TaxTMI 
TaxTMI 
Mechanisms for Avoidance of Repetitive Appeals under Indian Income Tax Statutes : Clause 375 of Income Tax Bill, 2025 Vs. Section 158A of the Income Tax Act, 1961
X X X X Extracts X X X X
X X X X Extracts X X X X
....ection 158A of the Income Tax Act, 1961, and is closely intertwined with the procedural aspects prescribed u/r 15A of the Income-tax Rules, 1962. The legislative intent behind these provisions is to promote judicial economy, reduce multiplicity of litigation, and ensure consistency in the application of law by allowing the outcome of a pending legal question before a superior court to govern similar issues arising in other assessment years or proceedings of the same assessee. This commentary offers a thorough analysis of Clause 375, examining its objectives, structure, operative mechanics, and practical implications. It also provides a detailed comparison with Section 158A and Rule 15A, highlighting both the continuities and the evolutiona....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Court in specific proceedings (including references, appeals, and special leave petitions). The provision explicitly lists the types of proceedings before the High Court and Supreme Court that qualify, including references under the old Act (sections 256 and 257), appeals u/ss 260A and 261, as well as appeals under new sections 365 and 367 (presumably corresponding to the appellate structure in the 2025 Bill), and SLPs under Article 136 of the Constitution. The assessee must furnish a declaration to the Assessing Officer or the relevant appellate authority, in the prescribed form and manner, undertaking not to raise the question of law in subsequent appeals if the authority agrees to apply the final decision from the other case. Sub-cl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e (6): Application of Final Decision Once the decision on the question of law in the other case becomes final, it must be applied to the relevant case. If necessary, the earlier order disposing of the relevant case is to be amended to conform to the final decision. Sub-clause (7): Definitions This sub-clause defines key terms: * "Appellate authority" includes Joint Commissioner (Appeals), Commissioner (Appeals), and the Appellate Tribunal; * "Case" refers to any proceeding for assessment of total income or imposition of penalty/fine; * "Subsequent appeal before a higher forum" is clarified to include appeals under the new Act's sections 365 and 367, and SLPs under Article 136, thus expanding the scope to cover the current appel....
X X X X Extracts X X X X
X X X X Extracts X X X X
....se 375 closely mirror those of Section 158A, with both provisions sharing the following core features: * Applicability where an identical question of law is pending before the High Court or Supreme Court in another case of the same assessee; * Requirement for a declaration by the assessee, undertaking not to raise the issue in subsequent appeals if the authority agrees to apply the final decision; * Provision for verification by the authority, including calling for a report from the Assessing Officer and giving him an opportunity to be heard; * Admission or rejection of the claim by written order, with finality attached to such order; * Mandate to apply the final decision in the pending case to the relevant case, with power to ame....
X X X X Extracts X X X X
X X X X Extracts X X X X
....is route, and aligning the scope of the provision with contemporary appellate practice. * Clarification of "Case": * Both provisions define "case" to include proceedings for assessment or penalty/fine, but Clause 375's language is more concise and modernized. * Form and Manner: * Both provisions require the declaration to be in the prescribed form and manner, with Rule 15A specifying Form No. 8 and the verification process. Clause 375 leaves the form and manner to be prescribed, implying that new rules may be notified under the 2025 Bill. Rule 15A: Procedural Mechanism Rule 15A operationalizes the declaration process u/s 158A by prescribing: * The use of Form No. 8 for the declaration; * Verification requirements and the a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....avoid redundant litigation, provided they are willing to accept the outcome of the higher court decision in the other case. It reduces litigation costs and uncertainty but requires careful consideration before invocation, as it precludes the assessee from contesting the issue further in respect of the relevant case. For the tax administration, the provision streamlines case management, allowing authorities to focus on cases where the legal position is not in flux. It also protects the revenue's interests by ensuring that only genuinely identical questions are deferred, with the Assessing Officer's report serving as a safeguard. For appellate authorities and courts, the mechanism reduces docket congestion and enhances judicial effi....