Filing of Appeal under Income Tax Act

The term Appeal under Income Tax Act, 1961 can be defined to as an action in which a person refers a matter or litigation or case to higher appellate bodies or authorities against an order passed for the same matter by a lower authority or body.  It means complaining about a previous order or judgment from an appellate administrative authority that is alleged to be incorrect or erroneous to a higher authority.

Appeal under Income Tax Act

The Income Tax Act is complex in nature and often the different rules provided in it, usually creates a condition where the department and assesses are of different opinions about the same matter. Usually, assesses are not satisfied with the results of the tax assessment and order passed for the same by the income tax authority. In such cases the aggrieved taxpayer can always present their case before the prescribed authorities. These authorities are known as appellate authorities or appellate machinery.

Some facts related to Appeal under Income Tax Act are as follows-

  1. It is a statutory right: Under the Income Tax Act, ‘Right to Appeal’ is a statutory right and is not a natural right or inherent right of the taxpayer or assesses. It is being available to them because the same has been granted by the Act. It is a statutory right of assesses and the Central Board of Direct Taxes (CBDT) cannot deny the same through any issued order. The department can snatch away the right to appeal under Income Tax Act only through the express provisions provided in the act itself.
  2. Parties to an Appeal: The following two parties are involved in an appeal under Income Tax Act-
  • Appellant: The person who files an appeal is called an appellant or applicant.
  • Defendant or Respondent: The person against whom the appeal has been filed.

3.       Appellate Authorities to file Appeal under Income Tax Act: The various appellate authorities or bodies where the appeal can be filed are-

  • Income Tax Appellate Tribunal (ITAT)
  • Commissioner (Appeals)
  • High Court
  • National Tax Tribunal (NTT)
  • Supreme Court
  1. Appeal to the Commissioner (Appeals): Under Section 246(2) of the Income Tax Act, 1961, an aggrieved assesses can appeal under Income Tax Act, to the Commissioner (Appeal) against any order that have been made before or after the appointed date or day.
  2. As per the new Budget 2020, a new e-appeal system has been adopted for this assessment year by the Finance Ministry and the taxation authority.

Procedure of Appeal under Income Tax Act:

The procedure of appeal under Income Tax Act is stated in Section 250. The procedure is as per the following-

  1. Section 250(1): It states that Deputy Commissioner (Appeals) and Commissioner (Appeals) have to fix a day and place to hear the appeal. A notice about the same has to be sent to the appellant and to the Income Tax Officer whose order has been challenged in the appeal under Income Tax Act.
  2. Section 250(2): It states the person or authority having the right to hear the appeal under Income Tax Act. These are-
  • Assessing Officer who must be present in person or by a representative.
  • The Appellant who must be present in person or an authorized representative must be present for them.
  1. Section 250(3): It provides that the Commissioner (Appeals) have the power to adjourn any hearing of the appeal whenever it seems right.
  2. Section 250(4): It states that the Commissioner (Appeals) has to make further inquiries which they seem fit or appropriate before disposing off an appeal under Income Tax Act.
  3. Section 250(5): It provides that the Commissioner can allow the appellate to evaluate any ground of appeal that has not been specified by the act.
  4. Section 250(6): The order to dispose of the appeal under Income Tax Act must be in writing and should have all the validated points in it.
  5. Section 250(7): It states that when the appeal under Income Tax Act is disposed, the order must be passed to the commissioner as well as assesses.
Author: Anil Agrawal
EZYBIZ India Consulting LLP, New Delhi. The firm is business and tax consultancy firm providing consultancy in Taxation, Regulatory, Transfer pricing, Valuation, Corporate funding and Business set up matters. He may be reached at 9899217778 or