Remedy Against Orders of Appellate Tribunal

Under the Income Tax Act, 1961, if a taxpayer or the Income Tax Department is dissatisfied with an order passed by the Income Tax Appellate Tribunal (ITAT), the following remedies are available:

1. Appeal to the High Court [Section 260A]

• Applicability:
  • Can be filed if a “substantial question of law”arises from the ITAT’s order.
  • No appeal on purely factual disputes(unless perverse findings).
• Who Can File?
  • Assessee or the Income Tax Department.
• Time Limit:
  • 120 daysfrom the date of the ITAT’s order.
  • Delay can be condoned if sufficient cause is shown.
• Procedure:
  • File a Memorandum of Appeal(with grounds) before the jurisdictional High Court.
  • The High Court must admit the appealonly if a substantial question of law exists.
• Key Points:
  • The High Court can confirm, modify, or set asidethe ITAT’s order.
  • Example of a “substantial question of law”:
    • Misinterpretation of a tax provision.
    • Violation of legal principles (e.g., natural justice).

2. Appeal to the Supreme Court [Section 261 + Article 136]

• Applicability:
  • Against a High Court’s order(if further appeal is needed).
  • Only in cases of national importance, conflicting judgments, or gross injustice.
• Two Routes:
  1. Appeal under Section 261:
     • If the High Court certifiesthe case as fit for appeal.
  2. Special Leave Petition (SLP) under Article 136:
     • Direct appeal to the Supreme Court(discretionary remedy).

• Time Limit:
  • 90 daysfrom the High Court’s order (for SLP).

3. Writ Petition (Article 226/227 of the Constitution)

• When to Use?
  • If the ITAT’s order is patently illegal, arbitrary, or violates natural justice.
  • Example: ITAT refuses to admit an appeal without valid reasons.
• Jurisdiction:
  • Filed before the High Court(if ITAT’s order is challenged).
  • Supreme Court(under Article 32 for fundamental rights violations).
• Key Points:
  • No alternative remedyshould be effective (e.g., if appeal is time-barred).
  • Rarely granted unless there is a clear jurisdictional error.

4. Rectification of Mistake [Section 254(2)]

• Applicability:
  • If ITAT’s order contains an apparent mistake of fact or law.
• Time Limit:
  • 4 yearsfrom the date of the order.
• Procedure:
  • File a Miscellaneous Application (MA)before the ITAT.
• Example:
  • ITAT overlooked a Supreme Court judgment while deciding the case.

5. Comparison of Remedies

6. Key Considerations

1. Facts vs. Law:
   • High Court only entertains legal issues, not factual disputes.
2. Alternative Remedies:
   • Writ petitions are last resorts(if appeal is not possible).
3. Departmental Appeals:
   • The Income Tax Department must follow monetary limits(e.g., Rs. 1 crore tax effect for High Court appeals).