The Commissioner of Income-tax (Appeals) is the first appellate authority. Section 246A specifies the orders against which an appeal can be filed before the Commissioner of Income-tax (Appeals). Appeal can be filed before Commissioner (Appeals), when a tax payer is adversely affected by Orders as under passed by various Income tax authorities, a list of such few orders are as under –
√ Intimation issued under Section 143(1) making adjustments to the returned income
√ Scrutiny assessment order u/s 143(3) or an ex-parte assessment order u/s 144, to object to income determined or loss assessed or tax determined or status under which assessed
√ Re-assessment order passed after reopening the assessment u/s 147/150
√ Search assessment order u/s 153A or 158BC
√ Rectification Order u/s 154/155
√ Order u/ s 163 treating the taxpayer as agent of a non resident
Every appeal to the Commissioner (Appeals) is to be filed in Form No. 35 online. Form 35 contains basic information like name and address of taxpayer, Permanent Account Number (PAN), assessment year, details of the order against which appeal is filed etc. Along with that, Grounds of Appeal & Statements of Facts have to be furnished covering brief facts and ground of appeal of the case. Let’s understand the same point-wise as follows:–
√ Check whether order is appealable u/s 246A.
√ Examine the section under which order is passed.
√ Examine Pros and Cons of going into appeal.
√ Check order is Incorrect/wrong, bad in law, against natural justice, un-justice, violating case law/section , not a speaking order
√ Amount of demand involved (Notice of demand u/s.156)
√ Check the Tax Calculation and if found wrong, file rectification u/s 154.
√ Read order passed by AO again and again very carefully to find out the points for grounds of appeal.
√ Arrange all the notices issued/received from AO date wise and prepare an Excel Sheet.
√ Check whether any notice/order serviced is barred by limitation.
√ Whether all permissions/approvals required for issuing particular notice has been obtained.
√ Whether reasons are recorded before reopening assessment
√ Whether statutory notice has been issued before making Assessment.g. 143(2) notice has been issued before making scrutiny Assessment.
√ Whether reasonable opportunity of being heard is given in your case (e.g. given only 2-3 days to reply)
√ Whether any of the Notice issued by AO remained unanswered (you couldn’t respond)
√ Whether you failed to present/reply particular notice/part of notice on prescribed date.
√ Prepare a date wise excel sheet of all the replies submitted against order appealable
√ Check whether all replies given by assessee had been considered by AO while framing assessment.
√ Make a flow chart of all the notices & replies filed during assessment proceedings date wise.
√ Whether you failed to answer any queries or to provide any information during assessment proceedings.
√ Whether the AO has given you a opportunity to cross examine the statement recorded
√ Whether demand order is in prescribed format (Form No.7)
√ Whether amount demanded against assessment order has been correctly calculated.
√ Whether interest on tax u/s 234A, 234B & 234C has correctly applied.
√ Whether Credit has been given for all prepaid taxes, TDS, TCS.etc
√ Write down the GIST/important points mentioned by AO in Assessment order.
√ Note whether any particular any case law favouring revenue has been mentioned in assessment order.(Find opposite case law favouring taxpayer)
√ Pen down all the documents, information, statements, paper not filed during assessment proceedings to prepare additional evidence under rule 46A.
√ Note down the date of service of notice of demand very carefully because it will decide the date upto which appeal is to be filed or filling stay application under section220(6) of income tax act. (30 Days)
√ E-filing Login id and password of applicant
√ DSC (Digital Signature Certificate) if required of applicant
√ Copy of original order passed
√ Copy of notice of demand
√ Copy of computation sheet of amount demanded
√ Copy of Challan of appeal fees
√ Complete scanned file of assessment proceedings/documents as discussed above
|ASSESSED TOTAL INCOME (IN RS.)||FEE (IN RS.)|
√ In case of loss or negative income, appeal fees is to be paid Rs.250/-.
√ In case of other appeals like penalty order, TDS, Trust approval etc Rs.250/-
√ An appeal fee has to be deposited through ITNS Challan 280 (Income tax) under the head Self Assessment Code 300 and in amount column others is to be selected.
√ ITNS 281- in case of TDS appeal
√ Summarised brief facts/story of the case is to be mentioned here
√ There is no prescribed format/order for drafting of Statement of facts.
√ Check tenability of order from judicial angle.
√ The Statement of facts should have facts only and not the law points.
√ Facts should be clear and should not be in argumentative form.
√ Facts should contain only those facts which are relevant and directly or indirectly connected with the additions made in the assessment order.
√ The facts should comprehensive and complete
√ The facts should also cover those facts which are not considered by AO.
√ Statement of facts is first and last window to produce statements of facts, at ITAT no statement of facts is permitted to be filed.
√ All factual mistakes ,errors , incorrect information of AO must be specifically mentioned
√ Violation of principle of natural justice must be specifically and separately brought out
√ Correct Email & communication address to be given
√ There is no specific format for drafting of grounds of appeals.
√ Grounds of appeal is to be divided into two parts:-
1. Grounds of law point
2. Grounds on merit
√ Grounds of appeal should be precise, comprehensive, clear and consecutively numbered
√ Grounds should not be general in nature
√ It should highlight the main controversy in issue
√ Grounds of Appeal in order of additions made in assessment order.
√ Separate ground for each addition must be taken.
√ Judicial decision favouring your ground must specifically be stated by quoting full details of relevant decisions and authority passing such decision.
√ Must mention the applicant reserves his right to alter, add, amend, withdrew any ground during appellate proceedings.
√ Statement of Facts should not be mixed with statements of Ground.
√ Errors in computation of tax, where ever applicable must be specifically and separately taken.
√ Separate ground on initiation of penalty is not required as the same is premature in nature. However suggested to mention here.
√ There is no prescribed format for additional evidence under rule 46A
√ Any evidence, reports or other materials which could substantiate appellant claim must be filed.
√ Rule 46A prescribed the circumstances under which additional evidence can be produced before CIT(A).
√ For justice and reasonable cause the additional evidence prayed to be admitted.
√ The additional evidence prayed to be admitted under the principle of equity, natural justice and fair play. Otherwise it would be un-justice.
√ The prayer must highlight how the additional evidence can change the colour of entire matter/case.
√ The delay beyond 30 days can be condoned on reasonable cause by CIT(A)
√ There is no prescribed format for filing application of condonation of delay
√ The condonation application must justify the period of delay.
√ The justification should not be general it should be supported by documentary evidence.(e.g. outside India, Hospitalised)
√ The cause should be reasonable or sufficient cause which is beyond the control of appellant.
√ A notarized affidavit can also be filed in support of your cause beyond the control of appellant.
√ There is no prescribed format for filing application of stay of tax demand u/s 220(6) of Income Tax act.
√ The application is to be made before AO having jurisdiction
√ Give the proof to AO that the appeal is pending CIT(A) and we are hopeful for favourable decision.
√ Demand is arbitrary or incorrect, rectification application has already been filed and pending with AO.
√ Additions made by AO has increased our tax liability many times.
√ Demand raised is against the Board guidelines.(e.g. deposit 20% demand only for appeals)
√ Stay of demand can be granted as per board guidelines ,instructions , circulars , clarification.etc
√ Give reference to instruction no.1914 dated 2-12-1993
√ Financial crunch or bad impact on business.
√ Must give reference of rectification application u/s 154 of income tax act already been filed for correction of mistake appeal from record.
√ Good conduct and lawful cooperation of the appellant with Tax Authority also brought into writing.
√ How financial difficulties, genuine hardship and irreparable loss would be cause to the appellant if the tax is to be recovered immediately.
√ Personal opportunity of being heard is to be availed or prayed if CIT(A) is not satisfied with written submissions.
√ Try to present your case entirely without leaving anything unclear & most humbly.
√ Try to understand your CIT(A) and explain him all the points where he/she seems to be in confusion.
√ If anything is missing from file, request the CIT(A) to remand the case back to the AO for want of additional information.
√ CIT(A) has power to enhance the assessment.
√ If enhancement notice has been issued, represent your case before CIT(A) Why enhancement is not justified. (Show cause)
√ If stay of demand has not granted and it has adversely effected your financials, Request your CIT(A) for early hearing of case and its disposal.
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