusion
Section 250 of the Income Tax Act establishes the fundamental procedural framework for the first level of appeal against income tax orders in India. It ensures fairness by providing taxpayers with an opportunity to present their case before an independent appellate authority. Understanding this section, along with the appealable orders and the procedural requirements, is crucial for any taxpayer seeking to challenge an assessment or penalty order. The transition to faceless appeals has further streamlined this process, emphasizing digital communication and online hearings.
Facing an Unfavorable Income Tax Order? DisyTax Can Help!
Appealing an Income Tax order can be a complex process, but it's a vital right for taxpayers. If you're aggrieved by an order from the Assessing Officer, DisyTax provides expert assistance to help you file and represent your appeal before the CIT(A).
Our services include:
- Review and Analysis: Thoroughly reviewing your assessment order to identify strong grounds of appeal.
- Drafting and Filing: Meticulously preparing and filing your Form 35 with accurate facts and compelling arguments.
- Representation: Representing your case effectively during CIT(A) hearings, including virtual appearances in the faceless regime.
- Strategic Advice: Guiding you on the best course of action and the potential outcomes of your appeal.
Don't let a disputed tax order impact your finances. Contact DisyTax for comprehensive appeal support and increase your chances of a favorable outcome.
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