Income Tax Act

Official PDF pages 446–450

SOURCE PDF PAGE 446
( d )   `   250, where the subject matter of an appeal is not covered under clauses
( a ), ( b ) and ( c ).
(3) The appeal shall be presented within thirty days,—
( a )   from the date of service of the notice of demand where the appeal relates
to any assessment or penalty; or
( b )   in any other case, from the date on which intimation of the order sought
to be appealed against is served.
(4) For the purposes of sub-section (3)( a ), where an application made under section
440(1) is rejected, 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.
(5) The Joint Commissioner (Appeals) or the Commissioner (Appeals) may admit
an appeal after the expiration of the said period if he is satisfied that the appellant
had sufficient cause for not presenting it within that period.
(6) No appeal under this Chapter 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.
(7) The Joint Commissioner (Appeals) or the Commissioner (Appeals) may, for the
purposes of sub-section (6)( b ) and on an application made by the appellant in this
behalf, for reasons to be recorded in writing, exempt him from the operation of the
provisions of that sub-section.
Procedure in appeal.
359.   (1) The Joint Commissioner (Appeals) or 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.
(2) The following shall have the right to be heard at the hearing of the appeal:—
( a )   the appellant, either in person or by an authorised representative;
( b )   the Assessing Officer, either in person or by a representative.
(3) The Joint Commissioner (Appeals) or the Commissioner (Appeals) may—
( a )   adjourn the hearing of the appeal; or
( b )   make such further inquiry as he thinks fit, before disposing of any appeal,
or may direct the Assessing Officer to make further inquiry and report
the result of the same; or
( c )   allow the appellant to go into any ground of appeal not specified in the
grounds of appeal, if he is satisfied that the omission of that ground from
the form of appeal was not wilful or unreasonable.
(4) The order of the Joint Commissioner (Appeals) or the Commissioner (Appeals)
disposing of the appeal shall be in writing and shall state the points for determina -
tion, the decision thereon and the reasons for the decision.

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(5) The Joint Commissioner (Appeals) or the Commissioner (Appeals), where it
is possible, may hear and decide such appeal within one year from the end of the
financial year in which such appeal is filed or transferred to him under section 356.
(6) On the disposal of the appeal, the Joint Commissioner (Appeals) or the
Commissioner (Appeals) shall communicate the order passed by him to the
assessee and to the Principal Chief Commissioner or Chief Commissioner or
Principal Commissioner or Commissioner.
Powers of Joint Commissioner (Appeals) or Commissioner (Appeals).
360.   (1) In disposing of an appeal, the Commissioner (Appeals) or the Joint
Commissioner (Appeals), shall have the following powers:—
( a )   in an appeal against an order of assessment, he may confirm, reduce,
enhance or annul the assessment;
( b )   where such appeal is against an order of assessment made under section
271, the Commissioner (Appeals) may set aside the assessment and refer
the case back to the Assessing Officer for making a fresh assessment;
( c )   in an appeal against the order of assessment for which the proceeding
before the Settlement Commission abates under section 245HA of the
Income-tax Act, 1961 (43 of 1961), the Commissioner (Appeals) 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;
( d )   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;
( e )   in any other case, he may pass such orders in the appeal as he thinks fit.
(2) The Joint Commissioner (Appeals) or 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 enhance -
ment or reduction.
(3) The Joint Commissioner (Appeals) or the Commissioner (Appeals), may consider
and decide any matter arising out of the proceedings in which the order appealed
against was passed, irrespective of the fact that such matter was not raised before
him by the appellant.
2.—Appeals to Appellate Tribunal.
Appellate Tribunal.
361.   (1)   The   Central   Government   shall   constitute   an   Appellate   Tribunal
consisting of as many Judicial and Accountant Members as it thinks fit,
to exercise the powers and discharge the functions conferred on the Appellate
Tribunal by this Act.
(2) Irrespective of anything contained in this Act, the qualifications, appointment,
term of office, salaries and allowances, resignation, removal and the other terms
and conditions of service of the President, Vice-President and other Members of
the Appellate Tribunal appointed,—

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( a )   after the commencement of the Tribunals Reforms Act, 2021 (33 of 2021),
shall be governed by the provisions of Chapter II of the said Act;
( b )   before the commencement of Part XIV of Chapter VI of the Finance Act,
2017 (7 of 2017), shall be governed by the provisions of the Income-tax
Act, 1961 (43 of 1961) and the rules made thereunder, as if the provisions
of section 184 of the Finance Act, 2017 (7 of 2017) had not come into
force.
(3) The Central Government shall appoint—
( a )   a person who is a sitting or retired Judge of a High Court and who has
completed not less than seven years of service as a Judge in a High Court;
or
( b )   one of the Vice-Presidents of the Appellate Tribunal,
to be the President thereof.
(4) The Central Government may appoint one or more members of the Appellate
Tribunal to be the Vice-President or, Vice-Presidents thereof.
(5) The Vice-President shall exercise such of the powers and perform such of the
functions of the President as may be delegated to him by the President by a general
or special order in writing.
Appeals to Appellate Tribunal.
362.   (1) Any assessee, aggrieved by any of the following orders, may appeal   to
the Appellate Tribunal against such order—
( a )   an order passed under this Act, by a Commissioner (Appeals) or a Joint
Commissioner (Appeals); or
( b )   an order passed by a Principal Commissioner or Commissioner under—
( i )   section 332(7) or (8) or (9) or 351(2)( ii ) or 354(3); or
( ii )   section 377 or 439 or 465; or
( iii )   section 287 amending any order as referred to in sub-clauses ( i )
and ( ii ):
( c )   an order passed by a Principal Chief Commissioner or Chief Commis -
sioner or a Principal Director General or Director General or a Principal
Director or Director under section 377 or 465 or an order passed under
section 287 amending any such order; or
( d )   an order passed by an Assessing Officer under section 270(10) or 279, in
pursuance of the directions of the Dispute Resolution Panel or an order
passed under section 287 in respect of such order; or
( e )   an order passed by an Assessing Officer under section 270(10) or 279,
with the approval of the Principal Commissioner or Commissioner as
referred to in section 274(12)   or an order passed under section 287 or
288 in respect of such order; or
( f )   an order passed by an Assessing Officer under section 234(4).
(2) The Principal Commissioner or Commissioner may, if he objects to any order
passed by the Joint Commissioner (Appeals) or the Commissioner (Appeals) under
this Act, direct the Assessing Officer to appeal to the Appellate Tribunal against the
order.
(3) Every appeal under sub-section (1) or (2) shall be filed within two months from
the end of the month in which the order sought to be appealed against is commu -
nicated to the assessee or to the Principal Commissioner or Commissioner.

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(4) The Assessing Officer or the assessee, on receipt of notice that an appeal against
an order, has been preferred under sub-section (1) or (2) by the other party, may,
irrespective of that he may not have appealed against such order or any part thereof,
within thirty days of the receipt of the notice, file a memorandum of cross-objec -
tions, verified in the manner, as may be prescribed, against any part of such order,
and such memorandum shall be disposed of by the Appellate Tribunal as if it were
an appeal presented within the time specified in sub-section (3).
(5) The Appellate Tribunal may admit an appeal or permit the filing of a memorandum
of cross-objections after the expiry of the relevant period referred to in sub-section
(3) or (4), if it is satisfied that there was sufficient cause for not presenting it within
that period.
(6) An appeal to the Appellate Tribunal shall be in such form and verified in such
manner, as may be prescribed and shall, be accompanied by a fee of—
( a )   `   500, where the total income of the assessee as computed by the Assessing
Officer, in the case to which the appeal relates, is   `   100000 or less;
( b )   `   1500, where the total income of the assessee, computed as aforesaid,
in the case to which the appeal relates is more than   `   100000 but not
more than   `   200000;
( c )   an amount equal to 1% of the assessed income, subject to a maximum of
`   10000, where the total income of the assessee, computed as aforesaid,
in the case to which the appeal relates is more than   `   200000;
( d )   `   500, where the subject matter of an appeal relates to any matter, other
than those specified in clauses ( a ), ( b ) and ( c ).
(7) No fee shall be payable for an appeal referred to in sub-section (2), or a memo -
randum of cross objections referred to in sub-section (4).
(8) An application for stay of demand shall be accompanied by a fee of   `   500.
Orders of Appellate Tribunal.
363.   (1) The Appellate Tribunal may, after giving both the parties to the appeal, an
opportunity of being heard, pass such orders thereon as it thinks fit.
(2) The Appellate Tribunal may amend any order passed by it under sub-section (1)
for the rectification of any mistake apparent from record, within six months from
the end of the month in which the order was passed, if the mistake is brought to its
notice by the assessee or the Assessing Officer.
(3) An amendment, as referred to in sub-section (2), which has the effect of
enhancing an assessment or reducing a refund or otherwise increasing the liability
of the assessee, shall not be made, unless the assessee has been allowed a reasonable
opportunity of being heard.
(4) Any application filed by the assessee under sub-section (2) shall be accompanied
by a fee of   `   50.
(5) In every appeal, the Appellate Tribunal, where it is possible, may hear and
decide such appeal within four years from the end of the financial year in which
such appeal is filed under section 362(1) or (2).
(6) The Appellate Tribunal may, after considering the merits of the application made
by the assessee, pass an order of stay in any proceedings relating to an appeal filed

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under section 362(1), for a period not exceeding one hundred and eighty days from
the date of such order, subject to the condition that the assessee—
( a )   deposits not less than 20% of the amount of tax, interest, fee, penalty or
any other sum payable under this Act; or
( b )   furnishes security of equal amount as referred to in clause ( a ),
and the Appellate Tribunal shall dispose of the appeal within the said period of stay
specified in that order.
(7) No extension of stay, as referred to in sub-section (6), shall be granted by the
Appellate Tribunal, where such appeal is not so disposed of within the said period
of stay as specified in the order of stay passed under the said sub-section, unless—
( a )   the assessee makes an application and has complied with the condition
referred to in sub-section (6); and
( b )   the Appellate Tribunal is satisfied that the delay in disposing of the appeal
is not attributable to the assessee,
so, however, that the aggregate of the period of stay originally allowed and the
period of stay so extended shall not exceed three hundred and sixty-five days and
the Appellate Tribunal shall dispose of the appeal within the period or periods of
stay so extended or allowed.
(8) The order of stay shall stand vacated if the appeal is not disposed of within the
period allowed under sub-section (6) or (7), even if the delay in disposing of the
appeal is not attributable to the assessee.
(9) The cost of any appeal to the Appellate Tribunal shall be at the discretion of
that Tribunal.
70
[ (10) The Appellate Tribunal shall—
( a )   send a copy of any order passed under this section to the assessee; and
( b )   a copy of such order shall also be sent to the jurisdictional Principal Com -
missioner or Commissioner, electronically on the designated portal designed
by the Director General or Principal Director General and the provisions
relating to time limits under this Act for any appeal, reference, revision, or
otherwise, shall apply accordingly. ]
(11) Save as provided in section 365, orders passed by the Appellate Tribunal on
appeal shall be final.
Procedure of Appellate Tribunal.
364.   (1) The powers and functions of the Appellate Tribunal may be exercised and
discharged by Benches constituted by the President of the Appellate Tri -
bunal from among the members thereof.
(2) Subject to the provisions contained in sub-section (3), a Bench shall consist of
one Judicial Member and one accountant member.
(3) The President, or any other member of the Appellate Tribunal authorised in this
behalf by the Central Government, may sitting singly, dispose of any case allotted
to the Bench, pertaining to an assessee whose total income as computed by the
Assessing Officer in the case does not exceed rupees fifty lakh.
70.   Substituted by the Finance Act, 2026, w.e.f.   1-4-2026 . Prior to its substitution, sub-section
(10) read as under :
“(10) The Appellate Tribunal shall send a copy of any orders passed under this section to the
assessee and to the Principal Commissioner or Commissioner.”