Appeals to the Income Tax Appellate Tribunal (ITAT) [Section 253(1) & (2)]

Under Section 253 of the Income Tax Act, 1961, appeals can be filed before the Income Tax Appellate Tribunal (ITAT)—the second level of appeal after the Commissioner (Appeals). Here’s a structured breakdown of the provisions:

1. Who Can File an Appeal?

(A) Assessee (Taxpayer) [Section 253(1)]

An assessee can appeal against:

✔ Orders of CIT(A) (e.g., assessment, penalty, or revision orders).

✔ Orders passed by AO if CIT(A) enhances the assessment.

(B) Income Tax Department [Section 253(2)]

The Principal Commissioner/Commissioner can appeal against:

✔ CIT(A)’s orders that are unfavorable to the Revenue.

✔ Certain orders of the Assessing Officer (e.g., penalty waiver under Section 273A).

2. Time Limit for Filing Appeal

Late Filing: ITAT may condone delay up to 1 year for assessees if reasonable cause is shown (e.g., illness, natural calamity).

3. Form & Procedure for Filing Appeal

• Form 36(for assessees) / Form 36A (for Department).
• Documents Required:
  • Copy of CIT(A)’s order.
  • Grounds of appeal (must be specific & legally valid).
  • Proof of tax payment(if applicable).

Filing Mode:

• E-filing(mandatory for Department).
• Physical filing(still accepted for assessees in some cases).

4. Key Powers of ITAT

✔ Confirm, modify, or cancel CIT(A)’s order.

✔ Admit new evidence if AO/CIT(A) wrongly rejected it.

✔ Grant stay on tax demand (subject to conditions).

✔ Rectify mistakes in its own orders (Section 254(2)).

Limitations:

❌ Cannot consider new grounds unless they arise from facts already on record.

❌ Cannot decide constitutional issues (must refer to High Court).

5. Judicial Precedents

1. CIT vs. Scindia Steam Navigation (1961)– ITAT is the final fact-finding authority.
2. Hindustan Steel Ltd. vs. CIT (1972)– ITAT can remand cases to AO for fresh inquiry.
3. CIT vs. Anjum M.H. Ghaswala (2001)– ITAT cannot enhance an assessment.

6. Practical Considerations

✅ Departmental Appeals: Must meet monetary limits (e.g., ₹50 lakh tax effect for FY 2023-24).

✅ Stay on Demand: File stay application along with appeal to avoid recovery.

✅ Cross-Appeals: If both assessee & Department appeal, ITAT hears them together.

Comparison: CIT(A) vs. ITAT Appeals