Report No. 12

Chapter XXI

Appeals and Revisions

Notes to clause 254

General

The provisions of the Act relating to appeals and revisions are scattered in existing sections 30, 31, 33, 33A, 33B, 66A and 67A. Existing section 66, dealing with reference from the Appellate Tribunal to the High Court, is also in a sense, connected with appeals. There are, also, provisions authorising appeals in existing sections 58B(4) and 61(3), proviso to clause (b).

An attempt has been made to bring all these provisions together in this chapter. In order to facilitate their proper understanding, the provisions have been arranged according to the authority to which the appeal lies. Thus, appeals, from the Income-tax Officer to the Appellate Assistant Commissioner are dealt with first, under one group. Appeals from the decisions of the Appellate Assistant-Commissioner are dealt with in a separate group and so on. Provisions regarding revision are placed in a separate group, and miscellaneous provisions are placed at the end.

In each group, the order against which appeal is allowed is specified first, and the form of appeal, limitation and procedure are dealt with next; where necessary, powers of the appellate authority have been dealt with specifically and separately.

Appeals to the Appellate Tribunal have been replaced by appeal to the High Court, for reasons explained in the body of the report.

Clause 254

The following changes have been made in the existing section 30, sub-section (1), main para:-

(i) The existing words "any assessee objecting to the amount" etc. have been replaced by the words "any assessee aggrieved by ", which seem to be more appropriate.

(ii) The existing section allows an appeal as to the amount of income assessed under section 23 "or section 27". It is, however, unnecessary to mention section 27 separately in this context, since, even when section 27 is used, the ultimate assessment is really made under section 23 itself as is clear from the concluding words of existing section 27. This reference has, therefore, been omitted.

(iii) It has been made clear that an objection as to status under which the assessee is assessed can also be raised by way of appeal.

(iv) The existing section allows an appeal in respect of loss computed under section 24. Since, however, the computation of loss is also a part of assessment under existing section 23, this reference has been omitted.

(v) The existing section allows an appeal from an order refusing to make a fresh assessment under section 27. These words have been replaced by the words "to reopen an assessment", which are more easily intelligible.

(vi) The existing section allows an appeal from under section 46(1). Since, however, section 46(1) is, in the draft, proposed to be replaced by provision authorising the automatic running of interest, the question of appeal does not arise, and this reference has been omitted.1

1. See draft clause 230(1).

(vii) The existing section allows an appeal under sections 49 and 49F. Section 49 was repealed in 1948, and section 49F does not authorise any independent order of refund, but merely enables an executor etc. to claim refund. The order itself is passed under section 48. The references to sections 49 and 49F have, therefore, been omitted.

(viii) A new provision authorising appeals in respect of orders under existing section 35 has been added. It is desirable1 to allow appeals from such orders passed by the Income-tax Officer, particularly since an order under section 35 may aggrieve an assessee who desires rectification.

1. Cf. I.T.I.C. Report, 1948 para. 254, p. 113.

(ix) The various orders relating to interest under existing section 18A have also been made appealable in the appropriate cases.1

1. Vide draft clause 254(1) and Explanation.

(x) The sections under which a penalty can be imposed, have been described more elaborately in order to make the position regarding appeals from such penalty clear.

(xi) The following orders have been made appealable:-

(i) an order passed by the Income-tax Officer on an assessee's application for withdrawal or cancellation of a certificate.

(ii) order passed by the Income-tax Officer refusing any assessee's request to treat him as not in default, in view of an appeal.

Notes to clause 255

This embodies existing section 30, sub-section (1), 2nd Proviso. The language has been slightly simplified.

The first Proviso to section 30, sub-section (1) deals with an appeal against an order under existing section 46(1). This has been omitted as unnecessary in the scheme adopted in the draft1.

1. See notes to draft clause 254.

The third Proviso to section 30, sub-section (1), prohibiting an appeal by a shareholder, in a company in respect of which an order under existing section 23A has been passed, has also been omitted as unnecessary, since, under section 23A as amended up-to-date, the income of a shareholder is not affected directly and the question of his being aggrieved by any such order does not arise.

Notes to clause 256

No comments are needed.

Notes to clause 257

Sub-clause (1).- Does not need any comments.

Sub-clause (2).- Existing section 30(2), dealing with the time limit within which the appeal may be presented from the order of the Income-tax Officer, describes in an elaborate manner the date from which the time limit is to be counted. It does not appear to be necessary to have such elaborate provision, and it would be sufficient if the starting point is described as the date on which the order is intimated. The provision, has, therefore, been simplified in the draft. Where the appeal is in respect of tax, interest or penalty, it will of course be useful to deal with the time limit specifically [vide paragraphs (a) and (b) of the draft sub-clause].

Sub-clause (3).- Does not need any comments.

Notes to clause 258

Sub-clause (1).- Does not need any comments.

Sub-clause (2).- The persons entitled to be heard at the appeals have been listed; Cf existing section 31(3), 2nd Proviso.

Sub-clauses (3), (4) and (5).- Do not need any comments.

Sub-clause (6).- This is new. Some guidance as to the contents of the appellate orders appears to be desirable, and hence this sub-clause.

Sub-clause (7).- Does not need any comments.

Notes to clause 259

Sub-clause (1).- Existing section 31(3) deals elaborately with the various kinds of appellate orders that can be passed by the Appellate Assistant Commissioner. It does not however, appear to be necessary to make such an elaborate provision; it should suffice if only the important cases of appeal against assessments or penalties are dealt with specifically. In the remaining cases, the power to pass such orders as the Appellate

Assistant Commissioner things fit should suffice. The draft sub-clause has been simplified on these lines.

Sub-clause (2).- Does not need any comments.

Explanation.- This is new and is intended to codify a rule which is well recognised, namely, that the Appellate Assistant Commissioner is not confined to the points raised by the appellant in the appeal. He may re-determine any matters which fell to be decided by the Income-tax officer in the course of the assessment or other proceedings1.

1. See the judgment of Chagl, C.J. in Narnadas Manohardas v. C.I.T., (1957) 31 ITR 909, quoted with approval in C.I.T., v. Mc Millan and Co., (1958) 33 ITR 182 (193) SC.

Notes to clause 260

Sub-clause (1).- The only important change worth mentioning is the addition of paragraph (c).

Since appeals to the Tribunal are proposed to be replaced by appeals to the High Court,1 consequential changes have been made in this and subsequent clauses.

1. Vide notes to clause 254, under the head "General".

It has been held that an order by the Appellate Assistant Commissioner, holding that there was no sufficient reason for excusing delay in filing an appeal and rejecting the appeal as time-barred, is an order under section 31, and an appeal lies from such order1. It has been observed that,-

1. Mela Ram and Sons v. C.I.T., (1956) 29 ITR 607 SC.

"If the appeal is dismissed as incompetent or is rejected as it was filed out of time and no sufficient cause was established, it results in an affirmation of the order appealed against."1

1. C.I.T. v. Shazadi Begum, (1952) 21 ITR 1(11).

To cover such orders, para. (c) has been added in sub-clause (1). (No such addition is considered necessary in the section dealing with appeals to the Supreme Court, since the language of the relevant provisions for these appeals is not likely to raise the question that arose with reference to the appeals from the Appellate Assistant Commissioner).