Notice Under Section 249

Section 249. Form of appeal and limitation

(1) Every appeal under this Chapter shall be in the prescribed form and shall be verified in the prescribed manner.

(2) The appeal shall be presented within thirty days of the following date, that is to say,—

(a) where the appeal is under section 248, the date of payment of the tax or
(b) where the appeal relates to any assessment or penalty, the date of service of the notice of demand relating to the assessment or penalty:

(c) in any other case, the date on which intimation of the order sought to be appealed against is served.

(3) The Commissioner (Appeals) may admit an appeal after the period expires if he is satisfied that the taxpayer had sufficient cause for not presenting it. Examples of such reasons could include serious illness, natural disasters, or other unforeseen circumstances.

(4) No appeal under this Chapter shall be admitted unless at the time of filing of the appeal,—

(a) where the taxpayer has filed a return, the taxpayer has paid the tax due on the income returned by them, or

(b) where the assessee has filed no return, the assessee has paid an amount equal to the amount of advance tax which was payable by him:

Provided that, in a case falling under clause (b) and on an application made by the appellant on this behalf, the Commissioner (Appeals) may, for any good and sufficient reason to be recorded in writing, exempt him from the operation of the provisions of that clause.

Purpose of Section 249

Section 249 provides taxpayers with a structured process to challenge orders passed by the assessing officer or other tax authorities. The fundamental purposes include:

• Ensuring a fair and orderly process for appeals.
• Providing a time-bound framework for lodging appeals.
• Offering taxpayers a recourse to seek redressal for grievances regarding assessments, penalties, or other tax-related orders.

Example

Consider Mr. A, a salaried individual who receives a notice of demand for an additional tax liability of ₹50,000 after his tax assessment. Mr A believes there has been a miscalculation in his tax liability. According to Section 249, Mr. A has 30 days from the date of service of the notice of demand to file an appeal with the CIT(A). If he received the notice on April 1st, he must file his appeal by May 1st. If Mr. A misses this deadline, he can still file the appeal by providing a valid reason for the delay, which the CIT(A) may accept at their discretion.

Penalties and Prosecutions

Failure to file an appeal within the stipulated time frame without a valid reason can lead to several consequences:

• The taxpayer loses the opportunity to challenge the assessment or penalty order.
• The tax demand becomes enforceable, and the tax authorities may initiate recovery proceedings.
• Interest and penalties may continue to accrue on the outstanding tax amount.
• In extreme cases, continued non-compliance can lead to prosecution under various sections of the Income-tax Act.

Legal Recourse

Taxpayers who miss the appeal deadline can still seek legal recourse:

• Condonation of Delay: This is a legal term for forgiving a delay. In the context of tax appeals, the taxpayer can file an appeal even after the 30-day deadline, providing a genuine reason for the delay. The CIT(A) can accept the appeal if satisfied with the reason.
• Higher Authorities: If the appeal is rejected, the taxpayer can approach higher appellate authorities such as the Income Tax Appellate Tribunal (ITAT), the High Court, or even the Supreme Court, depending on the case’s specifics.

Legal Proceedings

Upon receipt of a notice under Section 249, the following legal proceedings typically ensure:

1. Filing the Appeal: The taxpayer files the appeal in the prescribed form within 30 days of the notice.
2. Review by CIT(A): If applicable, CIT(A) reviews the appeal, including any supporting documents and reasons for delay.
3. Hearing: The CIT(A) may call for a hearing where the taxpayer and the assessing officer can present their arguments.
4. Order: The CIT(A) passes an order based on the case’s merits, which may confirm, reduce, enhance, or annul the assessment or penalty.

What Should Be Done on Receipt of the Notice

Upon receiving a notice under Section 249, the taxpayer should:

1. Review the Notice: It’s of utmost importance to thoroughly understand the notice under Section 249. This will not only make you feel more informed and prepared for the appeal process but also help you comprehend the tax demand or penalty grounds.
2. Gather Documentation: Collect all relevant documents, including the original assessment order, which is the official document that states the amount of tax a taxpayer is liable to pay based on their income, notice of demand, and supporting evidence.
3. Seek Professional Advice: It’s highly recommended to consult a tax professional or legal advisor. Their expertise will help you understand the implications of the notice, guide you through the appeal process, and provide you with the necessary support. This will make you feel more confident and prepared.
4. File the Appeal Promptly: It’s crucial to ensure the appeal is filed within the 30-day limit. If there’s a delay, provide a valid reason and file for condonation. This will help you realize the urgency and importance of the process.
5. Prepare for Hearing: Be ready to present the case before the CIT(A), including all arguments and evidence.

By following these steps, taxpayers can effectively navigate the appeal process and seek a fair resolution of their tax matters.