Form of appeal and limitation.
358(1)
Every appeal under this Chapter shall be in such form and verified in such manner, as prescribed.
358(2)
An appeal, referred in sub-section (1), made to the Commissioner (Appeals) or to the Joint Commissioner (Appeals), shall be accompanied by a fee of-
- (a) two hundred and fifty rupees, where the total income of the assessee as computed by the Assessing Officer in the case to which the appeal relates is one lakh rupees or less;
- (b) five hundred, where the total income of the assessee, computed as aforesaid, in the case to which the appeal relates is more than one lakh rupees but not more than two lakh rupees;
- (c) one thousand rupees, where the total income of the assessee, computed as aforesaid, in the case to which the appeal relates is more than two lakh rupees;
- (d) two hundred and fifty rupees, where the subject matter of an appeal is not covered under clauses (a), (b) and (c).
358(3)
The appeal shall be presented within thirty days,––
- (a) from the date of service of the notice of demand where the appeal relates to any assessment or penalty; or
- (b) in any other case, from the date on which intimation of the order sought to be appealed against is served.
358(4)
For the purposes of sub-section (3)(a), where an application has been made under section 440(1), the period beginning from the date on which the application is made, to the date on which the order rejecting the application is served on the assessee, shall be excluded.
358(5)
The Joint Commissioner (Appeals) or the Commissioner (Appeals) may admit an appeal after the expiration of the said period if he is satisfied that the appellant had sufficient cause for not presenting it within that period.
358(6)
No appeal under this Chapter shall be admitted unless at the time of filing of the appeal,—
- (a) where a return has been filed by the assessee, the assessee has paid the tax due on the income returned by him; or
- (b) where no return has been filed by the assessee, the assessee has paid an amount equal to the amount of advance tax which was payable by him.
358(7)
The Joint Commissioner (Appeals) or the Commissioner (Appeals) may, for the purposes of sub-section (6)(b) and on an application made by the appellant in this behalf, for reasons to be recorded in writing, exempt him from the operation of the provisions of that sub-section.
Section Summary:
Section 358 of the Income Tax Act outlines the procedural requirements for filing an appeal against an assessment or penalty order. It specifies the form, fees, timelines, and conditions under which an appeal can be filed with the Commissioner (Appeals) or Joint Commissioner (Appeals). The section also provides flexibility for late appeals under certain conditions and mandates payment of tax dues before filing an appeal.
Key Changes:
- Fee Structure for Appeals: The section introduces a tiered fee structure based on the assessee's total income as computed by the Assessing Officer. This replaces any previous flat fee structure.
- Timeline for Filing Appeals: The appeal must be filed within 30 days from the date of service of the notice of demand or intimation of the order, with specific exclusions for delays caused by certain applications.
- Pre-Appeal Tax Payment: A new condition requires the assessee to pay the tax due on the returned income (or advance tax, if no return is filed) before filing an appeal.
- Discretion for Late Appeals: The Commissioner (Appeals) or Joint Commissioner (Appeals) can admit late appeals if the appellant provides sufficient cause for the delay.
Practical Implications:
For Taxpayers:
- Taxpayers must ensure they pay the applicable appeal fee based on their computed income.
- They must file appeals within 30 days of receiving the notice of demand or order intimation, unless they have a valid reason for delay.
- Taxpayers must pay the tax due on their returned income (or advance tax, if no return is filed) before filing an appeal, unless exempted by the Commissioner.
For Businesses:
- Businesses must maintain accurate records of tax payments and demand notices to comply with the pre-appeal tax payment requirement.
- They should be prepared to justify any delays in filing appeals to avoid rejection.
For Compliance Processes:
- Tax authorities must verify the payment of tax dues and appeal fees before admitting an appeal.
- They have the discretion to admit late appeals if the appellant provides sufficient cause.
Critical Concepts:
- Notice of Demand: A formal communication from the tax department specifying the amount of tax, interest, or penalty payable by the taxpayer.
- Advance Tax: Tax paid in advance during the financial year, based on estimated income, rather than at the end of the year.
- Sufficient Cause: A valid reason for delay in filing an appeal, such as illness, natural calamities, or other unavoidable circumstances.
Compliance Steps:
Determine Applicable Fee:
- Calculate the total income as computed by the Assessing Officer.
- Pay the appropriate appeal fee based on the income slab (₹250, ₹500, ₹1,000, or ₹250 for other cases).
File Within 30 Days:
- File the appeal within 30 days of receiving the notice of demand or order intimation.
- If delayed, provide a valid reason for the delay when submitting the appeal.
Pay Tax Dues:
- Pay the tax due on the returned income (or advance tax, if no return is filed) before filing the appeal.
- If unable to pay, apply for exemption under Section 358(7) with valid reasons.
Submit Required Documents:
- Ensure the appeal form is correctly filled and verified.
- Attach proof of tax payment and appeal fee payment.
Examples:
Example 1:
- A taxpayer with a computed income of ₹1.5 lakh receives a notice of demand. They must pay an appeal fee of ₹500 and file the appeal within 30 days. They must also pay the tax due on their returned income before filing.
Example 2:
- A business misses the 30-day appeal deadline due to a natural disaster. They can request the Commissioner (Appeals) to admit the late appeal by providing evidence of the disaster as a sufficient cause for delay.
Example 3:
- A taxpayer who has not filed a return but is appealing a penalty order must pay an amount equal to the advance tax payable before filing the appeal, unless exempted by the Commissioner.
This section ensures a structured and disciplined approach to filing appeals while balancing taxpayer rights and administrative efficiency.