Section 250 Of Income Tax Act: Importance, Regulations And Deductions

The Income Tax Act of 1961 governs different taxation laws of India, providing transparency to taxpayers regarding their tax payments, deductions and exemptions. One important Section for the taxpayers to consider is Section 250.

This article will provide comprehensive details on Section 250 and its regulations, provisions and deductions.

What Is Section 250 Of Income Tax Act?

Section 250 of the Income Tax Act 1961 focuses on the appeal process available to taxpayers. Here, an individual who is denied tax deduction in different cases can make an appeal. The regulation describes the powers and processes of the Commissioner of Income Tax (CT) Appeals whenever any case is presented to them, such as the way to carry out any litigation or passing a significant order.

Moreover, Section 250 provides taxpayers with legal resources who have been aggrieved by the orders passed by an Assessing Officer. The Commissioner can rectify any mistake which is apparent from the existing record. This includes arithmetical or clerical errors, incorrect application of facts or laws or other errors related to the record.

CrPC - Section 250

CrPC, or Code of Criminal Procedure of Section 250, deals with compensation for any accusation without a valid cause. The provisions of this section are as follows:

• If an individual is accused of any crime based on information or complaint provided to a Magistrate or police and they find the basis of the accusation is unreasonable, the Magistrate can order the individual making a complaint to explain why they shall not compensate the accused.
• The Magistrate must document and assess any argument presented by the complainant or informant. If convinced that the accusation lacks merit, the Magistrate can, with documented justification, issue an order requiring the complainant or informant to pay compensation.
• This compensation should not exceed the fine amount that the Magistrate has the authority to impose, as deemed appropriate in each case, either to the accused or any of them.

Section 250 Regulations 

The different regulations and provisions related to Section 250 of the Income Tax Act are discussed below.

Section 250 (1)

The Commissioner will schedule a day and fix a venue to hear the appeal and notify the appellant and Assessing Officer against whom the appeal was favoured.

Section 250 (2)

The following individuals will have the right to speak during the hearing of appeal -

• Appellant, either in-person or by a lawful representative.
• Assessing Officer, either in-person or by a lawful representative.

Section 250 (3)

The Commissioner has the power to adjourn any hearing of appeal at certain intervals.

Section 250 (4)

The Commissioner, before dismissing an appeal, may find a proper reason to make further inquiries himself or direct an Assessing Officer to inquire and present the result before the Commissioner.

Section 250 (5)

Here, the Commissioner (Appeals), during appeal proceedings, permits the appellant to introduce new grounds for appeal not initially included, provided that the Commissioner deems this inclusion to be both unintentional and reasonable.

Section 250 (6)

In the event of an appeal being dismissed, the Commissioner (Appeals) must provide a written decision. This decision should comprehensively outline the reasons for dismissal, underlying rationale, and conclusion reached.

Section 250 (6A)

It emphasises that the Commissioner (Appeals), whenever feasible, should strive to hear and make determinations on appeals within a year following the closure of the financial year in which the appeal was lodged under sub-section (1) of Sec. 246A.

Section 250 (6B)

In this case, the Central Government established a scheme published in the Official Gazette to streamline the appeal process. This scheme seeks to achieve greater efficiency, clarity, and accountability by:

• Reducing direct interactions between Commissioner and appellant to a technologically feasible minimum.
• Optimising resource utilisation through economies of scale and specialisation.
• Introducing an appellate system with shared jurisdiction, where one or more Commissioners may jointly dismiss an appeal.

Section 250 (6C)

The Central Government implements the scheme outlined in subsection 6(B) by issuing notifications in the Official Gazette, specifying whether any provisions regarding jurisdiction and the dismissal process of appeals by the Commissioner are applicable or not. Such notifications may include deviations, modifications, or adaptations as needed.

Section 250 (6D)

All notifications issued under subsections 6(B) and 6(C) must be promptly presented before both Houses of Parliament after they are published.

Section 250 (7)

If an appeal is dismissed, the Commissioner (Appeals) is responsible for communicating the issued order to both appellant and Principal Chief Commissioner, Principal Commissioner, or Commissioner Chief Commissioner.

Section 250 Deduction

Deductions under Section 250 can be claimed for Foreign Derived Intangible Income (FDII) and Global Intangible Low-Taxed Income (GILTI). Form 8993 is used to understand the eligible amount of deduction for both GILTI and FDII. The form needs to be attached to the income tax return and be filled out by the due return date.

Section 250 Notice

Under Section 250 of the IT Act, the Appellate Assistant Commissioner can decide on a date and place for the hearing of the appeal. In this regard, he/she has to issue a legal notice to the appellant and the IT Officer against whose order the appeal has been filed. 

Conclusion

Overall, Section 250 is a significant regulation of the Indian Income Tax Act. It helps taxpayers to challenge the decisions of tax authorities to ensure transparency and fairness during tax assessments. By understanding the provisions and regulations discussed above, you can seek redressal to unjust orders by appealing to the Commissioner.

It is always important for businesses as well as individuals to be aware of their rights in terms of tax payment to maintain a fair tax payment system in India.