When We Must File an Appeal: Understanding Our Rights
When we receive an assessment order under Section 143(3) or 144, or a penalty order that we believe is unjust, we have the right to challenge it through the appellate process. We must act within 30 days from the date the order is served on us.
Remember: We cannot appeal simply because we don’t like the tax demand. Our appeal must identify specific legal or factual errors made by the Assessing Officer in our case.
Appeal Hierarchy: Four Levels to Justice
Level 1: Commissioner (Appeals) – Our First Stop
This is where we start our appeal journey. The Commissioner (Appeals) [CIT(A)] is our first appellate authority against any assessment order. We’ll use Form 35 to file here.
Fee: ₹250 (income ≤ ₹1 lakh), ₹500 (₹1-2 lakh), ₹1,000 (>₹2 lakh)
Anyone with tax expertise (even if not CA/Advocate) can present the case.
Level 2: Income Tax Appellate Tribunal (ITAT)
If we’re not satisfied with the CIT(A)’s decision, we can appeal further to ITAT within 60 days. Form 36 is required for ITAT appeals. This is where most significant tax disputes are resolved
Fee: Fixed ₹500 regardless of amount
Level 3: High Court
When ITAT’s decision involves a substantial question of law, we can appeal to the High Court within 120 days, Form 37 is the prescribed form for High Court appeals.
Court fee of ₹1,0000
Only legal professionals like advocates and CA with law degree can file and represent.
Level 4: Supreme Court
As the final resort, we can approach the Supreme Court through a Special Leave Petition against High Court orders.
Special Leave Petition (SLP) is the constitutional remedy under Article 136. There is no prescribed form like Form 35/36/37.
Timeline: 90 days against High Court order (if it goes against you) / 60 days (if in your favor)
Court fee: ₹5,000
Advocate on Record (AOR) – Only AORs can file SLP or appeals in Supreme Court
Stay of Demand After Income Tax Assessment Order
Timing of Demand Notice
When you receive your assessment order under Section 143(3) or 144, a demand notice under Section 156 is automatically served along with the order. The AO is required to issue this notice mandatorily whenever any sum becomes payable by you due to an assessment order.
Payment Timeline
The notice requires you to pay the entire demand within 30 days from the date of service.
What the Demand Covers
The Section 156 notice includes:
- Tax assessed as per order
- Interest under Sections 234A, 234B, 234C
- Penalty levied under various sections
- Any other sum payable under the Act
Stay of Demand Under Section 220(6): Detailed Procedure
When Can You Apply?
You can apply for stay only after:
- Filing appeal within 30 days of order
- Paying the mandatory 20% (or requesting waiver)
Where to File First Stay Application
Your first stay application must be to the Assessing Officer. The AO has 15 days to dispose of your application by a speaking order.
How to Pay the 20%
- Use challan ITNS 280 (major head: 0021, minor head: 300)
- Pay online through e-filing portal
- Attach payment proof to stay application
