Section 246 and Section 249 of the Income Tax Act, 1961 both deal with the procedures for filing appeals, but they address different aspects of the tax appeal process. While Section 246 specifies the types of orders that can be appealed, Section 249 lays down the procedure for filing an appeal, including the time limits, forms, and the conditions that apply to the appeal process.
In this blog, we will delve into the differences between Section 246 and Section 249, providing examples and using a tabular format to highlight the key distinctions. This comparison will help in understanding the scope and procedure of filing appeals under both sections.
Overview of Section 246 and Section 249
Section 246: Types of Orders That Can Be Appealed
Section 246 of the Income Tax Act specifies the types of orders that can be appealed to the Commissioner of Income Tax (Appeals) (CIT(A)). This section outlines the grounds for filing an appeal against the orders passed by the Assessing Officer (AO) or other authorities.
Section 249: Procedure for Filing an Appeal
Section 249, on the other hand, outlines the procedure for filing an appeal under the Income Tax Act, including the time limit for filing the appeal, the required forms, and the appeal fee. This section provides detailed instructions on how taxpayers can file an appeal against the orders covered under Section 246.
Key Differences Between Section 246 and Section 249
To better understand the distinctions between Section 246 and Section 249, let’s compare them in the following table:
| Aspect | Section 246 | Section 249 |
|---|---|---|
| Purpose | Specifies the types of orders that can be appealed | Lays down the procedure for filing an appeal |
| Types of Orders Covered | Appeals against assessment orders, penalty orders, reassessment orders, rectification orders, TDS/TCS orders, and others. | Covers any appealable order under the Income Tax Act, typically filed after an assessment order or penalty order. |
| Appeal Authority | Appeal is filed before the Commissioner of Income Tax (Appeals) (CIT(A)) | Appeal is filed before the CIT(A), following the guidelines under Section 249. |
| Time Limit for Filing Appeal | No time limit specified, but must follow the general time limit prescribed by law. | 30 days from the date of receiving the order, with a 30-day extension allowed in specific cases. |
| Fee for Filing Appeal | Section 246 does not specify the fee for filing an appeal. It depends on the type of appeal. | Fee required based on the total income (e.g., ₹500 for incomes over ₹2 lakh but less than ₹10 lakh, ₹1,000 for incomes over ₹10 lakh). |
| Form for Filing Appeal | No specific form mentioned; appeal is generally filed as per rules. | Form No. 35 is used for filing an appeal under Section 249. |
| Grounds for Appeal | Covers a broad range of issues, including disputed assessments, penalties, and orders of rectification. | The taxpayer must clearly state the grounds of appeal and reasons for disputing the tax authority’s decision. |
| Documentation Required | Taxpayer needs to provide supporting documents as required by the nature of the appeal. | Taxpayer must submit Form No. 35, supporting documents like tax payment receipts, TDS certificates, and grounds of appeal. |
Detailed Explanation with Examples
1. Section 246: Types of Orders That Can Be Appealed
Section 246 enumerates specific types of orders that can be appealed. Here are some common examples:
Example 1: Appeal Against Assessment Orders
A taxpayer receives an assessment order under Section 143(3), where the Assessing Officer (AO) has made certain adjustments to the declared income. The taxpayer disagrees with the adjustment and files an appeal under Section 246 to the Commissioner of Income Tax (Appeals) (CIT(A)).
Example 2: Appeal Against Penalty Orders
If the Assessing Officer (AO) imposes a penalty under Section 271(1)(c) for underreporting income, the taxpayer may appeal against the penalty order before the CIT(A) under Section 246.
Example 3: Appeal Against Reassessment Orders
Under Section 147, the AO reopens the assessment of a previous year, and the taxpayer disagrees with the reassessment. The taxpayer can file an appeal under Section 246 to challenge the reassessment order.
2. Section 249: Procedure for Filing an Appeal
Section 249 details the procedure for filing an appeal once an appealable order is identified under Section 246. Here’s the process:
Example: Filing an Appeal Against an Assessment Order
Let’s assume a taxpayer receives an assessment order under Section 143(3) with which they disagree. To file an appeal, the taxpayer needs to:
- Prepare Form No. 35: The taxpayer fills out Form No. 35, which includes personal details, the order number, and the grounds of appeal.
- Submit Supporting Documents: The taxpayer attaches relevant supporting documents, such as payment receipts, TDS certificates, or relevant legal provisions that support their case.
- Pay the Appeal Fee: The taxpayer pays the fee, which will depend on the total income.
- File the Appeal: The appeal is filed with the Commissioner of Income Tax (Appeals) (CIT(A)) within 30 days from the date of receiving the order. If the taxpayer cannot file within the given time, they must provide a valid reason for the delay, and the CIT(A) may extend the time by 30 days.
Example 2: Filing an Appeal Against a Penalty Order
If the AO imposes a penalty for underreporting income, the taxpayer may disagree with the imposition of the penalty. The procedure for filing an appeal would be similar:
- Form No. 35 must be filed, including details of the penalty order and reasons for dispute.
- Supporting documents, such as copies of the return and payment receipts, should be submitted.
- The appeal fee must be paid according to the income level.
- The appeal is submitted to the CIT(A) within 30 days.
Key Case Law References:
- CIT v. Ashoka Engineering Co. (1992) 194 ITR 645 (SC):
The Supreme Court in this case emphasized the importance of understanding the types of orders that can be appealed. It confirmed that appeals could be filed under Section 246 against assessment orders, penalty orders, and other types of decisions by the Assessing Officer (AO). - K.P. Varghese v. ITO (1981) 131 ITR 597 (SC):
This case clarified the right of taxpayers to file an appeal against incorrect assessments or mistakes in tax laws under the relevant sections of the Income Tax Act, including Section 249. It also highlighted the importance of filing the appeal within the prescribed time limits.
Conclusion
The key difference between Section 246 and Section 249 lies in their scope: Section 246 defines the types of orders that are appealable, while Section 249 lays down the procedure for filing an appeal against those orders. Section 249 provides a clear framework for taxpayers to follow when filing an appeal with the Commissioner of Income Tax (Appeals) (CIT(A)).
By understanding these provisions, taxpayers can effectively challenge any unfair decisions made by the Assessing Officer (AO) or other tax authorities. Ensuring compliance with the procedural requirements of Section 249 is crucial for the success of an appeal.
Additional Resources
Learn more about Tax Provisions on the official Income Tax India website.
Want to consult a professional? Contact us: 09463224996
For more information and related blogs, click here.
Contents