CBDT’s E-Appeals Scheme: Simplifying Caseload Management

Effortlessly handles appeals with CBDT's newly notified e-appeals scheme. Streamline caseload management for increased efficiency.

Introduction

The Central Board of Direct Taxes (CBDT) has recently introduced the E-Appeals Scheme, 2023, aimed at expediting the hearing of appeals in Income Tax matters. The scheme seeks to address the backlog of pending cases at the Commissioner of Income-Tax (Appeals) level and streamline the appeal disposal process. This blog post provides an overview of the scheme and its key features.

Key Features of the E-Appeals Scheme, 2023

1. Expansion of Authority: Under the new scheme, appeals against orders passed by Income Tax officials below the rank of Joint Commissioner will be heard by the Joint Commissioner of Income Tax (Appeals) or JCIT (A) under the newly substituted Section 246 of the Income Tax Act. However, cases that are not eligible for appeal with JCIT (A) will be excluded from the scheme.
2. Show Cause Notices and Penalties: JCIT (A) has been granted the authority to issue Show Cause Notices and impose penalties for non-compliance during the appeal process. They can also rectify their orders in accordance with the provisions of the Income Tax Act.
3. Personal Hearings via Video-Conference: The scheme allows for personal hearings via video-conference or video telephony upon request. This feature enables effective communication between the JCIT (A) and taxpayers, ensuring a fair and efficient appeal process.
4. Mandatory Admission of Additional Grounds and Evidence: The scheme makes the admission of additional grounds of appeal and evidence mandatory for certain types of appeals. This requirement ensures a comprehensive and thorough examination of all relevant aspects of the case.
5. Streamlined Communication: Unlike the Faceless Appeals Scheme, 2021, the E-Appeals Scheme, 2023 facilitates direct communication between the JCIT (A) and taxpayers through the income tax portal. This eliminates the involvement of the National Faceless Appeal Centre (NFAC), leading to faster communication and reduced appeal processing time.

Scope of Scheme

The scheme applies to appeals filed by individuals or specific groups of individuals, related to their income or specific categories of income, and cases or specific types of cases. The scheme covers the appeals falling under section 246 of the Income-tax Act, except for cases that are specifically excluded under sub-section (6) of that section.

Benefits for Taxpayers

The introduction of the E-Appeals Scheme, 2023 is expected to have several benefits for individual taxpayers:

1. Faster Disposal of Appeals: The scheme aims to speed up the disposal of appeals that have been lingering for years. By addressing the backlog of cases at the Commissioner of Income-Tax (Appeals) level, taxpayers can expect quicker resolution of their appeals.
2. Improved Efficiency and Quality: The scheme enhances the efficiency and quality of appeal disposal by providing a structured and streamlined process. The involvement of JCIT (A) allows for personalized attention to each case, resulting in a fair and thorough examination of the appeal.
3. Relief for Taxpayers: The timely disposal of appeals brings relief to taxpayers who have been awaiting resolution. The scheme ensures that their concerns and disputes are addressed promptly, reducing the financial and emotional burden associated with prolonged appeals.

Procedure in Appeal

1. The appeal is handled by the JCIT (Appeals) under this Scheme, following these steps:
   • If the appeal is filed late, the JCIT (Appeals) can forgive the delay and note the reasons for the forgiveness.
   • The appellant is given a notice to submit their arguments within a specified deadline, and a copy of the notice is sent to the Assessing Officer.
   • The JCIT (Appeals) can request additional information, documents, or evidence from the appellant or anyone else involved.
   • They may also ask the Assessing Officer to provide a report on the grounds of appeal or any information, documents, or evidence provided by the appellant.
   • The JCIT (Appeals) can request the Assessing Officer to conduct further inquiries and provide a report.
   • They issue a notice to the appellant, any other person, or the Assessing Officer to submit specific information, documents, evidence, or a report relevant to the appeal proceedings.
2. The appellant, any other person involved, or the Assessing Officer must respond within the specified deadline, or they can request an extension of time.
3. The Assessing Officer provides the required report within the specified deadline or an extended deadline if allowed.
4. The appellant has the option to file additional grounds of appeal to the JCIT (Appeals) in a specified format, explaining why they omitted those grounds in the original appeal.
5. If additional grounds of appeal are filed:
   • For certain types of orders, the JCIT (Appeals) admits the additional grounds.
   • For other cases, the JCIT (Appeals) sends the additional grounds to the Assessing Officer for their comments.
   • The Assessing Officer provides their comments within the specified deadline or an extended deadline if allowed.
   • Based on the comments received, the JCIT (Appeals) either admits the additional grounds if there was a valid reason for the omission or rejects them.
6. The appellant can provide additional evidence, different from what was presented before the Assessing Officer, to the JCIT (Appeals) in a specified format. They need to explain how their case falls under exceptional circumstances specified in the rules.
7. If additional evidence is submitted:
   • For certain types of orders, the JCIT (Appeals) admits the additional evidence.
   • For other cases, the JCIT (Appeals) sends the additional evidence to the Assessing Officer to determine its admissibility according to the rules.
   • The Assessing Officer provides a report on the admissibility of the additional evidence within the specified deadline or an extended deadline if allowed.
   • The JCIT (Appeals) considers the additional evidence and the report, if any, and decides whether to admit or reject the additional evidence based on written reasons.
8. If the JCIT (Appeals) admits the additional evidence, they prepare a notice for the Assessing Officer, giving them an opportunity to examine the evidence, cross-examine witnesses, provide counter-evidence, or documents.
9. The Assessing Officer submits a report within the specified deadline or an extended deadline if allowed.
10. The Assessing Officer can request the JCIT (Appeals) to direct the production of specific documents or evidence or the examination of relevant witnesses.
11. The appellant or any other person involved must respond to the notice by the specified deadline or an extended deadline if allowed, providing their input to the JCIT (Appeals).
12. If the JCIT (Appeals) intends to increase the assessment, penalty, or reduce the refund amount, they prepare a show-cause notice stating the reasons and serve it to the appellant.
13. The appellant must respond to the show-cause notice within the specified deadline or an extended deadline if allowed.
14. The JCIT (Appeals) prepares a written appeal order according to the provisions of the Act, stating the points for determination, the decision, and the reasons for the decision.
15. The signed digital order is sent to the appellant along with details of any penalty proceedings.
16. The order is communicated to the Principal Chief Commissioner, Chief Commissioner, Principal Commissioner, or Commissioner, as required by the Act.
17. The order is communicated to the Assessing Officer for necessary actions.
18. If the order recommends imposing a penalty, a notice is served to the appellant to explain why the penalty should not be imposed under the relevant provisions of the Act.

Additionally, it’s important to note that the appeal may be transferred to another JCIT (Appeals) at any stage if deemed necessary, based on an order issued in accordance with the Act.

Penalty Proceedings

1. During the appeal proceedings, if the appellant or any other person doesn’t comply with any notices, directions, or orders issued under this Scheme, the JCIT (Appeals) can send them a notice to initiate penalty proceedings. The notice asks them to explain why a penalty shouldn’t be imposed on them under the relevant laws.
2. The appellant or the other person involved must respond to the penalty notice within the specified deadline. They need to provide their explanation as to why the penalty should not be imposed. If they need more time, they can request an extension.
3. The JCIT (Appeals) will consider all the relevant information and material available, including the response provided by the appellant or the other person. Based on this, they will:
   • Prepare a penalty order and send a copy of it (digitally signed) if they decide to impose a penalty, or
   • Drop the penalty and inform the appellant or the other person (in writing) if they find reasons not to impose a penalty.

The JCIT (Appeals) will also notify the Assessing Officer about their decision, and the Assessing Officer will take any necessary action based on the decision and the requirements of the law.

Rectification Proceedings

1. The JCIT (Appeals) has the authority to correct any mistake that is evident from the records. They can do this by issuing a written order to amend any previous orders they have passed, following the rules stated in the law.
2. If someone wants to rectify a mistake, they can submit an application to the JCIT (Appeals) for rectification. This application can be filed by either:
   • The appellant or any other person involved, depending on the case.
   • The Assessing Officer (a tax officer responsible for assessing tax liabilities).
3. The JCIT (Appeals) will review the application and issue a notice. This notice will grant an opportunity for:
   • The appellant or any other person (if the application was filed by the Assessing Officer) to explain why the mistake should be rectified.
   • The Assessing Officer (if the application was filed by the appellant or any other person) to provide reasons against rectification.
4. The appellant or any other person, as well as the Assessing Officer, should respond to the notice within the specified deadline. They may also request an extension if needed.
5. After considering the application and the responses received, if any, the JCIT (Appeals) will make a decision and issue a written order. They can:
   • Rectify the identified mistakes.
   • Reject the application for rectification, providing written reasons for the decision.
6. The JCIT (Appeals) will digitally sign the order and send it to both:
   • The appellant or any other person involved.
   • The Assessing Officer, who will take necessary action based on the order and the relevant provisions of the law.

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No Personal Appearance Under the Scheme

1. You don’t have to physically appear or send someone on your behalf for any proceedings under this Scheme.
2. However, if you want to have a personal hearing to present your case directly to the JCIT (Appeals), you or your authorized representative can request it. The JCIT (Appeals) will then allow the request and inform you of the date and time for the hearing.
3. The personal hearing will be conducted through video conferencing or video telephony. This means you can participate and present your case remotely using software or applications that support video communication. The Board has established a procedure for this.
4. If there is a need for any examination or recording of your statement or the statement of any other person involved, it will be done exclusively through video conferencing or video telephony. The Board has laid down a procedure for this as well.
5. The Board will make sure that suitable facilities for video conferencing or video telephony, including the necessary software or applications, are available at different locations. This ensures that you, your authorized representative, or any other person involved can benefit from this Scheme, even if they don’t have access to video conferencing or video telephony technology at their end.

Functions of the Principal Chief Commissioner of Income-Tax National Faceless Appeal Centre

The Principal Chief Commissioner of Income-tax (National Faceless Appeal Centre) is responsible for ensuring the smooth functioning of the Office of the JCIT (Appeals) established under this Scheme. Their main tasks include:

1. Transferring cases in and out of the e-appeal Scheme.
2. Transferring cases from one JCIT (Appeals) to another.
3. Coordinating with the Principal Director General or Director General of Income tax (Systems) to develop processes for allocating appeals, if needed.
4. Approving the formats of notices or letters.
5. Issuing Standard Operating Procedures (SOPs) for various processes and conducting Video Conferences.
6. Carrying out any other procedural functions assigned by the Board.

In simpler terms, this person has important responsibilities to ensure that appeals are handled properly and efficiently within the scheme. They deal with case transfers, coordination, approving formats, creating procedures, and other tasks as directed by the Board.

Power to Specify Format, Mode, Procedure and Processes

The Principal Director General or the Director General of Income-tax (Systems), in consultation with the Principal Chief Commissioner of Income-tax (National Faceless Appeal Centre), has the responsibility of establishing the standards, procedures, and processes for the smooth functioning of the Office of the JCIT (Appeals) under this Scheme. These standards and processes will be designed to work in an automated and mechanized environment. The following aspects will be covered with the prior approval of the Board:

1. Serving notices, orders, or any other communication to the relevant parties.
2. Receiving information or documents from individuals in response to notices, orders, or other communications.
3. Providing acknowledgment for the responses submitted by individuals.
4. Offering an “e-appeal” facility that includes features like login accounts, tracking the status of appeals, displaying relevant details, and downloading necessary documents.
5. Accessing, verifying, and authenticating the information and responses, including documents, submitted during the appeal proceedings.
6. Managing the receipt, storage, and retrieval of information or documents in a centralized manner.
7. Handling any other functions assigned by the Board as needed.

In simpler terms, the Principal Director General or the Director General of Income-tax (Systems) works with the Principal Chief Commissioner to create rules and procedures that ensure the smooth operation of the JCIT (Appeals) office. They focus on automating processes, including serving notices, receiving information, providing acknowledgments, offering online appeal options, verifying and storing documents, and performing any other tasks assigned by the Board.

Conclusion

In conclusion, the National Faceless Appeal Centre, along with the Principal Director General or the Director General of Income-tax (Systems), plays a crucial role in implementing the provisions of the Scheme. They establish standards, procedures, and processes to ensure the efficient functioning of the Office of the JCIT (Appeals) in a technologically advanced and automated environment. These measures aim to simplify and streamline the appeal process, making it more accessible and convenient for taxpayers. By leveraging technology and centralizing information management, the Scheme seeks to enhance transparency, effectiveness, and fairness in resolving income tax appeals.

FAQs:

What is CBDT's E-Appeals Scheme 2023?

The CBDT has introduced the e-Appeals Scheme, 2023, a digital platform for managing appeals filed under specific sections of the Income-tax Act, 1961.

How does the E-Appeals Scheme facilitate taxpayers?

The e-Appeals Scheme 2023 enforces electronic submission and processing for a streamlined appeals process. This eliminates paper-based complexities, reducing errors and delays, and offers taxpayers a user-friendly digital experience.

What types of appeals can be filed under the E-Appeals Scheme 2023?

The key focus of the e-Appeals Scheme 2023 is appeals pertaining to individuals or groups, certain income types, and cases under Section 246 of the Income Tax Act, excluding those specified in Section 246(6).

What are the key features of the E-Appeals Scheme that differentiate it from the traditional appeal process?

Strengthening the Authority of Joint Commissioner (Appeals) Utilising Video Conferencing for Personal Hearings. Modifications to the Income Tax Act. Assignment of Joint Commissioners. Emphasis on TDS Default and Income Return Processing. Minimising Backlog and Improving Efficiency.

Are there any prerequisites or eligibility criteria for taxpayers to use the E-Appeals Scheme?

Taxpayers looking to utilise the E-Appeals Scheme must satisfy the eligibility conditions set by the tax authorities. These criteria may include specific income categories and cases under relevant sections of the Income Tax Act.

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