The Income Tax Appellate Tribunal, like any judicial body, has a number of procedural requirements that require to be complied with before an appeal can be heard. Unfortunately, several authorized representatives, though highly qualified CAs and Advocates, neglect to comply with the requirements with the result that their matters get adjourned and they waste their own time and that of the Bench and their clients incur unnecessary costs. To assist the Tribunal and the taxpayers in the cause of justice, the author, an eminent advocate, has prepared a comprehensive check-list of matters that need to be complied with. The author assures all taxpayers that if the check-list is religiously followed, they will have a smooth and pleasant experience before the Tribunal
The Income–tax Appellate Tribunal-Final fact finding authority—Members of the Bar and Bench are trustees-The onus is on them to preserve its dignity, sanctity and purity.
Members of the Tribunal must also bear in mind that in hearing the appeals they are not merely adjudicating on the issues before them but they are invariably deciding on the fortune of the assessee. While one wrong decision against an assessee may ruin his life and relegate him to the position of a pauper, the same against the Government may affect the coffers of the Government to an extent of a drop in an ocean
The role of the Bar in the administration of justice is no less than that of the Bench. It has therefore been rightly said that only a good Bar makes for a good Bench. Honourable Justice M. Srinivasan in Dayal Sons v. CIT (1998) 231 ITR 569 (H.P.) (HC) (571), observed that,
“The profession of an advocate is a very noble profession and he is entrusted with a duty to be performed in the court. He is not only an agent of the client in one sense but also an officer of the Court. He has got three fold duties; one towards client; another towards the court and the third towards the opposing counsel.”
We desire that the representatives representing before the Income-tax Appellate Tribunal (the “Tribunal”) follow the following guidelines for better administration of justice before the Tribunal which will help the Bench and the Bar to save the time of the Court.
1. Before hearing of the appeal
1.1. Grounds of appeal
Rule 8 of the Income–tax (Appellate Tribunal) Rules, 1963 (the “ITAT Rules”), requires that every memorandum of appeal to be written in English and shall set forth, concisely and under distinct heads, the grounds of appeal without any argument or narrative; and such grounds shall be numbered consecutively. If the grounds filed are not in accordance with the Rules, it is advisable that the revised grounds may be filed well in advance.
1.2. Person authorised to sign the appeal and the memorandum of cross objection
As per Rule 47 of the Income-tax Rules, 1962 (the “Rules”), an appeal under section 253(1), section 253(2) or cross objection under section 253(4) of the Income-tax Act, 1961 (the “Act”) to the Tribunal shall be signed by the person specified in sub–rule (2) of Rule 45 of the Rules. As per this Rule 45(2), the grounds of appeal and the form of verification shall be signed and verified by the person who is authorised to sign the return of income under section 140 of the Act, as applicable to the assessee. As per Rule 45(2) read with section 140, only the following persons are authorised to sign the appeal or cross objection:-
(a)Individual: By the Individual himself and if the individual is absent from India, by some person duly authorised by him in this behalf;
(b) Hindu Undivided Family: By the Karta and where the Karta is absent from India, by any other adult member of such family.
(c)Company: By the Managing Director or if there is no managing director, any director thereof.
(d) Firm: By the Managing Partner or if there is no managing partner, any partner thereof, not being a minor.
(e)Limited Liability Partnership: By the designated partner or where there is no designated partner as such, any partner thereof.
(f) Local Authority: By the principal officer thereof.
(g)Association of Persons: By any member of the association or the principal Officer thereof.
(h)Non–resident company: By the power of attorney holder.
(i)Government managed company: By the principal officer thereof.
(j) Political party: By the chief executive officer of such party.
1.3. Respondent in an appeal filed by assessee
As per Rule 13 of the ITAT Rules, in an appeal filed an assessee under section 253(1) of the Act, the Assessing Officer concerned shall be made a respondent to the appeal.
On many occasions, it is seen that the assessee writes the name of the Commissioner (Appeals) who has passed the impugned order, as respondent.
1.4. Additional grounds
Rule 11 of the ITAT Rules provide that the appellant shall not, except by the leave of the Tribunal, urge or be heard in support of any ground not set forth in the memorandum of appeal.
Therefore, it is advisable for an assessee to make an application in writing containing the additional grounds, their necessity and reasons as to why it could not be filed earlier.
1.5. Supporting order appealed against on grounds decided against him
Rule 27 of the ITAT Rules provide that the respondent, though he may not have appealed, may support the order appealed against on any of the grounds decided against him.
It is desirable to make an application in writing and duly served on the other side in support of the grounds decided against him.
1.6. Appeal of assessee and the department and cross objections for the same assessment year
In the case of CST v. Vijai Int. Udyog (1985) 152 ITR 111 (SC), the Supreme Court held that when the assessee and the department are in appeal against the same order, both the appeals must be clubbed together. Now a days, the assessee can find out from the website of the Tribunal – www.itat.nic.in, whether the Department is in appeal or not. If the application is made in advance the appeals can be kept for hearing together.
1.7. Enclosure along with appeal memo
When an appeal is filed against a Transfer Pricing adjustment, the assessee may have to file the impugned order of the Transfer Pricing Officer concerned.
When an appeal is filed against the order of the Commissioner under section 263 of the Act, the impugned order of the Commissioner must be enclosed with the appeal memo.
Also, when an appeal is preferred against order levying penalty, the order of Assessing Officer confirming the disallowance/ addition in the assessment proceedings must also be enclosed. This is also required by Rule 9(2)(i) of the ITAT Rules.
1.8. Defect memo and date of hearing
At present, in Mumbai, as soon as an appeal is filed, in the acknowledgment itself, the date of hearing is intimated and the defects, if any, are informed to the assessee or to the Department, as the case may be.
Some assessees are not aware about this new system and in many cases, do not make arrangements for being represented the matter on the appointed day, which often results in an ex parte order.
To avoid this situation, it is desired that the date of hearing may be noted and defects, if any, be rectified at the earliest. It may also be noted that when a particular bench is not functioning, the matters listed before that bench for that day are posted to a different date. However, as per the practice prevailing in Mumbai, no separate notice is issued for communicating such date. This date is notified on the notice board of the Tribunal and gets updated on the website of the Tribunal. Assessees and their representatives may visit this website or www.itat.nic.in and may take a note the next date of hearing.
1.9. Presentation of paper book
The Bar and the Bench are the part of same coin, both should have mutual respect and confidence in each other then only they can play a proactive role to retain its distinction as one of the finest institutions in this country and a model for other institutions to follow
Rule 18 of the ITAT Rules deals with the requirements that a paper book must comply with. If the appellant or the respondent, as the case may be, proposes to refer or rely upon any document or statements or other papers on the file of or referred to in the assessment or appellate orders, he may submit a paper book in duplicate containing such papers duly indexed and paged, at least a day before the date of hearing of the appeal along with proof of service of a copy of the same on other side at least a week before.
It is required that the papers enclosed in the paper book must be legibly written or type written in double space or printed. If a xerox copy of a document is filed, then the same should be legible. Each paper should be certified as a true copy by the party filing the same, or his authorised representative and indexed in such manner as to give the brief description or the relevance of the document with page numbers and the Authority before whom it was filed.
Additional evidence (i.e. a document which was not filed before the lower authorities in course of the proceedings), if any, must not form part of the same paper book. If any party desires to file additional evidence, then the same must be filed by way of a separate paper book adhering to the aforementioned requirements, accompanied by an application stating the reasons for filing such additional evidence.
If paper book contains a document in any local language, the parties concerned may have to file the translated certified copy in English.
It is also important that the paper book must be serially and consecutively numbered.
As regards the case laws which are not reported in ITR or ITD, it may be desirable to file a true copy of the same duly certified by the assessee or his authorised representative.
The assessee must take due care while certifying the paper book. If the certificate is proved to be incorrect or wrong, the person who has given the certificate may be held responsible.
The parties shall not be entitled to submit any supplementary paper book, except with the leave of the Bench.
1.10. Delay in filing of appeal
If there is delay in filing the appeal by the assessee, he may have to move a condonation application duly supported by an affidavit at the time of filing the appeal itself. The affidavit must be sworn before the competent authority and must be in the prescribed manner.
1.11. Change of address – Revised Form No. 36
As per Rule 9A of the ITAT Rules, in the event of change in address of the parties to the appeal, the appellant should file a duly verified revised Form No. 36.
1.12. Bringing the legal heirs on record
As per Rule 26 of the ITAT Rules, where an assessee, whether an appellant or a respondent to an appeal, dies, the legal heirs may have to file a duly verified revised Form No. 36.The copy of death certificate along with an affidavit also requires to be fled.
1.13. Change of name and merger
When there is change in name or merger (in case of non-individual assessees), it is the responsibility of the assessee to inform the concerned authority and make an application to make necessary changes by filing a revised Form No. 36 duly verified as per Rule 47 of the Rules.
2. At the time of hearing
2.1. Dress regulation
Rule 17A of the ITAT Rules prescribes the dress regulation for the authorised representative of the parties (other than a relative or regular employee of the assessee.) The prescribed dress regulation is as follows:
In the case of male representatives, a suit with a tie or buttoned-up coat over a pant or national dress, i.e. a long buttoned-up coat or dhoti or churidar pyjama. The colour of coat must, preferably, be black.
In the case of female representatives, black coat over white or any other sober coloured saree.
However, Lawyers and Chartered Accountants may, at their option, appear in the dress, if any, prescribed.
2.2. Vakalantnama i.e. the Authority letter.(Mukhtarnama or Waklatnama)
An advocate who represents a matter before the Tribunal should file the Vakalatnama affixing proper court fee(welfare stamps) as per the relevant State law. In Maharashtra, as per The Bombay Court Fees Act, 1959 ,Schedule II, Clause 12. the proper court fee is Rs. 10. (If he is a member of a welfare scheme, additional welfare stamp of Rs. 2 must be affixed.)There are certain restrictions on Senior Advocates i.e. advocates who are designated as Senior Advocates by the Supreme Court or by any High Court under the Bar Council of India Rulesread with section 30 of the Advocates Act, 1961. Section 30 of the Advocates Act, 1961 reads as follows: (a) A senior advocate shall not file a vakalatnama or act in any court or Tribunal or before any person or other authority mentioned in section 30 of the Act. Such Senior Advocate is also not permitted to appear without a junior advocate in the Tribunal (or in any court of India). Other representatives must furnish a Power of Attorney on a non-judicial stamp paper of value specified under the relevant State Stamp law. In Maharashtra, as per article 48(a), this value is Rs. 100 for a special power of attorney and Rs. 500 in all other cases.
2.3. No objection
If any representative has filed his Vakalatnama or authority letter either at the time of filing an appeal or at the time of hearing but is not appearing in the matter, the representative actually appearing in the matter before the Tribunal must obtain a no-objection from such first mentioned representative before representing in the matter. In case the person who has filed the Vakalatnama/ Authority letter is briefing an appearing counsel and is appearing along with such counsel, then a no-objection is not required.
Section 288(2) of the Act defines the term “authorised representative” i.e. the persons who are eligible to appear before the Tribunal.
It may be appreciated that appearance before the Tribunal even for seeking an adjournment, is representation and only the persons authorised to appear as such can seek an adjournment on behalf of the assessee. It may be noted that article clerks or other staff employed by professionals are not competent to appear in this behalf in the absence of necessary authorisation.
It is desirable that the adjournment applications may be filed in advance wherever possible and a copy of the same may be forwarded to the concerned representative of the other party.
3.1. Code of ethics
The ITAT Bar Association, Mumbai (the “ITAT Bar”) and the All India Federation of Tax Practitioners (“AIFTP”) have adopted a code of ethics for its members (www.itatonline.org /www.aiftponline.org / AIFTP Journal May’ 2002 P. 14) It is desired that the professionals who represent matters before the Tribunal are requested to follow this code and make a sincere attempt to preserve the dignity, sanctity and purity of the Tribunal. The ITAT Bar also has an ethics committee chaired by eminent professionals. Professionals or even assessee may bring to its notice, any unethical practice adopted by professional in course of his/ her appearance before the Tribunal. The Committee will recommend appropriate action if the professionals found to be guilty.
The suggestions made by the Registrar for guidance of assessee and their representatives – reported in (1951) 20 ITR 49(St.) – may also be considered.
3.2. Members of the Tribunal
Members of the Tribunal must also bear in mind that in hearing the appeals they are not merely adjudicating on the issues before them but they are invariably deciding on the fortune of the assessee. While one wrong decision against an assessee may ruin his life and relegate him to the position of a pauper, the same against the Government may affect the coffers of the Government to an extent of a drop in an ocean. Hence, the Tribunal has a greater responsibility to the taxpayers of our country. For over seven decades, the Tribunal has proved that aggrieved assessee do get the deserved justice from the final fact finding authority.
3.3. A partnership among equals
The Bar and the Bench are the part of same coin, both should have mutual respect and confidence in each other then only they can play a proactive role to retain its distinction as one of the finest institutions in this country and a model for other institutions to follow. We do hope that professionals who appear before the Tribunal make a sincere attempt to follow the ITAT Rules which will help this Institution in better administration of justice. Readers may send their objective suggestions on law and procedure for better administration of justice before the Tribunal to the office of the AIFTP addressed to the Chairman ITAT Bar Association’s co-ordination committee or send email to, email@example.com for taking up the issues with appropriate authority.
Dr. K. Shivaram
Editor-in-Chief, AIFTP Journal
Reproduced with permission from the AIFTP Journal, August 2013