Appeal fees whether allowable or not

11736 views 11 replies

Whether fees for appeal paid under income tax or service tax allowable as deduction under income tax or not?

Replies (11)

APPEAL FEES ARE ALLOWABLE SINCE IT IS NOT INCURRED FOR ANY INFRACTION OF LAW AND LEGAL EXPENSES ARE ALLOWED TO BE DEDUCTED FROM P/G/B/P . IT IS A BUSINESS EXPENDITURE U/S 37(1)

i would beg to differ with Mr. Suahas since paymnt of income tax is specifically disallowed under IT act , i dnt think expenses incurred in relation to ascertainment of tax liability will be allowed either. Sec 37(1) allows legal expenses which are incurred for matters incidental to business, but appeal fees is not incidental to business. Thus, what needs to be checked is the source in regard to which the expense is incurred. I may be wrong, but this is what i feel. Thanks

i agree with souvik....

Appeals was done only when any show cause notice or any demand is made that means the company is in default , so in such case expenditure incured by the company is not allowed, but in case the company is not in guilty than expenses can be allowed.

I dont agree with CS bijoy

Appeals are mad when the assessee is eager to appeal against the tax demand raised by authorities,so there is no connection between the default made & appeal filed.Even when the assessee is correct on the question of fact raised,demand is raised, so the assessee has the right to file an appeal.

I agree that IT paid is disallowed for Individuals but it is allowed for Firms and Companies..

Yes it is allowed as deduction but not interest on penalties paid thereon

but appeal fees does not come under interest or penalty category..

According to my view, Fee paid for Income-Tax appeal is allowed on the following grounds:-
1.Nowhere in the head of Profit and Gain from Business and Profession is written, which specifically prohibits or disallows IT appeal fee like interest and penalty on Income Tax,TDS and Wealth Tax.
2. No Judicial decision found in this matter.
3. It is not incurred for any infraction of law and legal expenses are allowed to be deducted from Profit and Gain from Business and Profession, hence it can be allowed as a business expenditure u/s 37(1).

 

If payment is made in connection to the contravention of law, then such kind of payments is not allowable as deduction, such as penalty. But appeal is a right of assessee (being an aggreived party) as per the Income tax act , hence payment made in connection to fee related to appeals is allowed as a deduction u/s 37(1). 

So IT appeal expenses are allowed?? And IT paid is disallowed??

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
ARTICLESHIP 04 June 2026
Article

Rakhecha & Co.

New Delhi

CA Inter

View Details
Company
Featured 15 June 2026
Senior Auditor

N. Dhawan & Co

New Delhi

CA Inter

View Details
Company
24 June 2026
Chartered Accountant

CA Darshita Shah & Co

Nadiad

CA

View Details
Company
ARTICLESHIP 09 June 2026
Article Trainee

Numbertree LLP

Mumbai

CA Inter

View Details
Company
16 June 2026
Sr. Associate / Assistant Manager | TAS / FDD

Boutique Investment Bank & Transaction Advisory Firm

Gurgaon

CA

View Details
Company
ARTICLESHIP 30 June 2026
Taxation Content Writer Intern

Interactive Media Pvt Ltd.

New Delhi

CA Inter

View Details
Company
25 June 2026
AUDIT MANAGER

JDAS & ASSOCIATES

New Delhi

CA

View Details
Company
Featured 24 June 2026
HEAD - AUDIT AND TAXATION

A R JADHAV AND ASSOCIATES

Mumbai

CA Inter

View Details