Template Description

This template provides a comprehensive structure for drafting grounds of appeal under Section 68 of the Income Tax Act, 1961, concerning unexplained cash credits. It is a 1-page MS Word document designed to guide professionals in preparing appeals with clarity and precision. The template includes distinct provisions addressing different factual scenarios, ensuring compliance with the procedural and legal requirements for filing appeals. Its intended audience includes tax consultants, legal professionals, businesses, and individuals dealing with income tax scrutiny or litigation.

Understanding Grounds of Appeal under Section 68 of Income tax Act, 1961

Common Grounds for Filing an Appeal Under Section 68:

• Erroneous Addition of Unexplained Cash Credit: The appellant (taxpayer) may argue that the Assessing Officer has erred in treating the amount as unexplained cash credit, and the explanation provided was genuine and backed by valid documents.
• Inadequate Opportunity to be Heard: If the taxpayer was not given sufficient opportunity to provide explanations or produce evidence, this can be a valid ground for challenging the addition under Section 68.
• Incorrect Interpretation of Facts or Law: In some cases, the AO might misinterpret or wrongly apply Section 68, and this could be challenged in the appeal.
• Reliance on Incorrect or Incomplete Evidence: The taxpayer may argue that the AO has relied on incorrect or incomplete evidence to make the addition, which resulted in an unjustified increase in taxable income.

Procedure for Filing the Appeal:

• Drafting the Appeal: Clearly state the grounds for appeal against the addition under Section 68, including specific references to the amount of addition, relevant facts, and the taxpayer’s explanation that was not considered.
• Filing the Appeal: Submit the appeal before the relevant appellate authority within the stipulated time frame. Ensure that all supporting documents and evidence are attached.
• Representation: Appoint a legal representative or an authorized agent to represent the taxpayer during the appeal hearing.

Conclusion

Filing an appeal under Section 68 of the Income Tax Act is a critical step in defending against unjust additions to taxable income. This template helps taxpayers and legal professionals prepare a well-structured appeal, addressing the specific grounds that challenge the Assessing Officer’s decision. The document provides clarity and organization, making it easier to present a strong case before the appellate authority.