E-Appeals Scheme Expanded

[Vivek Jalan]

The e-Appeals Scheme, 2023 will usher a digital platform to handle appeals filed under Section 246 and/or certain clauses of Section 246A of the Income-tax Act, 1961. Taxpayers will be able to file and track their appeals online. The order on June 16, 2023 expands the scope of the e-Appeals Scheme, 2023 under Section 246(6) of the Income-tax Act, 1961. While most appeals fall under this scheme, certain exceptions exist, as discussed hereinunder:

1. Exclusion based on Nature of Assessment Orders: Appeals against assessment orders passed before August 13, 2020, under S143(3) or 144 of the Income Tax Act, with a disputed demand exceeding Rs 10 lakh, are not covered by the e-Appeals Scheme.

2. Exclusion based on Assessments:

i) Assessment orders passed with respect to cases falling under the jurisdiction of the Commissioner of Income-tax (Central).

ii) Assessments completed in response to a search conducted under Section 132 or requisition made under Section 132A.

iii) Assessments completed as a result of any action taken under Section 133A.

iv) Assessments where additions or variations in income are made based on seized or impounded material.

3. Appeals Excluded based on Jurisdiction:

Appeals falling under the jurisdiction of the Commissioner of Income-tax (International Taxation) are not covered by the e-Appeals Scheme.

4. Appeals Excluded based on Penalty Orders:

i) Appeals against penalty orders passed before January 12, 2021, related to cases mentioned in category (1) with a disputed demand exceeding Rs. 10 lakh are not covered.

ii) Appeals against penalty orders in cases mentioned in points 1 to 4 of category (2) and category (3) are excluded.

5. Appeals Excluded based on e-Assessment and Faceless Schemes

i) Appeals against assessment orders passed on or after September 12, 2019, under the eAssessment Scheme, 2019, the Faceless Assessment Scheme, 2019 or Section 144B of the Act are not covered.

ii) Appeals against penalty orders passed on or after January 12, 2021, under the Faceless Penalty Scheme, 2021 are excluded.

The CBDT order provides a clear definition of “disputed demand” for the purpose of this scheme. It includes the following elements:

i) The difference between the tax on the total income assessed and the tax on the returned income, if filed.

ii) Tax on the total income assessed in cases where no return has been filed.

iii) For penalty orders, the amount of penalty imposed under Chapter XXI of the Act.

iv) Demands raised through notices under Section 156 or intimation issued under sub-section (1) of Section 143 or sub-section (1) of Section 200A or sub-section (1) of Section 206CB, in any other case.

This includes applicable interest, surcharge and cess.