Income Tax 2025

Appearance

Appeals to Appellate Tribunal. ​

361(1) ​

The Central Government shall constitute an Appellate Tribunal consisting of as many Judicial and Accountant Members as it thinks fit, to exercise the powers and discharge the functions conferred on the Appellate Tribunal by this Act.

361(2) ​

Irrespective of anything contained in this Act, the qualifications, appointment, term of office, salaries and allowances, resignation, removal and the other terms and conditions of service of the President, Vice-President and other Members of the Appellate Tribunal appointed,––

  • (a) after the commencement of the Tribunals Reforms Act, 2021, shall be governed by the provisions of Chapter II of the said Act;
  • (b) before the commencement of Part XIV of Chapter VI of the Finance Act, 2017, shall be governed by the provisions of the Income-tax Act, 1961 and the rules made thereunder, as if the provisions of section 184 of the Finance Act, 2017 had not come into force.

361(3) ​

The Central Government shall appoint—

  • (a) a person who is a sitting or retired Judge of a High Court and who has completed not less than seven years of service as a Judge in a High Court; or
  • (b) one of the Vice-Presidents of the Appellate Tribunal, to be the President thereof.

361(4) ​

The Central Government may appoint one or more members of the Appellate Tribunal to be the Vice-President or, Vice-Presidents thereof.

361(4) ​

The Vice-President shall exercise such of the powers and perform such of the functions of the President as may be delegated to him by the President by a general or special order in writing.

Explanation

Section Summary: ​

Section 361 of the new income tax law outlines the constitution and functioning of the Appellate Tribunal, which is a key body for resolving tax disputes. It specifies the appointment, qualifications, and roles of the President, Vice-President, and other members of the Appellate Tribunal. The section also clarifies how the terms and conditions of service for these members are governed, depending on when they were appointed.

Key Changes: ​

  1. Tribunals Reforms Act, 2021: For members appointed after the commencement of the Tribunals Reforms Act, 2021, their qualifications, appointment, and service conditions are now governed by Chapter II of this Act.
  2. Finance Act, 2017: For members appointed before the commencement of Part XIV of Chapter VI of the Finance Act, 2017, their service conditions continue to be governed by the Income-tax Act, 1961, as if Section 184 of the Finance Act, 2017, had not come into force.
  3. Appointment of President: The President of the Appellate Tribunal must now be either a sitting or retired High Court Judge with at least seven years of service or one of the Vice-Presidents of the Tribunal.

Practical Implications: ​

  • Tax Dispute Resolution: The Appellate Tribunal plays a critical role in resolving tax disputes. The changes ensure that the Tribunal is staffed with qualified and experienced individuals, which could improve the efficiency and fairness of dispute resolution.
  • Governance of Members: The bifurcation of service conditions based on the timing of appointments ensures continuity and clarity for existing members while aligning new appointments with the updated framework under the Tribunals Reforms Act, 2021.
  • Delegation of Powers: The Vice-President(s) can now exercise powers delegated by the President, which may streamline decision-making and administrative processes within the Tribunal.

Critical Concepts: ​

  • Appellate Tribunal: A quasi-judicial body that hears appeals against orders passed by tax authorities. It is a critical part of the tax dispute resolution mechanism.
  • Tribunals Reforms Act, 2021: A law aimed at reforming the functioning of tribunals in India, including changes to appointment processes and service conditions.
  • Finance Act, 2017: Introduced significant changes to the governance of tribunals, including the Appellate Tribunal, through Section 184.

Compliance Steps: ​

  1. For Taxpayers: No direct compliance steps are required from taxpayers. However, understanding the structure of the Appellate Tribunal can help in navigating the appeals process more effectively.
  2. For the Central Government: Ensure that appointments to the Appellate Tribunal comply with the new qualifications and service conditions as outlined in this section and the Tribunals Reforms Act, 2021.

Examples: ​

  • Scenario 1: A taxpayer files an appeal against an order passed by the Commissioner of Income Tax. The appeal is heard by the Appellate Tribunal, which now includes members appointed under the new framework of the Tribunals Reforms Act, 2021. The taxpayer can expect the Tribunal to function with updated governance standards.
  • Scenario 2: A Vice-President of the Appellate Tribunal is delegated certain powers by the President to expedite the resolution of pending cases. This delegation allows for faster decision-making and reduces the backlog of cases.

This section ensures that the Appellate Tribunal operates with clarity, efficiency, and adherence to updated legal frameworks, benefiting both taxpayers and the tax administration system.