Procedure in appeal.

359(1)

The Joint Commissioner (Appeals) or the Commissioner (Appeals) shall fix a day and place for the hearing of the appeal, and shall give notice of the same to the appellant and to the Assessing Officer against whose order the appeal is preferred.

359(2) The following shall have the right to be heard at the hearing of the appeal:—

• (a) the appellant, either in person or by an authorised representative;
• (b) the Assessing Officer, either in person or by a representative.

359(3)

The Joint Commissioner (Appeals) or the Commissioner (Appeals) may––

• (a) adjourn the hearing of the appeal; or
• (b) make such further inquiry as he thinks fit, before disposing of any appeal, or may direct the Assessing Officer to make further inquiry and report the result of the same; or
• (c) allow the appellant to go into any ground of appeal not specified in the grounds of appeal, if he is satisfied that the omission of that ground from the form of appeal was not wilful or unreasonable.

359(4)

The order of the Joint Commissioner (Appeals) or the Commissioner (Appeals) disposing of the appeal shall be in writing and shall state the points for determination, the decision thereon and the reasons for the decision.

359(5)

The Joint Commissioner (Appeals) or the Commissioner (Appeals), where it is possible, may hear and decide such appeal within one year from the end of the financial year in which such appeal is filed or transferred to him under section 356.

359(6)

On the disposal of the appeal, the Joint Commissioner (Appeals) or the Commissioner (Appeals) shall communicate the order passed by him to the assessee and to the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner.

Explanation

Section Summary:

Section 359 outlines the procedural framework for handling appeals filed by taxpayers against orders passed by the Assessing Officer. It specifies the roles and responsibilities of the Joint Commissioner (Appeals) or Commissioner (Appeals) in managing the appeal process, including scheduling hearings, allowing representation, adjourning hearings, conducting inquiries, and issuing written orders. The section also sets a timeline for resolving appeals and mandates communication of the final order to relevant parties.

Key Changes:

1. Timeline for Disposal of Appeals: A new provision (359(5)) has been introduced, requiring the Joint Commissioner (Appeals) or Commissioner (Appeals) to dispose of appeals within one year from the end of the financial year in which the appeal is filed or transferred. This is a significant change aimed at reducing delays in the appeal process.
2. Flexibility in Grounds of Appeal: Subsection 359(3)(c) allows the appellate authority to consider additional grounds of appeal not initially specified, provided the omission was not intentional or unreasonable. This provides more flexibility to taxpayers.

Practical Implications:

1. Faster Resolution of Appeals: The one-year timeline for disposing of appeals (359(5)) ensures quicker resolution, reducing uncertainty for taxpayers and improving efficiency in the tax administration system.
2. Enhanced Flexibility for Taxpayers: Taxpayers can now raise additional grounds during the appeal process if they were omitted unintentionally, reducing the risk of losing valid arguments due to procedural errors.
3. Clear Communication of Orders: The requirement to communicate the final order to both the taxpayer and higher authorities (359(6)) ensures transparency and accountability in the appeal process.

Critical Concepts:

1. Authorised Representative: A person legally authorised to represent the taxpayer or the Assessing Officer during the appeal hearing. This could be a tax professional, lawyer, or other authorised individual.
2. Further Inquiry: The appellate authority has the power to conduct additional investigations or direct the Assessing Officer to do so before making a decision. This ensures a thorough review of the case.
3. Points for Determination: The written order must clearly state the issues under consideration, the decision on each issue, and the reasoning behind the decision (359(4)).

Compliance Steps:

1. Filing an Appeal: Ensure the appeal is filed within the prescribed time limit and includes all relevant grounds.
2. Preparation for Hearing: Gather all necessary documents and evidence to support the appeal. If represented, ensure the authorised representative is well-prepared.
3. Responding to Inquiries: If the appellate authority requests further inquiry, cooperate fully and provide any additional information or documentation required.
4. Reviewing the Order: Once the order is communicated, review it carefully to understand the decision and reasoning. If dissatisfied, consider further appeals as per the law.

Examples:

1. Scenario 1: A taxpayer files an appeal against an assessment order but forgets to include a specific ground related to disallowed expenses. During the hearing, the taxpayer requests to add this ground. The appellate authority, satisfied that the omission was not intentional, allows the taxpayer to raise the new ground and considers it in the decision.
2. Scenario 2: An appeal is filed in April 2023. The appellate authority schedules a hearing in June 2023 and disposes of the appeal by March 2024, adhering to the one-year timeline. The final order is communicated to both the taxpayer and the Chief Commissioner, ensuring transparency.

This section streamlines the appeal process, making it more efficient and taxpayer-friendly while maintaining accountability and transparency.