Income Tax Appellate Tribunal (ITAT) is a quasi-judicial body established under the Indian Laws which acts as an authority where appeals can be filed by the aggrieved persons against the orders of the income tax authorities. The appeal is primarily filed by a taxpayer in case he is not satisfied with the assessment order by the income tax authorities or against any other order passed by the income tax authorities or Commissioner of income-tax (appeals) as the case may be. Similarly, the authorities under the Income Tax Act can also file an appeal before the Income Tax Appellate Tribunal against the order passed by the Commissioner of Income Tax (appeals).
Nature and Structure of ITAT
The Central Government of India, under the Income Tax Act of 1961, has established a quasi-judicial body to deal with the matters under the Act. Ministry of Law and Justice supervises the functioning of the ITAT. In order to meet the jurisdictional requirements, the ITAT has different benches throughout the country. The bench of the ITAT is constituted by the President of the ITAT amongst the members of the ITAT. Each bench shall consist of a technical member who shall be an expert in dealing with the matters of accounts/finance and a judicial member. However, if required, the President can constitute a bench comprising three or more members to dispose of the appeals wherein one member shall be from the accounts background, and the member shall be a judicial member. The ITAT acts as the final authority, and its decision regarding factual matters is final.
Functions of the ITAT
Income Tax Appellate Tribunal acts as the second forum where the aggrieved parties can take their grievances. The first forum is the Commissioner of Income-tax (Appeals). The ITAT is supervised by jurisdictional high courts, and it is subordinate to the high courts. The ITAT is bound to follow the precedents set by the jurisdictional High Court and Supreme Court, meaning that ITAT is bound to follow the law laid down by the jurisdictional High Court in a matter dealing with appeal.
Orders against which Appeal lies to Income Tax Appellate Tribunal
The appeal shall lie to ITAT from the following orders:
- Orders passed by the Commissioner of Income Tax (Appeals) [CIT(A)].
- Orders passed by the jurisdictional Commissioner.
- Orders passed by the Assessing Officer as per the directions of the Dispute Resolution Panel.
- Orders passed by the Assessing Officer.
- Penalty order passed by the Commissioner.
- Application for stay of tax demands.
- Other miscellaneous applications for recall of orders.
The pecuniary jurisdiction of the Income Tax Appellate Tribunal
The Central Board of Direct Taxes (CBDT) has the power to issue necessary orders, instructions or directions to the income-tax authorities. The CBDT also has the power to determine the pecuniary jurisdiction of the ITAT to regulate the filing of appeals or applications for references to the ITAT, jurisdictional High Court or Supreme Court. The CBDT has issued certain instructions, such as instruction no. 17/2019, dated 8 August 2019, has fixed the pecuniary limits for the purpose of filing appeals by or against the income tax department before the ITAT, High Courts or Supreme Courts as follows. But the above notifications was revised again in 2024, and now the new pecuniary jurisdiction of ITAT, High Courts and Supreme Courts is given below:-
- For Income Tax Appellate Tribunal (ITAT): ₹60 lakh.
- For High Courts: ₹2 crore.
- For Supreme Court: ₹5 crore.
These limits are set with respect to the tax effect in a particular case. ‘Tax effect’ refers to the difference between the tax on the assessed income and tax on the income without the assessment adjustments, which is also called the returned income. It is the duty of the Assessing officer to determine the ‘tax effect’ for a taxpayer for every assessment year. Though the above limits are the pecuniary jurisdiction of ITAT when dealing with an appeal, one should always consider the merits of his/her appeal before filing it before the ITAT.
Procedure to File an Appeal before the ITAT
The appeal before the ITAT should be filed using the prescribed forms as mentioned in the rules. Form No. 36 shall be filed in triplicate. The appeal should be submitted in the form of a paper book, which shall consist of the following:-
- Two copies of the order were appealed against, with one certified copy.
- Two copies of the order of the Assessing Officer.
- Two copies of the grounds of appeal were submitted earlier before the first appellate authority, the CIT(A).
- Two copies of the Statement of Facts were provided before the CIT(A).
- Two copies of the assessment order in a case where the appeal is against a penalty order.
- Two copies of the directions of the Joint Commissioner where the appeal is against an assessment order passed according to instructions of the Joint Commissioner.
- Two copies of the original assessment order where the appeal is against a reassessment order passed under section 147.
- A copy of the ITAT fee paid challan.
- Two copies of the submissions, documents and papers, as submitted earlier during the income-tax proceedings or before the CIT(A).
- Two copies of any other documents or facts the appellant wishes to provide.
Appeal Filing Fees
The appeal filed before the ITAT shall be accompanied by a filing fee. The fee amount is not fixed. Rather, it depends upon the income of the person as assessed by the Assessing Officer. The income does not include the effect of the order passed by the CIT(A). Below is the fee mentioned for filing of the Appeal:-
- If the total income assessed < than Rs 1 lakh, the filing fee would be Rs.500
- If the total income estimated is > Rs 1 lakh but < Rs.2 lakh the filing fee would be Rs.1,500
- Total income assessed > Rs 2 lakh then the filing fee would be 1% of the total income assessed not exceeding Rs.10,000
However, if in case the appeal is related to any other matter, then the filing fee shall be Rs. 500. In case an application for a stay of a demand is also filed along with the appeal, then the appeal filing fee would be Rs. 500. The date of hearing shall be fixed by the ITAT, and it will notify both the parties about such date. The respondent in such appeal shall also receive a copy of the memorandum of appeal, and the notice of such appeal may also be received before receiving such memorandum.
Limitation for Filing an Appeal
The limitation period to file an appeal is 60 days from the date of communication of the order to the party, which is the subject matter of the appeal.
Filing Memorandum of Cross-Objections
The limitation period for filing the memorandum of cross-objections by the Respondent is 30 days from the date of the receiving of the notice issued by the ITAT. The form prescribed for the purpose of filing the memorandum of cross objection is Form No. 36A. The law does not require the memorandum of cross to be accompanied by any fees. However, if the memorandum of cross is filed beyond the period of 30 days, the ITAT may condone such delay depending upon the sufficiency of cause with regard to such delay.
Representation Before the ITAT
The representation before the ITAT on behalf of the appellant and the respondent can be done by any person authorized by them to appear on their behalf. As per the Section 28 of the income Tax Act, 1961 any person can act as the authorized representative of the parties. Section 288 of the Income tax Act provides a list of the persons who can act as the authorized representative. However, a taxpayer cannot seek representation in cases of a personal examination on oath.
Presentation of Evidence
The ITAT does not permit any of the party to file an additional evidence before it. In case of requirement of any additional document or affidavit or of a person for cross examination of any witness by the ITAT, ITAT may allow such request.
Orders by the ITAT
The ITAT hears the appeal filed before it and passes the order, deciding the appeal in its finality. In case of the parties’ non-appearance on the dates fixed for the hearing of the appeal, the ITAT may continue the hearing ex parte and decide the matter. In case the matter is decided ex-parte and the party appears before the ITAT and provides sufficient cause for non-appearing, the ITAT may set aside the ex-parte order. Generally, the bench consisting of an technical member and judicial member passes the order, However, if the matter is of importance, the President of the ITAT has the power to constitute a special bench consisting of three or more members, with at least one technical member and one judicial member. In case of a difference of opinion among the members, the majority’s opinion shall prevail, and in case of a bench comprising two members, the difference of opinion shall be settled by the President.
