The first appeal against the order of Assessing Officer shall lie to the Commissioner (Appeals) and it can be filed by the assessee only.
(A) Appealable Orders before Commissioner (Appeals) [Section 246A]:
Any assessee or any deductor or any collector aggrieved by any of the following orders, may appeal to the Commissioner (Appeals) against—
(a) an order passed by the Joint Commissioner under section 115VP(3)(ii) refusing to approve the option of tonnage scheme in case of a company operating ships; or
(b) an order of assessment under section 115WE(3) or section 115WF, where the assessee. being an employer objects to the value of fringe benefits assessed;
(c) an order against the assessee, where the assessee denies his liability to be assessed under this Act; or
(d) an intimation under section 143(1) or (1B) or section 200A(1) or section 206CB(1) where the assessee or the deductor or the collector objects to the making of adjustments in return of income or statement of TDS or TCS. as the case may be.
(e) any order of assessment under section 143(3) (except an order passed in pursuance of
directions of the Dispute Resolution Panel) or 144, where the assessee objects:
(i) to the income assessed, or
(ii) to the amount of tax determined, or
(iii) to the amount of loss computed, or
(iv) to the status under which he is assessed;
(f) an order of assessment, reassessment or re-computation under section 147 (except an order passed in pursuance of directions of the Dispute Resolution Panel) or section 150;
(g) an order of assessment or reassessment under section l53A (except an order passed in pursuance of directions of the Dispute Resolution Panel) consequent upon any search conducted or books of account requisitioned;
(h) any order of assessment or reassessment under section 92CD( 3) relating to an order passed by the Assessing Officer on modified return filed in accordance with and limited to the advance pricing agreement;
(i) an order of rectification made under section 154 or order under section 155 having the effect of:
(i) enhancing the assessment, or
(ii) reducing a refund, or
(iii) order refusing to allow the claim made by the assessee under either of these sections;
(j) an order under section 163 treating the assessee as the agent of a non-resident;
(k) an order under section 170(2) or (3) relating to assessment on successor when the predecessor cannot be found or recovery of tax of the predecessor from the successor in case of succession to business otherwise than on death;
(l) an order under section 171 refusing to recognize partition of a IIUF;
(m) an order under section 201 treating the assessee deemed to be assessee in default for failure to deduct the whole or any part of the tax or pay tax after deduction;
(n) an order made under section 206C(6A) treating the assessee deemed to be assessee in default for failure to collect the whole or any part of the tax or after collecting, fails to pay the tax as required by or under this Act;
(o) an order under section 237 relating to refunds;
(p) an order imposing penalty under sections 221, 271, 271A, 271AAA, 271AAB, 271B, 271GA, 271F, 271FB, 272AA, 272BB or an order imposing or enhancing penalty under section 275(1A);
(q) an order made by Joint Commissioner imposing a penalty under sections 271C, 271CA, 271D. 271E and 272AA;
(r) an order of Joint Commissioner / Joint Director imposing a penalty under section 272A;
(s) an order imposing a penalty under Chapter XXI i.e. under sections 270 to 275;
(t) an order of assessment made by an Assessing Officer under clause (c) of section 1 58BC Le. Block Assessment, in respect of search initiated under section 132 or books of account, other documents or any asset requisitioned under section 132A, on or after 1.1.1997;
(u) an order imposing a penalty under section 158BFA(2) for concealment of income in case of Block Assessment;
(v) an order made by an Assessing Officer other than a Joint Commissioner under the provisions of this Act in the case of such person or class of persons, as the Board may, having regard to the nature of the cases, the complexities involved and other relevant considerations direct.
(B) Appeal by person denying liability to deduct tax [Section 248] :
Where under an agreement or other arrangement, the tax deductible on any income, other than interest, under section 195 is to be borne by the person by whom the income is payable, and such person having paid such tax to the credit of the Central Government, claims that no tax was required to be deducted on such income, he may appeal to the Commissioner (Appeals) for a declaration that no tax was deductible on such income.
(C) Form of appeal and limitation [Section 249 and Rules 45 and 46]
As per section 249(1), an appeal to the Commissioner (Appeal) shall be in the prescribed form and shall be verified the prescribed manner.
(A) Form of appeal to Commissioner (Appeal) (Rule 45]:
1. Form [Rule 45(1)]:
An appeal to the Commissioner (Appeals) shall be made in Form No. 35.
2. Manner of furnishing the appeal [Rule 45(2)]:
Form No. 35 shall be furnished in the following manner, namely:
(a) in the case of a person who is required to furnish return of income electronically under rule 12(3).—
(I) by furnishing the form electronically under digital signature, if the return of income is furnished under digital signature;
(ii) by furnishing the form electronically through electronic verification code in a case not covered under sub-clause (i);
(b) in a case where the assessee has the option to furnish the return of income in paper form, by furnishing the form electronically in accordance with clause (a) of rule 45(2) or in paper form.
3. Verification of appeal [Rule 45(3)]:
The form of appeal referred to in rule 45(l), shall be verified by the person who is authorised to verify the return of income under section 140 of the Act, as applicable to the assessee.
4. Manner of furnishing the accompanying document [Rule 45(4)]:
Any document accompanying Form No. 35 shall be furnished in the manner in which the said form is furnished.
5. Procedure for filing appeal to be specified [Rule 45(5)]:
The Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems), as the case may be, shall—
(i) specify the procedure for electronic filing of Form No. 35 and documents;
(ii) specify the data structure, standards and manner of generation of electronic verification code, referred to in rule 45(2), for the purpose of verification of the person furnishing the said form; and
(iii) be responsible for formulating and implementing appropriate security, archival and retrieval of policies in relation to the said form so furnished.
6. Fee for filing appeal [Section 249(1)]:
Form 35 shall be accompanied by a fee as under:
Where the total income / loss of the assessee as computed by the A.O. in the case to which appeal relates is Rs. 1,00,000 or less
Where the total income / loss of the assessee, computed as aforesaid in the case to which appeal relates exceeds Rs. 1,00,000 but does not exceed Rs. 2,00,000
Where total income / loss of the assessee, computed as aforesaid in the case to which appeal relates exceeds Rs. 2,00,000
Where the subject matter of appeal relates to any matter other than specified in clauses (a), (b) and (c) above
The fee should be credited in a branch of the authorised bank or a branch of the State Bank of India or a branch of the Reserve Bank of India after obtaining a challan from the Assessing Officer and a copy of challan sent to the Commissioner of Income-tax (Appeals).
(B) Time limit for filing appeal [Section 249(2)]:
The appeal should be presented within a period of 30 days of—
(a) the date of payment of tar, where appeal is under section 248; or
(b) the date of service of notice of demand relating to assessment or penalty if the appeal relates to assessment or penalty; or
However, where an application has been made under section 270AA (1), the period beginning from the date on which the application is made, to the date on which the order rejecting the application is served on the assessee, shall be excluded. [Proviso inserted by the Finance Act, 20 16, w.e.f. 1.4.2017]
(c) the date on which intimation or the order sought to be appealed against is served if it relates to any other cases.
Exclusion of lime for calculating lime limit for filing appeal [Section 268]:
For this purpose, the date on which the order complained of is served is to be excluded. Further, if the assessee was not furnished with a copy of the order when the notice of the order (say notice of demand) was served upon him then the time required for obtaining a copy of the order should be excluded, i.e. period taken for obtaining the order shall be added to the time limit of 30 days.
(C) Condonation of delay in filing appeal [Section 249(3)]:
The Commissioner (Appeals) may admit an appeal after the expiration of the prescribed period, if he is satisfied that the appellant had sufficient cause for not presenting it within that period.
(D) Amount of tax payable before filing appeal [Section 249(4)]:
No appeal shall be admitted unless at the time of filing of the appeal:
(a) where a return has been filed by the assessee, the assessee has paid the tax due on the income returned by him: or
(b) where no return has been filed by the assessee, the assessee has paid an amount equal to the amount of advance tax which was payable by him. i.e. tax which is payable on income assessed under section 144 or 147.
However, where no return has been filed by the assessee, the Commissioner (Appeals) on an application made by the assessee, may, for any good and sufficient reason to be recorded in writing, exempt him from the payment of such tax.
(D) Procedure in Hearing Appeal [Section 250]:
(i) The Commissioner (Appeals) shall fix a day and place for the hearing of the appeal and shall give notice of the same to the appellant and to the Assessing Officer against whose order the appeal is preferred.
(ii) The following persons shall have a right of being heard at the hearing of the appeal:—
(a) the appellant, either in person or through authorised representative
(b) the Assessing Officer, either in person or through a representative.
(iii) The appellate authority shall have the power to adjourn the hearing of the appeal from time to
(iv) The appellate authority may, before disposing off any appeal, make such further inquiry as he thinks fit and may direct the Assessing Officer to do so and report the same.
(v) The appellate authority may, at the hearing of the appeal, allow the appellant to go into any ground of appeal not specified in the grounds of appeal, if he is satisfied that omission of such ground of appeal was not willful or unreasonable.
(vi) The order of the appellate authority disposing off the appeal shall be in writing and shall state the points for determination, the decision thereon and the reason for the decision.
(vii) The order passed by the Commissioner (Appeals) shall be communicated to the assessee and to the Commissioner of Income Tax.
(E) Powers of the Commissioner (Appeals) [Section 251]:
In disposing off an appeal, the Commissioner (Appeals), shall have the following powers:
(i) in an appeal against an order of assessment, he may confirm, reduce, enhance or annul the assessment; or
(ii) in an appeal against the order of assessment in respect of which the proceeding before the Settlement Commission abates under section 245HA, he may, after taking into consideration all the material and other information produced by the assessee before, or the results of the inquiry held or evidence recorded by, the Settlement Commission, in the course of the proceeding before it and such other material as may be brought on his record, confirm, reduce, enhance or annul the assessment; or
(iii) 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;
(iv) in any other case — he may pass such orders in the appeal as he thinks fit.
The Commissioner (Appeals) shall not enhance an assessment or a penalty or reduce the amount of refund unless the appellant has had a reasonable opportunity of showing cause against such enhancement or reduction.
(F) Stay of disputed demand [Section 220(6)]:
Although an appeal can be filed by the assessee after depositing the tax due on the returned income, but the Assessing Officer normally continue with the recovery proceedings of the tax, demanded as per notice of demand. In such cases the assessee who has presented an appeal against such order can apply to the Assessing Officer for stay of the disputed demand. Where an assessee has presented an appeal under section 246A, the Assessing Officer may, in his discretion, and subject to such conditions as he may think fit to impose in the circumstances of the case, treat the assessee as not being in default in respect of the amount in dispute in the appeal, even though the time for payment has expired, as long as such appeal remains undisposed of.