Introduction

Under Direct Tax Laws, tax authorities have been given powers to make tax payers comply with their tax obligations and to investigate those who do not. Tax authorities have discretion to make ‘best judgement assessment’ and to pass orders as they ‘may think fit’ in the circumstances of the case. Exercise of such powers and discretion by tax authorities is likely to generate tax payer grievances on ground either that the tax authority misunderstood the law or incorrectly inferred facts or misapplied the law to the facts of the case. Grievance that the tax authority had not afforded a reasonable opportunity of hearing to the tax payer may also be voiced. In case of obvious or prime facie mistakes, the tax payer can approach the concerned authority for rectification of the order. Such mistakes may be as to facts as well as of law. The tax payer can also approach the Commissioner of Income-tax for revision of the orders of the authority administratively subordinate to him where he does not file appeal against this order. In order that the tax payers have confidence in the fair play, credibility and impartiality of the tax administration, Direct Tax laws have provided for independent appellate for independent appellate fora. ^Top

First appeal to commissioner (Appeals)

Any assessee aggrieved by the adjustments to the tax or interest in the intimation sent to him or by the order of assessment, penalty or rectification made by an Assessing (Appeals). Free at the following rate is payable for filing the appeal before Commissioner (Appeals) : Assessed total income Rs.1 lakh or less Rs.250/- Assessed total income more than Rs.1 lakh but not more than 2 lakh Rs.500/- Appeals involving total assessed income More than Rs.2 lakhs Rs.1000/- Appeals involving any other matter Rs.500/-

There is a prescribed from for filing the appeal (Form No.35). The form should be signed by the assessee. The grounds of appeal 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Once the appeal is filed, it can be withdrawn only with the permission of the Appellate Authority. Normally the assessee cannot file 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 additional evidence is given by the authority to the Assessing Officer.

Commissioner (Appeals) has power of enhancing the assessed income or penalty. Commissioner (Appeals) can remand a case to an Assessing Officer to enquire and furnish a report on specified matters.
Commissioner (Appeals) makes a reasoned order in writing after giving opportunity for hearing to the appellant and the Assessing Officer. Where possible, Commissioner (Appeals) will hear and decide appeal within a period of one year from the end of his financial year in which appeal is filed.

In respect of appeals under Wealth-tax Act to Commissioner (Appeals), fee of Rs.250/- is payable. Appeals is required to be filed in Form No.E of Wealth Tax Rules. APPEALS AGAINST ORDERS RELATING TO UNDISCLOSED INCOME FO

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Block period

In respect of search initiated on or after January 1, 1997, Commissioner 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 case second appeal will lie to the Tribunal. In case of block assessment in respect of search initiated after 30th June, 1995 and before 1st January, 1997, first appeal lie before the Tribunal.

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Second appeal to Appellate Tribual
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 or an order refusing to grant registration to a Charitable Trust made by Commissioner of Income-tax.

The appeal is required to be filed in the prescribed Form No.36. The Form under Wealth-tax Rules is Form No.F.

Fee at the following rate is payable for filing appeal before the Tribunal from 1st October, 1998;

Assessed total income is Rs.500/-

Rs.1 lakh or less

Assessed total income more than Rs.1500/-

Rs.1 lakh but less than Rs.2 lakhs

Assessed total income Rs.2 lakhs or more Rs.1% of assessed income

Subject to a maximum of Rs.10,000/-

Appeals under other Direct Rs.1000/-

Taxes Miscellaneous applications

U/s.254(2) Rs.50/-

Stay petitions Rs.500/-

Appeals involving any other matters Rs.500/-

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 paperbook containing the relevant orders and statements, 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 which consists of one Judicial Member and one Accountant Member hears and decides appeals. The more important case are heard by a bench of 3 or 5 members. The cases where the total income assessed does not exceeds one lakh rupees (with effect from 1st October, 1998 give lakhs rupees) may be heard and decided by a single Member.

Where possible, Tribunal will hear and decide appeal within a period of four years from the end of the financial year in which appeal is filed.

The Assessing Officer, not satisfied with the order of the first Appellate Authority, may also file an appeal with the Tribunal after necessary authorization to file such an appeal is received from the Commissioner. No fee is required to be paid for filing of appeal by the Department.

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.

With a view to check frivolous appeals, from 1June, 1999, Tribunal is empowered to award costs of appeal.

The Appellate Tribunal is under the administrative control of Ministry of Law.

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Reference to High Court

The Tribunal is the last fact finding authority under the Income-tax Act, 1961. The order of the Appellate Tribunal is final so far as facts are concerned. However, if a question of law arises out of the order of Tribunal and the tax payer is not satisfied with the decision of the Tribunal on the question of law, he can make an application to the Tribunal in the prescribed Form No. 37 to refer to question of law to the High Court for its opinion in respect of appellate orders passed by Tribunal before 1st October, 1998. The application should be accompanied by a fee of two hundred rupees. The application should be presented to the Tribunal within sixty days from the date of the tax payers is served with the Tribunal’s order. If the Tribunal refuses to state the case to the High Court under the I.T. Act, the assessee can within six months from the date he is served with the order of refusal (this period is 90 days for W.T. references) apply to the High Court for direction tot eh Tribunal to state the case and refer it to the High Court for its opinion. If the High Court so directed, the Tribunal shall refer the question of law to the High Court for its opinion. After the decision of High Court is received the Tribunal modifies its order in terms of the opinion given by the High Court. Where there is a conflict in the decision of High Courts in respect of any particular question of law arising from appellate order of Tribunal made before 1st October, 1998, the Appellate Tribunal may draw up a statement of case and refer it through its President direct to the Supreme Court for its opinion.

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Third appeal to the High Court
In respect of appellate orders passed by the Tribunal on or after 1st October, 1998, the assessee can file an appeal to the High Court if the case involves a substantial question of law. The appeal to High Court will lie not on any question of law but only in respect of a substantial question of law. The appeal to High Court will lie only, if the High Court is satisfied that the case involves a substantial question of law. The High Court will hear the appeal in respect of a substantial question of law which is formulated by the High Court.

The Memorandum of appeal before the High Court should state the substantial question of law involved in the case. The appeal to High Court is required to be filed within 120 days from the date on which the order appealed against is received by the appellant. The Memorandum of appeal should accompany the court fee for filing appeals to High Court.

The appeal will be heard by the High Court by a bench of not less than two judges and shall be decided by the majority of the judges.

Relevant provisions of Code of Civil Procedure shall apply mutates-muntandis to these appeals before High Court.

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