Section 246A and Section 249 of the Income Tax Act, 1961 are both related to the process of filing appeals against the orders of tax authorities. However, they address different aspects of the appeal process. Section 246A deals with the types of orders that can be appealed, while Section 249 outlines the procedure for filing such appeals, including the timelines, documentation, and necessary forms.
In this blog, we will explore the differences between Section 246A and Section 249, providing clarity on the scope of each section and highlighting key points through examples and a comparative table.
Overview of Section 246A
Section 246A of the Income Tax Act outlines the specific types of orders that are appealable to the Commissioner of Income Tax (Appeals) (CIT(A)). It defines which orders can be challenged by the taxpayer when they disagree with an assessment, penalty, or other tax-related decisions made by the Assessing Officer (AO) or other tax authorities.
Key Features of Section 246A:
- Appealable Orders: Section 246A covers various types of orders that can be appealed, such as:
- Assessment Orders: Orders passed under Section 143(3) or Section 144.
- Penalty Orders: Orders passed under Section 271 (for penalties related to concealment of income, etc.).
- Reassessment Orders: Orders under Section 147 related to income reassessment.
- Rectification Orders: Orders passed under Section 154 regarding rectification of mistakes.
- TDS/TCS Orders: Orders related to tax deduction at source or tax collection at source under sections like Section 201.
- Scope: Section 246A provides a comprehensive list of orders that are appealable, making it clear which decisions of the Assessing Officer can be disputed in an appeal.
Overview of Section 249
Section 249 of the Income Tax Act defines the procedure for filing an appeal before the CIT(A). It establishes the process that must be followed when a taxpayer wishes to challenge an assessment or penalty order, as identified under Section 246A.
Key Features of Section 249:
- Filing an Appeal: The taxpayer is required to file an appeal in Form No. 35, providing all necessary details about the order being appealed and the grounds for the appeal.
- Time Limits: The appeal must be filed within 30 days from the date of receiving the order. In certain cases, an additional 30-day extension is allowed if the taxpayer can provide a valid reason for the delay.
- Appeal Fee: The taxpayer must pay a fee when filing an appeal, which is based on the total income declared by the taxpayer. The fee can range from ₹500 to ₹1,000 depending on the income level.
- Grounds for Appeal: The taxpayer must provide clear grounds for appealing the order. This includes specifying the reasons for disagreement with the assessment, penalty, or other disputed orders.
Key Differences Between Section 246A and Section 249
To better understand the differences, let’s compare Section 246A and Section 249 in the following table:
| Aspect | Section 246A | Section 249 |
|---|---|---|
| Purpose | Specifies the types of orders that can be appealed. | Defines the procedure for filing an appeal. |
| Types of Orders Covered | Covers assessment orders, penalty orders, rectification orders, reassessment orders, TDS/TCS orders, and others. | Covers any appealable order under the Income Tax Act. |
| Scope | Outlines the appealable orders such as assessments, penalties, and other tax-related orders. | Lays down the step-by-step procedure for filing an appeal. |
| Time Limit for Filing Appeal | No time limit specified for types of orders, but must follow the general filing timelines. | 30 days from the date of the order, with an extension of up to 30 days allowed. |
| Appeal Authority | The appeal is filed with the CIT(A) for the listed orders. | Appeal is filed with the CIT(A) as per the procedure outlined. |
| Fee for Filing Appeal | Section 246A does not specify the fee; it depends on the type of appeal. | Appeal fees range from ₹500 to ₹1,000 depending on income. |
| Form for Filing Appeal | No specific form mentioned for appeals under Section 246A. | Form No. 35 is used for filing an appeal under Section 249. |
| Grounds for Appeal | Specific grounds based on the type of order being appealed. | Grounds should clearly specify the reason for challenging the order. |
Examples to Clarify the Differences
Example 1: Appeal Under Section 246A
A taxpayer receives an assessment order under Section 143(3), where the Assessing Officer (AO) makes certain adjustments to the income declared in the return. The taxpayer disagrees with the adjustments and files an appeal before the CIT(A) under Section 246A.
Example 2: Filing an Appeal Under Section 249
The same taxpayer, after filing the appeal under Section 246A, follows the process outlined in Section 249. They file the appeal in Form No. 35, submit the necessary documents, and pay the appropriate appeal fee based on their declared income. They also ensure that the appeal is filed within 30 days from the date of receiving the assessment order.
Key Case Law References
- CIT v. Ashoka Engineering Co. (1992) 194 ITR 645 (SC):
The Supreme Court emphasized that Section 246A allows taxpayers to appeal against a wide range of orders passed by the Assessing Officer (AO), including penalties, assessments, and other decisions. The case highlighted the importance of understanding which types of orders can be appealed under this provision. - K.P. Varghese v. ITO (1981) 131 ITR 597 (SC):
The Supreme Court in this case clarified the right of taxpayers to file an appeal under Section 249. It emphasized that the procedure laid out under this section is crucial to ensure that taxpayers have the opportunity to challenge any incorrect decisions or errors in the orders passed by tax authorities.
Conclusion
Section 246A and Section 249 play complementary roles in the tax appeal process. Section 246A specifies the types of orders that can be appealed, such as assessment orders, penalty orders, and rectification orders, while Section 249 sets out the procedure for filing the appeal, including time limits, documentation, and appeal fees. Understanding these two sections and their interplay is essential for taxpayers who wish to challenge decisions made by the Assessing Officer (AO) or other tax authorities.
By following the correct process and adhering to the prescribed timelines, taxpayers can effectively seek a fair review of their cases and ensure that any unjust decisions are rectified.
Additional Resources
Learn more about Tax Provisions on the official Income Tax India website.
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