Last updated: March 30th, 2020 12:44 PM

Income Tax Appeals to the High Court

Taxpayers are allowed to make appeals to the High Court for challenging orders passed by the Appellate Tribunal. Not every appeal is dealt with in the corridors of the High Court. The High Court admits appeals if, and only if, it is satisfied that the case involves a substantial question of law. A question of law is considered to arise when the assessee makes a dispute about the applicability of any particular legal provisions forming part of the Income Tax Act. The role played by the High Court pertaining to Income-tax appeals is limited. The High Court pursues the case only in terms of qualifying questions of law. However, the High Court has jurisdictions to hear any other substantial question of law which is not formulated by it, provided that the Court is satisfied that the appeal provides room for the relevant questions. The Court has to record the reasons for pursuing any other question of law. Taxpayers should note that the High Court has jurisdiction to recall any orders passed by any other bench of the High Court provided that sufficient cause is shown for the enactment of the order.

Writ Petitions

Appeals to the High Court can be made by the Assessee or the Commissioner of Income Tax. There might be instances where the Act deprives the assessee or the commissioner of the right to appeal. However, the concerned person is benefited with the option of a writ petition, which acts as a substitute for the appeal.

Pre-requisites for Filing an Income Tax Appeal

The following are certain pre-requisites to be followed in filing an appeal to the High Court:

• The Principal Chief Commissioner/Chief Commissioner/Principal Commissioner/Commissioner/assessee aggrieved by any order passed by the Appellate Tribunal may file an appeal to the High Court.
• The time-limit for appeal is 120 days from the date of the order by the Tribunal.
• The appeal should be made by the payment of a specified fee amount.
• It should be in the form of a memorandum of appeal precisely stating therein the question of law involved.

Condonation of Delay

The High Court is authorized to condone any delay on the part of the assessee if the reasons stated by the assessee is satisfactory. Moreover, the High Court is not supposed to dispose of the delayed appeals filed by the department in a case where huge stakes are involved. Given this kind of a scenario, the High Court can consider imposing penalties for the delay and decide the appeals on merits.

Hearing of an Income Tax Appeal

• The High Court, on the satisfaction of involvement of a substantial question of law, shall formulate the particular question.
• The hearing of appeal must stick to the question so formulated. However, the High Court may formulate other relevant substantial question of law, the reasons for which must be recorded.
• The respondents, after hearing the appeal is entitled to debate the validity of the question in connection with the case.
• The High Court may determine any issue which has not been determined by the Appellate Tribunal, or the issues wrongly determined by the Tribunal on any substantial question of law in relation to an income tax appeal. On the other hand, the High Court has is not empowered to decide a question which was not raised before the Tribunal.
• The relevant provisions of Code of Civil Procedure, 1908 shall equally apply to an income tax appeal under Section 260A to the High Court.

Number of Judges and decision-making

A minimum of two judges must be present during the hearing of the income tax appeal and the verdict shall be decided on the opinion of the majority if any. When the opinions lack a majority, the Judges will state their point of differences in the presence of one or more other judges of the High Court, after which the decision will be made based on the overall majority.