Section 375: procedure when an assessee claims an identical question of law is pending

Introduction

This route belongs to the assessee whose own case for another tax year already presents the identical question of law to a specified High Court, the Supreme Court or a qualifying special-leave proceeding. The relevant case may still be with the Assessing Officer or an appellate authority.

Admission of the declaration changes the appeal strategy: the assessee gives up separately raising that same question in the relevant case, and the final outcome of the other case is later applied here. The questions must genuinely be identical; an overlapping subject is insufficient.

Key takeaways

When the assessee can make a declaration

This applies where an assessee claims that a question of law arising in their case for a tax year, pending before the Assessing Officer or an appellate authority (the "relevant case"), is identical to a question of law arising in their case for another tax year (the "other case"), and that question in the other case is pending:

• Before the High Court on a reference under section 256, or an appeal under section 260A, of the Income-tax Act, 1961
• Before the Supreme Court on a reference under section 257, or an appeal under section 261, of the Income-tax Act, 1961
• Before the High Court on an appeal under section 365 of this Act
• Before the Supreme Court on an appeal under section 367 of this Act
• In a Special Leave Petition under Article 136 of the Constitution, against an order of the Appellate Tribunal or the jurisdictional High Court

Filing the declaration and what happens next

The assessee may furnish a declaration, in the prescribed form and manner, that if the Assessing Officer or appellate authority agrees to apply the final decision on the question of law in the other case to the relevant case, the assessee will not raise that question of law in the relevant case before any appellate authority or in a subsequent appeal before a higher forum.

Where such a declaration is furnished to an appellate authority, the authority must call for a report from the Assessing Officer on the correctness of the assessee's claim, and give the Assessing Officer an opportunity of being heard if requested.

The Assessing Officer or appellate authority may, by a written order, admit the claim if satisfied the question of law is genuinely identical, or reject it if not satisfied. That order is final and cannot be questioned in any appeal or revision under the Act.

Effect of an admitted claim

Where a claim is admitted, the Assessing Officer or appellate authority may dispose of the relevant case without waiting for the final decision on the question of law in the other case, and the assessee cannot then raise that same question of law in an appeal before any appellate authority or a subsequent appeal before a higher forum.

Once the decision on the question of law in the other case becomes final, it is applied to the relevant case, and the Assessing Officer or appellate authority amends the earlier order, if necessary, to conform with that final decision.

Key definitions

"Appellate authority" means the Joint Commissioner (Appeals), Commissioner (Appeals) or Appellate Tribunal.

"Case", for an assessee, means any proceeding under the Act for assessing total income or imposing a penalty or fine.

"Subsequent appeal before a higher forum" means an appeal to the High Court under section 365, an appeal to the Supreme Court under section 367, or a Special Leave Petition under Article 136 of the Constitution against an order of the Appellate Tribunal or the jurisdictional High Court.

Step-by-step flow for an assessee's declaration under Section 375

1. 1

   Is a question of law in the assessee's case for one tax year (the relevant case) identical to a question of law in his own case for another tax year (the other case)?

   The relevant case must be pending before the Assessing Officer or an appellate authority (Joint Commissioner (Appeals), Commissioner (Appeals) or Appellate Tribunal).

   • No: Section 375 is not available.
   • Yes: Go to the next step.
2. 2

   Is the question in the other case pending in one of the forums listed in Section 375(1)(b)?

   These are: the High Court or Supreme Court on a reference or appeal under sections 256, 257, 260A or 261 of the Income-tax Act, 1961; the High Court on appeal under section 365; the Supreme Court on appeal under section 367; or a Special Leave Petition under article 136 of the Constitution against the order of the Appellate Tribunal or the jurisdictional High Court.

   • No: Section 375 is not available.
   • Yes: The assessee may furnish a declaration in the prescribed form and manner. Go to the next step.
3. 3

   Is the declaration filed with an appellate authority?

   If so, under Section 375(2) it must call for a report from the Assessing Officer on the correctness of the claim, and hear the Assessing Officer if he asks.

4. 4

   Is the authority satisfied that the questions are identical?

   The order under Section 375(3) is final and cannot be challenged by appeal or revision under the Act (Section 375(4)).

   • No: The claim is rejected and the relevant case proceeds in the normal way.
   • Yes: The claim is admitted. Go to the next step.
5. 5

   Dispose of the relevant case and apply the final decision

   Under Section 375(5), the authority may dispose of the relevant case without waiting, and the assessee cannot raise that question in appeal or in a subsequent appeal before a higher forum. Under Section 375(6), when the decision in the other case becomes final, it is applied and the order is amended if necessary.

Practical checklist

Glossary

Relevant case

The assessee’s case for the tax year pending before the Assessing Officer or an appellate authority in which the identical question arises.

Other case

The same assessee’s case for another tax year containing the question pending before a qualifying higher forum.

Frequently asked questions