Income Tax Appellate Tribunal: Functions, Procedure To File An Appeal And More

Income Tax

After tribunalisation in India emerged, the Government of India constituted a body, the ITAT, on January 25 1941. The full form of ITAT is the Income Tax Appellate Tribunal. Its formation took place under Section 5A of the Income Tax Act 1922. Keep reading this article to know more about this institution, its function, and its role.  

What Is the Nature and Structure of an ITAT?

Income Tax Appellate Tribunal is a quasi-judicial body introduced by the Government of India. This body works under the Ministry of Law and Justice. It has several benches in many locations; each branch has a regional jurisdiction. 

The bench at ITAT is formed by the president and other members of this institution. Each bench has an accountant member and a judicial member. 

Here, the president of ITAT or any other member is eligible to dispose of any appeal when the total income tax of an assessee as calculated by an IT officer is less than Rs. 50 lakh. Moreover, if a situation arises, the appellate tribunal holds the power to constitute a bench containing three members. Among them, there must be a judicial member and an accountant member. 

Also, remember the decision taken by an appellate tribunal is irrevocable when it concerns factual matters. 

What Are the Functions of an ITAT?

Here are the main functions of an appellate tribunal:

• An ITAT looks into the appeal that the Internal Revenue Service orders.
• The second forum that considers income tax appeals is the Commissioner of Income Tax (Appeals). 
• An ITAT acts as the subordinate of a particular region’s High Court and adheres to the rules of the latter. 
• Similarly, an ITAT also has to follow the rules of the Supreme Court. 

Which Orders Are Appealable Before Appellate Tribunal?

These orders are appealable before an Income Tax Appellate Tribunal:

• Orders passed by Commissioner of Income Tax (Appeals) [CIT(A)] /Jurisdictional Commissioner/Assessing Officer under Dispute Resolution Panel/Assessing officer 
• Penalty order issued by the commissioner 
• Applications demanding a stay of tax
• Other applications for recall orders 

Also Read: Section 194B Of The Income Tax Act: Provisions And TDS

Know About Monetary Limits Applicable for Filing Appeals 

The Central Board of Direct Taxes (CBDT) is the body that sets the monetary limit applicable for filing an appeal. Moreover, according to instruction no.  17 / 2019 of CBDT, here is the breakup that denotes the extent of monetary terms during an appeal:

Conditions:

• This monetary limit is only applicable for tax effect cases in particular. 
• An assessing officer must determine a taxpayer’s tax effect for a particular assessment year. 
• In case assessees face disputes in multiple assessment years, they can file an appeal for such assessment years or years containing tax effect problems exceeding the monetary limit mentioned above. 

What Is the Process of Filing An Appeal?

One should follow these steps to file an appeal with Income Tax Appellate Tribunal:

Step 1: Get Form No.36 for filing an appeal. Fill it like a paper book and provide documents as required under the appellate assessment order. 

Step 2: Fill in the page numbers and carry indexation of the paper book at least a day before your hearing. Then submit it along with supporting proofs. 

Step 3: Next, the bench will pardon any delay and consider the paper book. However, each paper book must be certified as a true copy. 

Step 4: Hearing is scheduled for the next day and on another day if adjourned. 

Step 5: In case of non-appearance of the appellant or the authorised representative at the scheduled hearing, the Tribunal will dispose of their appeal on the merits hearing of the respondent. 

Step 6: However, in case an appellant appears afterwards and provides a valid reason for absence during the hearing, the Tribunal may reconsider the ex-parte order and restore the appeal. 

How Much Is the Charge for Filing An Appeal?

These are the fees a person has to pay while filing an appeal:

• For persons with a total income of less than Rs. 1 lakh: Rs. 500
• For persons whose total income ranges from Rs. 1 lakh to Rs. 2 lakh: Rs. 1,500
• For persons with a total income of more than Rs. 2 lakh: 1% of the revenue with a maximum limit of Rs. 10,000. 

What Is the Time Limit to File An Appeal?

The maximum time allotted to a person up to which they can file an appeal after the date of communication of issuing an order is 60 days. 

Points to Note While Filing Memorandum of Cross-Objections

Make sure you are aware of these points while filing a memorandum of cross-objection:

• After receiving notice, there is a 30-day time limit to file a memorandum of cross-objection with an ITAT.
• The application form for filing cross-objection is Form No. 36A.
• In this type of filing, no fee is charged.
• An ITAT may consider accepting delayed files depending on situations and facts. 

Representation before an ITAT

The Appellant and respondent can look for representation from an authorised figure to appear before an appellant. This authorised person must come under Section 288 of the Income Tax Act. However, one cannot avail of this service if an oath or personal examination is carried out in the hearing. 

Points to Know about Presentation of Evidence

No party can present additional evidence in front of an appellate tribunal. However, if an ITAT seeks personal examination, affidavit, or other documents, they may allow for additional production of documents. 

Important Things to Know about ITAT Order

Here are some important things to know about orders issued by ITAT:

• The bench of ITAT passes an order after hearing the appeal.
• In cases where bench members’ opinions differ, the decision of the majority prevails. 
• If the view is divided among members equally, then whatever the president hears and declares will be the final call. 

Also Read: How To Save Income Tax Under Various Sections Of The Income Tax Act

Final Word

The work of an Income Tax Appellate Tribunal is vital for the advancement of other appellate tribunals. Go through the above sections to clearly understand their roles and functions. 

FAQs On Income Tax Appellate Tribunal

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This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information, and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.