Quick answer
An appeal to the Commissioner (Appeals) is filed online in Form 35 within 30 days of the service of the notice of demand or order, with a fee of Rs 250 to Rs 1,000 and with the tax on the returned income paid. Every appeal is now routed through the National Faceless Appeal Centre under the Faceless Appeal Scheme, 2021, with hearings by video conference on request. The statement of facts and the grounds of appeal in Form 35 decide the appeal more than anything filed later, because additional grounds and additional evidence are admitted only on conditions.
Section 246A lists the orders an assessee may appeal to the Commissioner (Appeals): an intimation under section 143(1) where the assessee objects to the adjustments, an assessment order under section 143(3) or 144, a reassessment order under section 147, an order under section 154 or 155, an order imposing penalty under Chapter XXI (including sections 270A and 271 series), an order under section 201 treating a deductor as an assessee in default, and several others. An order that is not in the list — a notice, a show-cause or a rejection of a stay application — is not appealable and is challenged, if at all, by writ.
Since the Finance Act, 2023, a Joint Commissioner (Appeals) hears specified categories of smaller appeals; the procedure below is the same before both authorities.
The appeal must be presented within 30 days of the date of service of the notice of demand relating to the assessment or penalty, or the date on which the intimation of the order is served, or, in the case of tax deducted at source under sections 195 and 200, the date of payment of the tax. The Commissioner (Appeals) may admit an appeal after the period if satisfied the appellant had sufficient cause (section 249(3)); the application for condonation, with an affidavit explaining the delay day by day, is filed with Form 35, and the merits of the appeal weigh in favour of condonation.
| Assessed income | Fee under section 249(1) |
|---|---|
| Up to Rs 1,00,000 | Rs 250 |
| Rs 1,00,001 to Rs 2,00,000 | Rs 500 |
| Above Rs 2,00,000 | Rs 1,000 |
| Any other case (penalty, TDS and similar orders) | Rs 250 |
Under section 249(4) the appeal is not admitted unless the tax due on the returned income has been paid, or, where no return was filed, an amount equal to the advance tax payable; the Commissioner (Appeals) may exempt the no-return case for good and sufficient reason, but not the returned-income case. Paying the admitted tax before filing is therefore not optional.
Form 35 is filed on the e-filing portal, verified by digital signature or EVC, and has four parts that matter:
The grounds should cover every addition and every consequential point — interest under sections 234A, 234B and 234C, the initiation of penalty, the credit for taxes paid — because an issue not raised in the grounds can be taken later only with the Commissioner's leave.
Every appeal is allocated by the National Faceless Appeal Centre to an appeal unit, and all communication is through the e-filing account. The appeal unit may call for further information, the Assessing Officer's report and a remand report; the appellant is given the report and an opportunity to respond. A personal hearing through video conference is to be allowed when requested, and a request should be made as soon as the first notice is received, with a written submission filed in advance. Written submissions should be structured ground by ground, with an index of the documents relied on and page references to the paper book.
The Commissioner (Appeals) may allow an additional ground not specified in Form 35 if satisfied the omission was not wilful or unreasonable (section 250(5)), and the Supreme Court in Jute Corporation of India Ltd v. CIT (1991) 187 ITR 688 held that a bona fide legal ground going to the correct assessment of income may be admitted. Additional evidence is admitted only in the four situations of Rule 46A — refusal by the officer to admit it, prevention by sufficient cause from producing it, inability to produce evidence relevant to a ground, or an order passed without sufficient opportunity — and only after the officer has had a chance to examine it. A remand report is the usual route.
The Commissioner (Appeals) may confirm, reduce, enhance or annul the assessment, and may enhance a penalty, but not without giving the appellant a reasonable opportunity of showing cause against the enhancement (section 251(2)). Enhancement is confined to matters arising out of the assessment proceedings; it cannot reach a new source of income not considered by the officer.
Filing an appeal does not stay the demand. A stay application is made to the Assessing Officer under section 220(6) as soon as the appeal is filed, citing the appeal number. Under the Central Board of Direct Taxes' office memorandum of 31 July 2017 the officer ordinarily grants stay on payment of 20% of the disputed demand, and may accept less where the addition is covered by a decision in the assessee's favour or the issue is identical to an earlier year decided for the assessee. Refusal or coercive recovery without disposing of the application is open to writ.
The Commissioner (Appeals) is to dispose of the appeal, where possible, within one year from the end of the financial year in which it was filed (section 250(6A)). The order must state the points for determination, the decision and the reasons (section 250(6)); an order that merely reproduces the assessment order is itself a ground before the Tribunal.
An appeal against the Commissioner's order lies to the Income Tax Appellate Tribunal in Form 36 within 60 days, with a fee under section 253(6) of Rs 500 where the assessed income is up to Rs 1,00,000, Rs 1,500 up to Rs 5,00,000, and 1% of the assessed income subject to a maximum of Rs 10,000 above that; Rs 500 in other cases. Cross-objections by the respondent are filed in Form 36A within 30 days of receiving notice of the appeal. The Tribunal is the final fact-finding authority, so the paper book should carry every document the appeal turns on.
Thirty days from the date of service of the notice of demand or the order (section 249(2)). Delay can be condoned under section 249(3) on sufficient cause shown by affidavit.
Rs 250 where the assessed income is up to Rs 1,00,000, Rs 500 up to Rs 2,00,000, Rs 1,000 above Rs 2,00,000, and Rs 250 for any other order such as a penalty or TDS order (section 249(1)).
You must pay the tax due on the income you returned (section 249(4)); the disputed demand itself is not a pre-condition. Stay of the balance is sought from the Assessing Officer under section 220(6), ordinarily on payment of 20% of the disputed demand.
Only in the situations listed in Rule 46A — refusal by the officer to admit it, sufficient cause preventing production, evidence relevant to a ground that could not be produced, or an order passed without adequate opportunity — and after the Assessing Officer has examined it, usually through a remand report.
No physical hearing. A hearing through video conference is allowed on request under the Faceless Appeal Scheme, 2021; written submissions and the paper book are uploaded through the e-filing account.