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CS Professional · Advanced Direct Tax Laws and Practice · Appeals

Under the Income-tax Act, 2025 (applicable from the June 2027 session), which of the following correctly describes the power of the Commissioner (Appeals) or Joint Commissioner (Appeals) while disposing of an appeal against an order of assessment?

The appellate authority may confirm, reduce, enhance or annul the assessment. Enhancement is expressly permitted under section 360(1)(a) of the Income-tax Act, 2025, though only after the appellant has been given a reasonable opportunity of showing cause against it.

  1. AHe may confirm, reduce, enhance or annul the assessmentCorrect
  2. BHe may only confirm or reduce the assessment, but never enhance it
  3. CHe may only annul the assessment and direct the Assessing Officer to start afresh
  4. DHe may only reduce the assessment, and enhancement is reserved for the Tribunal

Explanation

Section 360(1)(a) provides that in an appeal against an assessment order the appellate authority may confirm, reduce, enhance or annul the assessment. Enhancement is allowed, subject to giving the appellant a reasonable opportunity of showing cause. The options that exclude enhancement or limit the powers to annulment misstate the section.

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