Income Tax 2025

Appearance

Procedure of Appellate Tribunal. ​

364(1) ​

The powers and functions of the Appellate Tribunal may be exercised and discharged by Benches constituted by the President of the Appellate Tribunal from among the members thereof.

364(2) ​

Subject to the provisions contained in sub-section (3), a Bench shall consist of one Judicial Member and one accountant member.

364(3) ​

The President, or any other member of the Appellate Tribunal authorised in this behalf by the Central Government, may sitting singly, dispose of any case allotted to the Bench, pertaining to an assessee whose total income as computed by the Assessing Officer in the case does not exceed fifty lakh rupees.

364(4) ​

The President of the Appellate Tribunal may, for the disposal of any particular case, constitute a Special Bench consisting of three or more members, one of whom shall necessarily be a judicial member and one an accountant member.

364(5) ​

If the members of a Bench differ in opinion on any point, the point shall be decided according to the opinion of the majority, if there is a majority, but if the members are equally divided, they shall state the point or points on which they differ, and the case shall be referred by the President of the Appellate Tribunal for hearing on such point or points by one or more of the other members of the Appellate Tribunal, and such point or points shall be decided according to the opinion of the majority of the members of the Appellate Tribunal who have heard the case, including those who first heard it.

364(6) ​

Subject to the provisions of this Act, the Appellate Tribunal shall have power to regulate its own procedure and the procedure of Benches thereof in all matters arising out of the exercise of its powers or of the discharge of its functions, including the places at which the Benches shall hold their sittings.

364(7) ​

The Appellate Tribunal, for the purposes of discharging its functions,—

  • (a) shall have all the powers which are vested in the income-tax authorities referred to in section 246;
  • (b) any proceeding before the Appellate Tribunal shall be deemed to be a judicial proceeding within the meaning of sections 229 and 267 and for the purposes of section 233 of the Bharatiya Nyaya Sanhita, 2023; and
  • (c) the Appellate Tribunal shall be deemed to be a Civil Court for all the purposes of section 215 and Chapter XXXVIII of the Bharatiya Nagarik Suraksha Sanhita, 2023.
Explanation

Section Summary: ​

Section 364 outlines the procedure for the functioning of the Appellate Tribunal, which is responsible for hearing appeals against decisions made by income tax authorities. It specifies how benches are constituted, the composition of these benches, and the powers and procedures they follow. The section also addresses how disputes among members are resolved and grants the Tribunal authority to regulate its own procedures.

Key Changes: ​

  1. Bench Composition: The section clarifies that benches must consist of one Judicial Member and one Accountant Member, unless a single member is authorized to handle cases where the total income does not exceed ₹50 lakh.
  2. Single Member Disposal: Introduces the provision for a single member to handle smaller cases (total income ≤ ₹50 lakh), streamlining the process for less complex matters.
  3. Special Bench: Allows the President to constitute a Special Bench of three or more members for specific cases, ensuring expertise and thoroughness in complex matters.
  4. Dispute Resolution: Provides a clear mechanism for resolving differences of opinion among bench members, ensuring decisions are made by majority opinion.
  5. Powers of the Tribunal: Confirms that the Tribunal has the same powers as income tax authorities and is treated as a civil court for certain purposes under the Bharatiya Nyaya Sanhita, 2023, and Bharatiya Nagarik Suraksha Sanhita, 2023.

Practical Implications: ​

  1. For Taxpayers:
    • Cases involving smaller income amounts (≤ ₹50 lakh) may be resolved faster, as they can be handled by a single member.
    • Complex cases may be assigned to a Special Bench, ensuring a more detailed and expert review.
  2. For the Appellate Tribunal:
    • The Tribunal has greater flexibility in managing its workload and ensuring efficient case disposal.
    • The provision for resolving member disagreements ensures smoother decision-making processes.
  3. For Compliance:
    • Taxpayers and representatives must be aware of the Tribunal’s powers and procedures, as it operates with the authority of a civil court.

Critical Concepts: ​

  1. Judicial Member vs. Accountant Member:
    • A Judicial Member typically has a legal background, while an Accountant Member has expertise in accounting or taxation. Their combined expertise ensures balanced decisions.
  2. Special Bench: A larger bench formed for complex cases, ensuring diverse perspectives and expertise.
  3. Majority Opinion: In case of disagreements, the majority opinion prevails. If opinions are evenly split, the case is referred to additional members for a final decision.

Compliance Steps: ​

  1. For Taxpayers:
    • Ensure all documentation is complete and accurate when filing an appeal.
    • Be prepared for the possibility of a single-member hearing if the income in question is ≤ ₹50 lakh.
  2. For Representatives:
    • Familiarize yourself with the Tribunal’s procedures and powers, especially its authority to summon witnesses or demand documents.
    • Be ready to present arguments clearly, as the Tribunal operates with judicial authority.

Examples: ​

  1. Single Member Case: Mr. A’s total income, as computed by the Assessing Officer, is ₹45 lakh. His appeal is assigned to a single member of the Appellate Tribunal, speeding up the resolution process.
  2. Special Bench Case: A large corporation disputes a tax assessment involving complex international transactions. The President assigns the case to a Special Bench of three members (one Judicial and two Accountant Members) to ensure a thorough review.
  3. Dispute Resolution: In a case involving ₹1 crore, the two members of the bench disagree on whether a certain expense is deductible. The matter is referred to a third member, and the final decision is based on the majority opinion.

This section ensures the Appellate Tribunal operates efficiently, with clear procedures for handling cases of varying complexity and resolving disputes among members.