Appeal before the High Court
The High Court functions as the third appellate authority under the Income Tax Act. An appeal against the order passed by the Income Tax Appellate Tribunal (ITAT) lies before the High Court. However, such an appeal can be filed only when the High Court is satisfied that the case involves a substantial question of law.
- Filing of Appeal before the High Court
o An appeal may be filed by the PCCIT/CCIT/PCIT/CIT (“Commissioner”), or by the assessee aggrieved by the order passed by the ITAT.
o The appeal must relate to a matter involving a substantial question of law.
o The Department may file an appeal only in cases where the tax effect exceeds the monetary limits prescribed by the CBDT.
- Manner and Time Limit for Filing Appeal
o The appeal is to be filed as a Memorandum of Appeal, clearly stating the substantial question(s) of law involved in the case.
o Appeal to the High Court must be filed within 120 days from the date on which the order of ITAT is received by the Commissioner or assessee, as applicable.
o The High Court may condone delay in filing the appeal if it is satisfied that there was sufficient cause for not filing the appeal within the prescribed time.
- Formulation of Question of Law
o If the High Court is satisfied that a substantial question of law arises, it shall formulate the question(s) and the appeal shall be heard on such question(s) only.
o During the hearing, the respondent may argue that the case does not involve the stated question(s) of law.
o The Court may consider additional question(s) of law not formulated earlier, provided reasons for doing so are recorded.
o The High Court may also decide an issue not determined by ITAT, or correct a finding wrongly determined by ITAT due to an incorrect legal interpretation.
- Judgment by the High Court –The High Court shall render its decision on the question(s) of law and deliver a reasoned judgment. It may award such cost as it deems fit.
- Fees for Filing Appeal –The fee for filing an appeal before the High Court shall be governed by the relevant law relating to Court fees for filing of appeals to the High Court.
- Hearing by Division Bench
o Appeals before the High Court are heard by a bench of 2 or more judges.
o If judges differ in opinion, the matter is decided by the majority opinion.
o If there is no majority, the disputed point is referred to one or more additional judges and decided based on the majority of all judges who heard the case.
- Effect of High Court Judgment –The Assessing Officer shall give effect to the High Court’s decision on the basis of a certified copy of the judgment.