Income Tax Appeals Before CIT (A), NFAC
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Income Tax Appeals to Appellete Authorities
What Can Be Appealed?
Section 246A of the Income Tax Act lists the orders you're entitled to challenge before the CIT(A). The most common ones include:
- Scrutiny assessment orders passed under Section 143(3).
- Best judgment assessment orders passed under Section 144, where the AO has assessed income without full cooperation from the taxpayer.
- Reassessment orders passed under Section 147.
- Penalty orders under various sections, including those for concealment of income or non-compliance.
- Orders determining tax liability, interest, or refund adjustments where the taxpayer disputes the computation.
An assessment order is not the final word — it's the department's position, open to challenge through the appeal process.
How the Appeal Is Filed
- Filed electronically through the Income Tax e-filing portal (traditionally Form 35 — form numbering is being updated as the Income-tax Act, 2025 rolls out, so it's worth confirming the current prescribed form at the time of filing).
- Time limit: 30 days from the date of service of the order or notice of demand being appealed, under Section 249(2).
- Appeal fee is tiered by assessed income — typically ₹250, ₹500, or ₹1,000 depending on whether assessed income is up to ₹1 lakh, up to ₹2 lakh, or above ₹2 lakh respectively.
- Statement of Facts and Grounds of Appeal must be filed along with the form — these define the entire scope of what the CIT(A) will examine, so their quality matters more than most taxpayers realise.
- Most appeals are processed through the National Faceless Appeal Centre (NFAC), with submissions and hearings largely conducted electronically rather than in person.
Filing an Appeal Doesn't Automatically Stop Recovery
This is one of the most misunderstood parts of the process:
- The demand remains payable once the assessment order is passed — filing an appeal does not suspend it by itself.
- A separate stay of demand application must be filed under Section 220(6) to hold recovery in abeyance while the appeal is pending.
- CBDT guidance typically expects a 20% pre-deposit of the disputed demand before a stay is granted, though this can vary by case.
- Ignoring this step is a common, costly mistake — taxpayers sometimes discover their bank account has been attached or a refund adjusted against the demand while their appeal is still pending, simply because no stay was applied for.
What Happens During the Appeal
- Additional evidence not produced before the Assessing Officer can only be admitted at the CIT(A)'s discretion, under Rule 46A, and only in limited circumstances — such as where the AO refused to admit it or the taxpayer genuinely lacked opportunity.
- The CIT(A) has the power to enhance the assessment under Section 251 — meaning an appeal can, in principle, result in a higher liability, not just a lower one — though this can only happen after giving the taxpayer a proper opportunity to be heard on the proposed enhancement.
- Typical timeline from filing to order varies widely — often several months to over a year, depending on the complexity of the matter and the CIT(A)/JCIT(A)'s existing caseload.
If You Disagree With the CIT(A) Order — Appeal to ITAT
- Filed via Form 36 with the Income Tax Appellate Tribunal.
- Time limit: 60 days from the date the CIT(A) order is communicated.
- ITAT fee is also income-tiered — broadly ₹500, ₹1,500, or 1% of assessed income (capped), depending on the income slab.
- The ITAT is the final fact-finding authority — appeals beyond this level, to the High Court, are generally restricted to substantial questions of law rather than a fresh review of facts.
Why Getting the Appeal Right Matters
- The grounds of appeal set the boundaries of the entire case — vague or poorly drafted grounds can permanently limit what arguments are even available to raise later.
- Missing the 30-day (or 60-day, for ITAT) deadline puts you at the mercy of a discretionary condonation application, which is not guaranteed to succeed.
- Not applying for a stay of demand leaves your bank accounts and refunds exposed to recovery action even while a genuinely strong appeal is pending.
- A well-prepared Statement of Facts, backed by proper documentation, is often what actually decides an appeal — not just the legal argument on paper.
Income Tax Appeal Services by Tulshyan & Co.
- Tulshyan & Co., Chartered Accountants in Kamal Vihar, Raipur, represents individuals and businesses at both the CIT(A)/JCIT(A) stage and before the ITAT — drafting grounds of appeal, filing stay of demand applications, and presenting the case through to resolution.
Get in touch with Tulshyan & Co. if you've received an assessment order you want to challenge.
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