Analysis on CIT(A) Vs. ITAT

SL. NO.

PARTICULARS

CIT(A)

ITAT

1

Hierarchies of appellate authority

First appellate authority

Second appellate authority

2

Governing section under Income Tax Act, 1961

Section 246A

Section 253

3

Who can file?

Aggrieved assessee can file an appeal against the order of the Assessing Officer[“AO”] before the CIT(A).

Appeal to the ITAT can be filed by any of the aggrieved party i.e., either by the assessee or by the Assessing Officer.

4

Time- limit

Appeal should be presented within 30 days of the following date:

(a) Where appeal is under section 248, i.e., appeal by a person denying liability to deduct tax under section 195, the date of payment of tax.

(b) Where the appeal relates to any assessment or penalty, the date of service of notice of demand relating to the assessment or penalty.

(c) In any other case, the date on which intimation of the order sought to be appealed against is served.

It is to be filed within a period of 60 days from the date on which order sought to be appealed against is communicated to the assessee or to the Principal Commissioner of Income-Tax or Commissioner of Income-Tax (as the case may be).

5

Belated application

The Commissioner of Income-tax (Appeals) may admit belated application on sufficient cause being shown.

Note: Where taxpayer has made a belated application because of sufficient cause and CIT(A) passed an order refusing same, it would tantamount to confirming order of assessment. Hence appeal against such order is maintainable and can be decided on merits by ITAT.

[CIT v. Five Star Marine Exports Pvt Ltd (2009) 184 TAXMAN 283 (MAD.)]

The ITAT may admit an appeal even after the period of 60 days if it is satisfied that there was sufficient cause for not presenting the appeal within the prescribed time.

6

Form

Form No. 35. E-filing of Form has been made mandatory for persons for whom e-filing of return of income is mandatory.

Form No. 36

7

Signature

To be signed and verified by the person authorized to sign the return of income under section 140.

Same

8

Documents to be submitted

1. Form No. 35 - in duplicate.
2. Statement of facts- in duplicate.
3. Grounds of Appeal - in duplicate.
4. One certified copy of order, appealed against.
5. Notice of demand in original.
6. Copy of challans for the payment of prescribed fees.

Note:

No appeal shall be admitted unless at the time of filling the appeal:

• The assessee has paid the tax due on the income returned by him, or
• Where no return has been furnished, the assessee has paid tax assessed by AO in best judgement assessment. However, on application made by the taxpayer, CIT(A) may exempt the assessee from payment of tax before filing the appeal.

Form No. 36 - in triplicate.

Order of AO - 2 copies

Order appealed against - 2 copies (one certified copy).

Grounds of appeal before CIT(A) - 2 copies.

Statement of facts filed before CIT(A) - 2 copies.

In case of appeal against penalty order – 2 copies of relevant assessment order.

In case of appeal against order under section 143(3), read with section 144A – 2copies of the directions of the JCIT under section 144A.

In case of appeal against order under section 143, read with section 147 - 2 copies of original assessment order, if any.

Copy of challan for payment of fee.

9

Stay of Demand

AO can grant stay of demand till the disposal of appeals by CIT(A).

If AO does not grant stay of demand, the CIT(A) can grant same when the appeal is pending before him and it shall be valid till he passes the order.

When the appeal is pending before ITAT, it can grant the stay of demand for 180 days from the date of stay order. It shall have to pass its order u/s 254 within 180 days otherwise it can extend the stay if the delay in appeal is not attributable to assessee.

The original stay and the stay extended shall not exceed 365 days.

If appeal is not disposed off within 180 days or within extended period[shall not exceed 365 days], the order shall stand vacated after the expiry of such period periods.

10

Filing of additional evidences

CIT(A) will not permit the taxpayer to produce any additional evidences which were not produced by him before the AO.

However, in following circumstances additional evidence will be accepted by the CIT(A):

1. Where the AO has refused to admit evidence which ought to have been admitted; or
2. Where the appellant was prevented by sufficient cause from producing the evidence which he was called upon to be produced by the AO; or
3. Where the appellant was prevented by sufficient cause from producing any evidence before the AO which is relevant to any ground of appeal;or
4. Where the Assessing Officer has made the order appealed against without giving sufficient opportunity to the appellant to adduce evidence relevant to any ground of appeal.

No additional evidence shall be admitted unless the CIT(A) record the reasons in writing and unless AO has been given a reasonable opportunity.

Filing of additional evidence is not permitted.

However, if the Tribunal requires any document to be produced or any witness to be examined, or filing of any affidavit to enable it to pass orders or for any other substantial cause, it may allow such document to be produced, witness to be examined, affidavit to be filed and such evidence to be adduced.

Exception: ITAT during the rectification proceedings u/s 254(2) cannot allow additional evidence.

11

Additional grounds of appeal

Additional grounds will be accepted only if the CIT(A) is satisfied that omission of these grounds from the form of appeal was not willful or unreasonable.

ITAT may also permit additional grounds.

12

Powers

As per section 251, in disposing of an appeal, the CIT(A) shall have the following powers-

(a) in an appeal against an order of assessment, he may confirm, reduce, enhance or annul the assessment;

(aa) in an appeal against the order of assessment in respect of which the proceeding before the Settlement Commission abates under section 245HA, he may, confirm, reduce, enhance or annul the assessment;

(b) in an appeal against an order imposing a penalty, he may confirm or cancel such order or vary it so as either to enhance or to reduce the penalty;

(c) in any other case, he may pass such orders in the appeal as he thinks fit.

Note: The CIT(A) can enhance an assessment or a penalty or reduce refund only after giving appellant a reasonable opportunity.

In disposing of an appeal, the CIT(A) may consider and decide any matter arising out of the proceedings in which the order appealed against was passed, even though such matter was not raised before the CIT(A) by the appellant.

As per section 254, ITAT shall have the following powers-

He may, after giving both the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit.

He may with a view to rectifying any mistake apparent from the record, amend any order passed by it under section 254(1) at any time within six months from the end of the month in which the order was passed and shall make such amendment if the mistake is brought to its notice by the assessee or the AO:

Note: An amendment which has the effect of enhancing an assessment or reducing a refund or otherwise increasing the liability of the assessee, can be made after giving notice to the assessee of its intention to do so and has allowed the assessee a reasonable opportunity of being heard.

13

Disposal of appeal

Where it is possible, the CIT(A) shall dispose off the appeal within a period of one year from the end of the financial year in which appeal is filed.

Where it is possible, the ITAT shall dispose off the appeal within a period of four years from the end of the financial year in which appeal is filed. [Sec-254(2A)]

14

Vital case laws

If the law amended retrospectively during the pendency of the appeal, the amended law is to be applied by the authority deciding the appeal.
[CIT v. Straw Products Ltd. (1996) 60 ITR 156(SC)]

An assessee having filed an appeal, cannot withdraw it.

[CIT v. Rai Bahadur Hardutroy Motilal Chamaria (1967) 66 ITR 443 (SC)]

Power to allow additional evidence is discretionary power.
[Keshav Mills Co Ltd. V. CIT [1965] 56 ITR 365(SC)]

Jurisdiction of ITAT is confined to passing of orders on subject matters of an appeal i.e., those orders which are necessary for disposal of appeal.

[Marubeni India Pvt Ltd vs CIT (2010)195 TAXMAN 76 (Delhi)]

ITAT cannot take back benefit granted to assessee by AO.

[MCorp Global Pvt Ltd v, CIT [2009]178 TAXMAN347/309 ITR 434(SC)]

ITAT has the jurisdiction to allow a new question for the first time in appeal and in fairness it should allow such a question which can be decided on the facts already on record and no new facts are being brought in.

[National Thermal Power Co. Ltd v CIT (1998) 229 ITR 383(SC)]

Non consideration of a decision of jurisdictional High court or of Supreme court by ITAT is a ‘mistake apparent from record’ and therefore can be rectified by the Tribunal.

[Asstt. CIT v Saurashtra Kutch Stock Exchange Ltd (2008) 173 TAXMAN 322/305 ITR 227 (SC)]