Appeal before the Commissioner (Appeals) AY 2026-27
- Appealable Orders before CIT(A) –The following orders are specifically appealable before CIT(A):
o Intimations under Section 143(1) where adjustments are objected to;
o Assessment orders under Sections 143(3), 144, 147, 150, 153A, or 158BC;
Note: Appeals cannot be filed against orders passed in pursuance of DRP directions or under GAAR.
o Orders under Section 92CD;
o Order for TDS/TCS matters, including intimations under Sections 200A, 206CB, 206C(6A), and orders under Section 201;
o Penalty orders under Chapter XXI, Section 158BFA(2) and Section 221;
o Rectification orders under Sections 154 or 155 that enhance liability or reduce refund.
o Other orders under Sections 239A, 163, 170(2)/(3), 171, 115VP, or 237;
o Order passed where the assessee has denied liability to be assessed under the Income-tax Act;
o Where the application to the DRC has not been allowed to proceed; or
o Order passed by an AO, other than a Deputy Commissioner, in cases directed by the Board considering the nature, complexity, or other relevant aspects.
- Transfer of Pending Appeals –Pending appeals may be transferred:
o From CIT(A) to JCIT(A), where filed against orders appealable to JCIT(A) and pending as on 01.04.2023.
o From JCIT(A) to CIT(A), if deemed appropriate by the Board or authorised income-tax authority.
In both cases, the appellant shall be given an opportunity of being reheard. The authority receiving the appeal may proceed from the stage it was before the transfer.
- Appeal Filing Process –Appeals must be filed electronically in Form 35 within 30 days from the date of service of the order or demand notice. The filing and disposal of appeals shall be governed by the Faceless Appeal Scheme, 2021, notified with effect from 28.12.2021. Appeals are disposed of electronically, without interface, except for serious fraud, major tax evasion, sensitive & search-related cases, and Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 or international tax cases.
- Procedure before CIT(A)
o Notices are issued to fix a hearing date and place.
o CIT(A) may adjourn hearings and conduct or direct enquiries.
o Additional grounds may be admitted if the omission was not willful or unreasonable.
o Orders must be in writing, stating points of determination, decisions, and reasons.
o Appeals should, if possible, be disposed of within 1 year from the end of the financial year in which the appeal was filed, and an order should be issued within 15 days of the last hearing.
- Priority Disposal of Appeal –The CBDT has issued guidelines [Office Letter F.No. 279/Misc./M-102/2021-ITJ, dated 07.03.2024] for priority/out-of-turn disposal of pending appeals at the level of CIT(A) in genuine and exceptional circumstances, which are given below:
o cases having demand exceeding Rs. 1 crore;
o cases where VIP/PMO references were received;
o cases with Court directions;
o cases where senior citizens/super senior citizens request;
o Other cases of genuine hardship.
Final approval for such disposal lies with Principal CCITs, CCITs, or DGITs based on recommendations of the jurisdictional Principal CIT or Principal CIT(Central) or CIT(IT).
- Communication of Order and Stay of Demand– CIT(A) shall communicate the order to both the assessee and the CCIT or CIT.
- Stay of Demand– the assessing officer can grant stay of demand till the disposal of appeal by CIT(A) if the assessee makes payment of 20% of the disputed demand [Office Memorandum No. 404/72/93-ITCC dated 29.02.2016].
- Right to be Heard and Filing of Additional Evidence– The assessee and AO have the right to be heard personally or through authorised representatives. Further, filing new evidence before CIT(A) is restricted unless specific exceptions are satisfied.
The CIT(A) must record written reasons for admitting any additional evidence. Before doing so, the CIT(A) shall provide the Assessing Officer an opportunity to examine or cross-examine the evidence or witness produced by the assessee or produce evidence or a witness in response.
- Power of CIT(A) –The Commissioner (Appeals) is vested with the following powers while disposing of an appeal. However, before enhancing an assessment or penalty or reducing a refund, a show-cause opportunity must be provided to the assessee:
o Relating to Assessment Order – CIT(A) may confirm, reduce, enhance, or annul the assessment. He cannot set aside the assessment or refer the case back to the Assessing Officer for fresh assessment except where an appeal is filed against an assessment order made under Section 144.
o Relating to Penalty Order – CIT(A) may confirm, cancel, increase, or reduce the penalty imposed.
o Relating to Other Matters – In any other appealable matter, CIT(A) may pass such order as deemed fit.
o Power to Levy Penalty – CIT(A) may impose penalty under the following provisions:
➢ Section 270A (under-reporting/misreporting of income)
➢ Section 271A (failure to maintain or retain books of account)
➢ Section 271AA (failure to maintain documentation for international transactions)
➢ Section 271AAB (undisclosed income detected during search)
➢ Section 271AAC (tax on undisclosed income)
➢ Section 271AAD (false or omitted entries)
➢ Section 271G (failure to furnish documents for international transactions)
➢ Section 271J (incorrect information in reports or certificates)
➢ Section 272A (failure to cooperate with tax authorities or file TDS/TCS statements)
o Power to Consider Additional Matters – CIT(A) may decide on any issue arising from the original proceedings, even if not raised by the appellant.
o Power to Admit Additional Evidence – CIT(A) may admit additional evidence under permitted circumstances. This does not restrict his powers to:
➢ Direct the production of documents or examination of witnesses; or
➢ Enhance, confirm, reduce, or annul the assessment or penalty order, either suo motu or at the Assessing Officer’s request.
- Faceless Appeal Scheme, 2021 [Notification No. 139/2021, dated 28-12-2021] –The Central Government is empowered to introduce a scheme for electronic filing and disposal of appeals by CIT(A) to enhance efficiency, transparency, and accountability by:
o Minimising physical interface during appellate proceedings;
o Optimising resource utilisation through scale and specialisation; and
o Implementing dynamic jurisdiction for appeal disposal.
In exercise of its powers, the CBDT initially notified the Faceless Appeal Scheme, 2020 for the electronic disposal of appeals by CIT(A). This scheme was later superseded by the Faceless Appeal Scheme, 2021, effective from 28-12-2021.