An appeal is a process by which a judgement/order of a subordinate authority is challenged before its higher authority. It implies a complaint to a higher authority against the order or judgement of an administrative or appellate authority. At times it may happen that the assessee is aggrieved by an order issued by the Assessing Officer. An Assessing Officer (hereinafter called the AO) is a key figure in the tax system, who is primarily responsible for ensuring that the assessee has declared his/her income correctly and calculated the tax liability accordingly. Also, the AO has the power to investigate cases of suspected tax evasion and raise tax demand and further impose penalties wherever needed.
In such cases the assessee may file an appeal against the order of the AO before the Commissioner of Income-tax (Appeals) or Joint Commissioner (Appeals) and further before the Income Tax Appellate Tribunal (ITAT) if aggrieved by the order of the Commissioner of Income-tax (Appeals) or Joint Commissioner (Appeals) and so on.
Note: The Finance Act 2023 introduced a new designated income tax authority of Joint Commissioner (Appeals) [JCIT (Appeals)] vide amendment in section 246 to handle a certain class of cases prescribed, involving small appeal disputes. The Scheme shall be applicable to such persons or class of persons covered under section 246 of the Income-tax Act.
To implement the functioning of the JCIT (Appeals), the Central Board of Direct Taxes (CBDT) has rolled out e-Appeals Scheme, 2023. The Scheme enlists the scope, procedure to be adopted, penalty proceedings, rectification proceedings, and other provisions to ease the implementation.
The Scheme clarifies that a person shall not be required to appear either personally or through an authorised representative in connection with any proceedings under this Scheme. However, a request for a personal hearing can be made, which can be conducted through video conferencing or video telephony.
The Income-tax Act, 1961 (hereinafter called the Act) provides various recourses to the tax payer to challenge the orders passed by the AO after the assessment proceedings. Concepts pertaining to the appeal/petition 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) or Joint Commissioner (Appeals) (hereinafter called CIT(A)/JCIT(A)) are significant to understand.
Section 246A of the Act lists out the orders passed by various Income-tax Authorities against which an aggrieved assessee can file an appeal before the first appellate authority i.e., the CIT(A)/JCIT(A). Some of the major orders have been listed below:
As per Section 249(2) of the Act, appeal should be presented within 30 days of the following date:
Exceptions: The delay in filing the appeal may be condoned by the CIT(A)/JCIT(A) in certain genuine cases, if the appellant submits an application for condonation of delay, citing out reasons for the same along with corroborative evidences and an affidavit signed by the appellant confirming the condonation.
Appeal filing fees depends upon the total income determined by the AO in the assessment order which is as follows –
| Income determined by AO | Fees (Rs.) |
| Less than or equal to Rs. 1 lakh | 250 |
| More than Rs. 1 lakh but less than Rs. 2 lakhs | 500 |
| More than Rs. 2 lakhs | 1,000 |
| Any other case (e.g.: Appeal against penalty orders) | 250 |
The appellant is required to pay the tax determined as per the return of income filed by him, before filing an appeal. If no return of income has been filed, then an amount equal to the amount of advance tax payable by the assessee should be paid.
Exception: The CIT(A)/JCIT(A) may exempt the appellant from payment of tax if appropriate reason has been furnished by the same for such non-payment before filing of appeal.
The CIT(A)/JCIT(A) shall dispose of the appeal by passing an order whereby decision on each of the grounds of appeal shall be separately mentioned along with reasons for the same.
The CIT(A)/JCIT(A) shall decide in the following ways under different circumstances which are explained as below:
| Reason for Appeal | Disposition of Appeal |
| Appeal against assessment order passed by the AO (including assessment in respect of which proceedings before the Settlement Commission abates). | CIT(A)/JCIT(A) may confirm, reduce, enhance or annul the assessment. |
| Appeal against penalty order. | CIT(A)/JCIT(A) may confirm, reduce or enhance the penalty. |
The CIT(A)/JCIT(A) shall before enhancing any assessment or penalty, provide a reasonable opportunity to the assessee to present his case against such enhancement. Also, the CIT(A)/JCIT(A) while disposing off an appeal, may consider and decide any matter arising out of the assessment proceedings, even though such matter was not raised by the assessee before the CIT(A)/JCIT(A).
Where it is possible, the CIT(A)/JCIT(A) shall dispose of the appeal within a period of one year from the end of financial year in which the appeal is filed and the respective order shall be issued within a period of 15 days of last hearing.
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:
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.
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. Understanding all the procedures pertaining to filing of appeal before the CIT(A)/JCIT(A) as well as the powers possessed by an appellant and the CIT/JCIT (Appeals), that can be exercised as and when required during the appeal proceedings would facilitate the appellant while he/she is going through the hassle of filing an appeal. .
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