All about filing an appeal before CIT(A)

The Income-tax Act, 1961 allows tax payers to challenge the orders passed by the AO after the assessment proceedings. Concepts pertaining to the appeal that can be filed by the aggrieved assessee before the first appellate authority in the hierarchy of income tax appeals viz. Commissioner of Income Tax (Appeals)/Joint Commissioner of Income Tax (Appeals) (hereinafter called CIT(A)/JCIT(A)) are provided under sections 246 to 251 of the Income Tax Act. Here's an overview of filing appeal before CIT(A)/JCIT(A):

1. Who can File an Appeal

Any assessee aggrieved by an order passed by the Assessing Officer (AO) can file an appeal to the Commissioner (Appeals) or Joint Commissioner (Appeals).

2. Cases where an appeal can be filed before JCIT(A) i.e. appealable orders before JCIT(A) - Section 246

Any assessee aggrieved by any of the following orders of an AO (below the rank of Joint Commissioner) may file an appeal to Jt. Commissioner (Appeals) against:

• order of intimation issued under Section 143(1)/143(3)/144 where  the assessee objects to the amount of income assessed or tax determined or loss computed or status under which he is assessed;
• order of assessment, reassessment or recomputation u/s 147;
• order of intimation issued u/s 200A(1)/206CB(1) where the deductor/collector objects to making of adjustments;
• order passed u/s 201/206C(6A) deeming a person to be an assessee-in-default for failure to deduct/collect or pay any tax;
• order imposing penalty under Chapter XXI;
• order passed u/s 154/155 amending any of the orders mentioned above.

However, no appeal can be filed before JCIT (A), if any of the above orders are passed by or with the prior approval of an income tax authority above the rank of Deputy Commissioner.

3. Cases where an appeal can be filed before CIT(A) i.e. appealable orders before CIT(A) - Section 246A

Any assessee aggrieved by any of the following orders may file an appeal to Jt. Commissioner (Appeals) against:

• order passed by JC u/s 115VP(3)(ii), refusing to approve the option for tonnage tax scheme;
• order against the assessee where the assessee denies his liability to be assessed under this Act;
• order of intimation issued u/s 143(1)/200A(1)/206CB(1) where  the assessee/deductor/collector objects to making of adjustments;
• assessment order passed u/s 143(3) except in case of an order passed in pursuance of directions of the Dispute Resolution Panel;
• assessment order passed u/s 144 – Best Judgment Assessment;
• order of assessment, re-assessment or re-computation passed u/s 147, except an order passed in pursuance of directions of the Dispute Resolution Panel;
• rectification order passed u/s 154/ 155;
• order passed u/s 163 treating the assessee as agent of non-resident
• Order passed u/s 154/155 amending any of the orders mentioned above.
• Intimation issued under Section 143(1)/(1B) where adjustments have been made in income offered to tax in the return of income.
• Assessment order passed under Section 143(3) except in case of an order passed in pursuance of directions of the Dispute Resolution Panel.
• order passed u/s 201/206C(6A) deeming a person to be an assessee-in-default for failure to deduct/collect or pay any tax;
• refund order made u/s 237;
• order imposing penalty u/s 221;
• order imposing penalty under Chapter XXI.

4. Fees and form for filing Appeal - Section 249(1)

A person filing an appeal with the CIT(A)/JCIT(A) should pay the following appeal filing fee.

The form prescribed for filing an appeal is Form No. 35.

5. Time limit for filing appeal - Section 249(2) & (3)

An appeal should be presented within 30 days of the following date:

• Where the appeal relates to any assessment or penalty - the date of service of notice of demand relating to the assessment or penalty order.
• In any other case - the date on which intimation of the order sought to be appealed against is served.

However, CIT(A)/JCIT(A) may admit an appeal even after the expiry of 30 days, if he is satisfied that the appellant had sufficient cause for not presenting the appeal within the specified time.

6. Tax to be paid at the time of filing of appeal - Section 249(4)

No appeal shall be submitted before CIT(A)/JCIT(A), unless the following tax has been deposited by the assessee:

• in case where return has been filed – the amount of tax determined as per the return of income filed by the assessee
• in case where no return has been filed – an amount equal to the amount of advance tax payable by the assessee

However, CIT(A)/JCIT(A) may exempt an appellant from payment of tax if appropriate reason has been furnished for such non-payment before filing of appeal.

7. Documents to be submitted for Appeal

Appeal has to be filed online along with submissions of following documents:

• Online e-filing of Form 35
• One certified copy of order, appealed against.
• Notice of demand in original.
• Copy of challans of fees, the details of the challan (i.e., BSR code, date of payment of fee, serial number and amount of fee)

8. Procedure in Appeal - Section 250

• After receipt of Form no. 35, the CIT(A)/JCIT(A) shall fix a day and place for  hearing of the appeal, and shall give notice of the same to the appellant and to the AO.
• Both the appellant and the AO have the right to be heard at the hearing of the appeal either in person or by an authorized representative.
• CIT(A)/JCIT(A) has the power to adjourn the hearing of the appeal from time to time.
• CIT(A)/JCIT(A), before passing an order, may make such further enquiries as he thinks fit or direct the AO to make further enquiries and report the result of the same to him.
• CIT(A)/JCIT(A) may allow the appellant to go into any grounds of appeal not specified previously by the appeallant, if the he is satisfied that the omission of that ground was not wilful or unreasonable.
• CIT(A)/JCIT(A) may allow the appellant to submit additional evidence under Rule 46A. As mentioned in Rule 46A of the Act, an appellant shall be allowed to submit additional evidence before the CIT(A), other than that has already been produced before the AO during the assessment proceedings, only in the following circumstances-

• Where the Assessing Officer refused to admit the said evidence which ought to have been admitted; or
• Where appellant was prevented by sufficient cause from producing evidence called upon by the Assessing Officer; or
• Where the appellant was prevented by sufficient cause from producing before the Assessing Officer any evidence which is relevant to any ground of appeal; or
• Where Assessing Officer passed the impugned order without giving sufficient opportunity to the appellant to adduce evidence relevant to any ground of appeal.

9. Time limit and procedure of deciding appeal by CIT(A)/JCIT(A)

• Wherever it is possible, the CIT(A)/JCIT(A) may hear and decide such appeal within a period of 1 year from the end of the financial year in which such appeal is filed before him.
• The order of CIT(A)/JCIT(A) disposing the appeal shall be in writing and shall state the points for determination, the decision thereon and the reasons for the decision.
• On disposal of the appeal, the CIT(A)/JCIT(A) must communicate the order passed by him to the assessee as well as to the Principal Chief Commissioner/ Chief Commissioner/ Commissioner, as the case may be.
• None of the parties is eligible to file additional evidence before the ITAT. In case, the ITAT requires any document, affidavits or seeks to examine any witnesses, the ITAT may allow for the production of documents or examination of persons or other evidence.
• If the assessee or the department is not satisfied with the order passed by CIT(A)/JCIT(A), he can make a further appeal to ITAT.

10. Power of CIT(A)/JCIT(A) - Section 251

While disposing of an appeal, the CIT(A)/JCIT(A) is vested with the following powers:

• in an appeal against an order of assessment, he may confirm, reduce, enhance or annul the assessment.
• in an appeal against an order imposing a penalty, he may confirm or cancel such order or vary it in such a way as to enhance or reduce the penalty.
• in any other case, the CIT(A)/JCIT(A) may pass such orders as he deems fit.

However, the CIT(A)/JCIT(A) is not empowered to enhance an assessment or a penalty or to reduce a refund due to the assessee without giving the assessee a reasonable opportunity of showing cause against such an enhancement or reduction. 

11. Faceless appeal

In recent years, the tax department has introduced an e-appeal scheme in order to impart increased transparency, efficiency and accountability and reduce corruption by eliminating the human interface between the CIT(A)/JCIT(A) and the appellant in due course of appellate proceedings to the extent technologically possible, however, it would be compulsory for the CIT(A)/JCIT(A) to allow a personal hearing if requested for by the appellant.

Under this scheme, the entire assessment process shall be handled by the central authority viz. National Faceless Appeal Centre (hereinafter called the NFAC) which shall assign the appeal directly to a CIT(A)/JCIT(A) of the appeal unit. Thus, NFAC shall serve as the nodal agency between the Assessing Officer, the appellant, or any other person and the Appeal Units and all the communications amongst all of the aforesaid shall be exchanged exclusively by electronic mode. All the orders passed by the CIT(A)/JCIT(A) shall be digitally signed before the same being transmitted to NFAC for serving the same to the appellant.

An appellant shall be allowed to present his/her case before the CIT(A)/JCIT(A), on request for personal hearing. If the CIT(A) /JCIT(A) deems fit, he/she may fix the date and time of hearing to the appellant through the NFAC. Such hearing shall be conducted through video conferencing, in accordance with the procedure laid down by the Central Board of Direct Taxes (CBDT).

Thus, introduction of Faceless Appeal Scheme has helped in a great way to bring a vast reform in the whole litigation process, thereby making the appeal procedure all the more easy, reliable and efficient.

Conclusion

The entire appeal process depends upon the facts and circumstances of the case which vary concerning each appellant. The appellant must very carefully review the grounds of appeal before filing them for an appeal because these ground of appeals can’t change at higher levels.