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Section 250 of Income Tax Act- All That You Need to Know

Updated: Jan 11


Section 250 of Income Tax Act - Regulations, Deductions and Powers

Section 250 of the Income Tax Act provides guidelines to taxpayers to file an appeal with the Commissioner (Appeals) when they are aggrieved by an order passed by the Assessing Officer. The Commissioner (Appeals) is an appellate authority with the power to hear and address appeals filed by taxpayers. The section gives the procedure for filing an appeal and defines the powers of the Commissioner (Appeals) in handling such appeals. In this article, we will share all that you need to know about the importance, regulations, provisions, and deductions related to Section 250.

 

Table of Content

 

What is Section 250 of the Income Tax Act?

Section 250 is a key element of the Income Tax Act, specifically focusing on the appeal process available to taxpayers. An individual denied tax deduction in diverse cases can make an appeal to the tax authorities. Additionally, Section 250 offers legal resources to taxpayers who do not agree to orders passed by an Assessing Officer. 

The regulation defines the powers of the Commissioner of Income Tax (CT) Appeals when they address a case, such as the way to conduct litigation or pass an order. The Commissioner can rectify a mistake apparent from the existing record. These include arithmetical or clerical errors, mistakes related to the record, or incorrect application of facts.


Who Can File an Appeal Under Section 250?

Anyone aggrieved by an order of the Assessing Officer can file an appeal under section 250 of the Income Tax Act. It includes:

  • Individuals

  • Hindu Undivided Families (HUFs)

  • Firms

  • Companies

  • Any other entity liable to pay income tax

They can file an appeal  in respect of any disputed issue, including assessment of income, the quantum of income liability, and disallowance of expenses.


Regulations of Section 250 of the Income Tax Act 

Section 250 of the Income Tax Act gives the following regulations and provisions that apply in different circumstances:


Section 250 (1): The Commissioner schedules a day and fixes a venue to hear the appeal. He also notifies the appellant and Assessing Officer about these details.


Section 250 (2): The following individuals can rightfully speak during the hearing:

  • Appellant (in-person or by a lawful representative)

  • Assessing officer (in-person or by a lawful representative)

Section 250 (3): The Commissioner can adjourn any hearing of appeal at any point in time.


Section 250 (4): Before dismissing an appeal, the Commissioner may find a reason to conduct further inquiries himself or order an Assessing Officer to inquire and give a report to him. 


Section 250 (5): During appeal proceedings, the Commissioner (Appeals) permits the appellant to provide new grounds for appeal that were not initially included. However, the inclusion should be both reasonable and unintentional. 


Section 250 (6): The Commissioner (Appeals) must provide a written decision in the event of dismissal of an appeal. The decision should give the reasons for dismissal along with the underlying rationale and conclusion. 


Section 250 (6A): Whenever feasible, the Commissioner (Appeals) should strive to hear and decide on appeals within a year following the end of the financial year when the appeal was filed under Section 246A sub-section (1). 


Section 250 (6B): The Central Government has established a scheme to streamline the appeal process with greater efficiency, clarity, and accountability. The scheme, published in the Official Gazette, states: 

  • Limit direct interactions between the appellant and the Commissioner to a feasible minimum

  • Optimise resource utilisation t