Avoiding Repetitive Appeals by the Assessee
To reduce litigation and avoid repetitive appeals on the same question of law, the Income-tax Act provides a mechanism wherein an assessee can voluntarily submit a declaration, confirming that the issue pending in a later year is identical to one already contested in a previous year.
Upon acceptance of this declaration, the Assessing Officer (AO) or Appellate Authority can dispose of the later case without awaiting the final judicial outcome of the earlier one. The assessee forfeits the right to raise the same issue in any further appeal for the later year.
- When Can a Declaration be Filed?– A declaration can be submitted when:
o A question of law is already pending before the High Court or Supreme Court in relation to an earlier assessment year, and
o The same question of law arises in a subsequent assessment year before the Assessing Officer or the Appellate Authority.
- Purpose and Effect of Filing Declaration –By filing Form 8, the assessee agrees:
o That the final decision on the question of law in the earlier case shall also apply to the later case; and
o That no further appeal will be filed on the same question of law in a later year, if the AO or Appellate Authority accepts the claim.
- Procedure for Filing Declaration
o The declaration must be submitted electronically in Form 8;
o It must be verified by a person authorised to verify the return of income under Section 140.
- Report from Assessing Officer
o If the declaration is submitted before an Appellate Authority, it shall call for a report from the Assessing Officer to verify the correctness of the assessee’s claim.
o If the AO requests, an opportunity of hearing may be provided to him before the authority admits or rejects the claim.
- Order Accepting or Rejecting the Declaration –The Assessing Officer or Appellate Authority, as the case may be, shall pass a written order to either:
o Admit the claim, if satisfied that the question of law in the later year is identical to that in the earlier year; or
o Reject the claim if not satisfied.
Such order is final and cannot be challenged by way of appeal, revision, or reference.
- Consequences of Admission of Claim –Where the declaration is admitted:
o The AO or Appellate Authority shall dispose of the later case without waiting for the final decision in the earlier case;
o The assessee is barred from raising the same question of law in any subsequent appeal for that year.
- Application of Final Decision in Earlier Case –Once the decision in the earlier case becomes final:
o The AO or Appellate Authority shall apply that decision to the later case;
o If necessary, the earlier order passed in the later case shall be amended accordingly.