Chapter 16: Appeals, Revision & Dispute Remedies
1. Complete Appellate Hierarchy & Limitation Timelines
| Appellate Authority | Filing Time Limit | Form Number | Jurisdictional Scope |
|---|---|---|---|
| CIT (Appeals) / JCIT (Appeals) | 30 Days from service of notice of demand or order | Form 35 | First appellate authority. Can confirm, reduce, enhance, or annul assessment. Cannot set aside order for fresh assessment. |
| Income Tax Appellate Tribunal (ITAT) | 60 Days from date of receipt of CIT(A) order | Form 36 | Final fact-finding authority. Decides on questions of fact and law. Can remand / set aside matter. |
| High Court (Section 260A) | 120 Days from receipt of ITAT order | Memo of Appeal | Admitted ONLY on a Substantial Question of Law (No appeal on pure questions of fact). |
| Supreme Court (Section 261) | 90 days (under Article 136 SLP) | Special Leave Petition / Civil Appeal | Final constitutional court of India. |
2. Stay of Demand & 20% Pre-Deposit Rule
• Before CIT(Appeals): AO can grant stay of demand pending appeal before CIT(A) subject to mandatory pre-deposit of 20% of the disputed demand.
• Lower Pre-deposit: Assessee can approach Pr. CIT for waiver or deposit < 20% if extreme financial hardship or undisputed high-pitch assessment.
• Before ITAT: ITAT may grant stay for up to 180 days subject to condition that assessee deposits not less than 20% of tax/interest/penalty or furnishes security. Total extended stay cannot exceed 365 days.
• Lower Pre-deposit: Assessee can approach Pr. CIT for waiver or deposit < 20% if extreme financial hardship or undisputed high-pitch assessment.
• Before ITAT: ITAT may grant stay for up to 180 days subject to condition that assessee deposits not less than 20% of tax/interest/penalty or furnishes security. Total extended stay cannot exceed 365 days.
3. Section 263: Revision Prejudicial to Interest of Revenue
Pr. CIT / CIT may call for and examine the record of any proceeding, and pass an order revising the assessment order IF:
- The order passed by the Assessing Officer is Erroneous, AND
- The order is Prejudicial to the interests of the revenue.
Limitation Period u/s 263:
Order must be passed within 2 years from the end of the financial year in which the order sought to be revised was passed by the AO.
Doctrine of Partial Merger: Section 263 applies only to issues that were NOT considered and decided in an appeal before CIT(Appeals).
Order must be passed within 2 years from the end of the financial year in which the order sought to be revised was passed by the AO.
Doctrine of Partial Merger: Section 263 applies only to issues that were NOT considered and decided in an appeal before CIT(Appeals).
4. Section 264: Revision in Favor of Assessee
| Parameter | Statutory Condition under Section 264 |
|---|---|
| Trigger | On application by assessee or suo motu by Pr. CIT / CIT. |
| Limitation for Application | Within 1 year from the date on which the order was communicated. |
| Order Passing Deadline | Pr. CIT must pass order within 1 year from end of FY of application. |
| Bar on Revision | Cannot be revised if appeal lies to CIT(A) and time has not expired, or appeal is pending before CIT(A), or order has been made subject of appeal to ITAT. |
5. High-Frequency Exam Traps
Trap 1: CIT(A) has power to enhance assessment!
While hearing an appeal, CIT(A) can enhance an assessment or penalty, but only after giving the appellant a reasonable opportunity of showing cause against such enhancement!
While hearing an appeal, CIT(A) can enhance an assessment or penalty, but only after giving the appellant a reasonable opportunity of showing cause against such enhancement!
Trap 2: High Court cannot re-appreciate facts!
ITAT is the final authority on facts. High Court will NOT entertain an appeal on findings of fact unless the finding is perverse or unsupported by any evidence on record.
ITAT is the final authority on facts. High Court will NOT entertain an appeal on findings of fact unless the finding is perverse or unsupported by any evidence on record.