TaxTMI 
TaxTMI 
Streamlining Appeals and Ensuring Judicial Consistency : Clause 376 of the Income Tax Bill, 2025 Vs. Section 158AB of the Income-tax Act, 1961
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....ce litigation, and provide certainty to taxpayers and the revenue alike. It closely mirrors the existing Section 158AB of the Income-tax Act, 1961, which was introduced by the Finance Act, 2022, and operationalized through Rule 16 of the Income-tax Rules, 1962. The legislative intent behind these provisions is to streamline the appellate process by deferring appeals on issues already pending before the High Courts or the Supreme Court, thereby avoiding multiplicity of proceedings on identical legal questions. This commentary undertakes a detailed clause-by-clause analysis of Clause 376, juxtaposed with Section 158AB and Rule 16, highlighting their objectives, procedural nuances, interpretive challenges, and practical implications for stake....
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....aw arising in an assessee's case for any tax year is identical to a question pending before the High Court or Supreme Court, either in the assessee's own case for another year or in another assessee's case. If so, and if the precedent case (the "other case") is pending and the order is in favor of the assessee, the collegium may direct that no appeal be filed at this stage. Key Features: * Applies to any "tax year" (as opposed to "assessment year" in Section 158AB, reflecting updated terminology). * Encompasses situations involving the same assessee or different assessees, thereby broadening its reach. * Requires the question of law to be "identical" and pending before the jurisdictional High Court (u/s 365) or Supreme Co....
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....) and (3) mirror these procedures, with the application to be made in the prescribed form (operationalized by Rule 16, which mandates Form 8A). The conditionality based on the assessee's acceptance is also present in Section 158AB(3), ensuring that the taxpayer's consent is a prerequisite for deferral. This prevents unilateral action by the revenue and protects taxpayer rights. Rule 16 is a procedural adjunct, prescribing the format and manner of the application, thereby ensuring standardization and transparency. 3. Post-Final Decision Mechanism (Sub-sections 5 and 6) Clause 376(5) stipulates that if the order of the lower appellate authority is not in conformity with the final decision in the "other case," the Principal Commissi....
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....can be contentious. Minor factual distinctions may lead to disputes, and judicial guidance may be required to clarify the threshold for identity. * Assessee's Acceptance: The requirement of the assessee's acceptance introduces an element of subjectivity. If the assessee declines to accept identity, the revenue must proceed with the appeal, potentially undermining the objective of reducing litigation. * Effect of Final Decision: The provision presumes that the final decision in the "other case" will be dispositive for the relevant case. However, differences in factual matrices or subsequent legal developments may necessitate further clarification. * Retroactive Application: The provision is prospective, but questions may arise ....
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....nes, ensuring coherence within the statutory framework. Comparative Analysis: Clause 376 vs. Section 158AB and Rule 16 1. Legislative Evolution and Continuity Clause 376 is largely modeled on Section 158AB, reflecting legislative continuity. The changes are primarily terminological (e.g., "tax year" vs. "assessment year") and in cross-references to the relevant provisions of the new Bill. The substantive mechanism remains unchanged, indicating the legislature's satisfaction with the efficacy of the Section 158AB framework. 2. Structural and Procedural Parity Both provisions: * Empower a collegium to decide on deferral of appeals. * Require taxpayer acceptance for deferral. * Mandate applications to the appellate forum in a pr....