Section 250

Section 250. Hearing of appeal

(1) The Commissioner (Appeals) shall fix a day and place for the appeal hearing and give notice to the appellant and the Assessing Officer against whose order the appeal is preferred.

(2) The following shall have the right to be heard at the hearing of the appeal— (a) the appellant, either in person or by an authorised representative; (b) the Assessing Officer, either in person or by a representative.

(3) The Commissioner (Appeals) shall have the power to adjourn the appeal hearing occasionally.

(4) The Commissioner (Appeals) may, before disposing of any appeal, make such further inquiry as he thinks fit or may direct the Assessing Officer to make further inquiry and report the result of the same to the Commissioner (Appeals).

(5) The Commissioner (Appeals) may, at the hearing of an appeal, allow the appellant to go into any ground of appeal not specified in the grounds of appeal if the Commissioner (Appeals) is satisfied that the omission of that ground from the form of appeal was not wilful or unreasonable.

(6) The order of the Commissioner (Appeals) disposing of the appeal shall be in writing, and the points for determination, the decision thereon, and the reason for the decision shall be stated.

(7) On the disposal of the appeal, the Commissioner (Appeals) shall communicate the order passed by him to the assessee and the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner and the Assessing Officer.

(8) Where an order under sub-section (6) is passed in respect of an appeal filed by an assessee, the order shall be passed within one year from the end of the financial year in which the appeal is filed:

The Commissioner (Appeals) may, on sufficient cause being shown, pass an order within a year after recording the reasons in writing for not passing the order within the initial year.

Purpose of Section 250

The primary purposes of Section 250 include:

• Establishing a fair and transparent process for hearing appeals.
• Ensuring timely disposal of appeals by setting a clear time frame for passing orders.
• Providing an opportunity for the appellant and the Assessing Officer to present their cases.
• Allowing for further inquiries if necessary to reach a fair decision.

Example

Consider a taxpayer, Ms. C, who took an active role in her tax affairs. She filed an appeal with the CIT(A) on June 20, 2023, challenging the assessment order issued by the Assessing Officer. According to Section 250(8), the CIT(A) must dispose of the appeal by passing an order by March 31, 2025 (one year from the end of the financial year in which the appeal was filed). If the CIT(A) needs more time, they must record the reasons in writing and can extend the deadline by another year until March 31, 2026.

Penalties and Prosecutions

While Section 250 does not directly impose penalties or prosecutions for delays by the CIT(A), the consequences for the taxpayer can include:

• Continued accrual of interest on any outstanding tax liabilities.
• Prolonged uncertainty regarding the final tax liability, affecting financial planning.
• Potential initiation of recovery proceedings by the tax authorities, depending on the case’s specifics.

Legal Recourse

If the CIT(A) fails to dispose of the appeal within the stipulated time frame, the taxpayer needs to be aware of the following legal recourses:

• Writ Petition: The taxpayer can file a writ petition in the High Court under Article 226 of the Constitution of India, seeking a directive for the CIT(A) to expedite the disposal of the appeal.
• Higher Authorities: If dissatisfied with the CIT order (A), the taxpayer can appeal to the Income Tax Appellate Tribunal (ITAT) and, if necessary, to the High Court or Supreme Court.

Legal Proceedings

The legal proceedings under Section 250 typically involve the following steps:

1. Filing the Appeal: The taxpayer files the appeal with the CIT(A), including all relevant documents and grounds for the appeal.
2. Notice of Hearing: The CIT(A) issues a notice for the hearing, specifying the date and place.
3. Hearing: Both the taxpayer and the Assessing Officer present their cases. The CIT(A) may allow additional grounds to be raised or direct further inquiries if needed.
4. Order: The CIT(A) passes a written order stating the points for determination, decisions, and reasons. This order is communicated to the taxpayer and relevant tax authorities.

What Should Be Done on Receipt of the Notice

Upon receiving a notice of hearing from the CIT(A) under Section 250, the taxpayer should:

1. Review the Notice: Understand the hearing’s date, time, and place and the specific issues to be addressed.
2. Prepare Documentation: Gather all necessary documents, including the assessment order, grounds of appeal, and any supporting evidence.
3. Consult a Tax Professional: To present the case effectively, seek advice from a tax consultant or legal advisor.
4. Attend the Hearing: Ensure attendance at the hearing, either personally or through an authorised representative, to present arguments and evidence.
5. Follow-up: After the hearing, follow up with the CIT(A)’s office to ensure timely receipt of the order and understand its implications.

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