Income Tax Appeals — CIT(A), ITAT, High Court & Supreme Court Procedure Under the Income-tax Act, 2025

Last Updated: 15 April 2026  |  Applicable From: Tax Year 2026-27 (1 April 2026 onwards)  |  Reference: Income-tax Act, 2025 (30 of 2025), as amended by Finance Act, 2026

If you have received an assessment order, a penalty order or a reassessment notice that you believe is incorrect, excessive or unsupported by evidence, you are not bound to accept it. The Income-tax Act, 2025 — which received presidential assent on 21 August 2025 and commenced on 1 April 2026 — preserves and modernises the multi-tier appellate architecture that taxpayers have relied upon for decades. Chapter XVIII of the 2025 Act consolidates appeals, revisions and alternate dispute resolution into a single coherent scheme that is faceless at the first appellate stage, open and adversarial at the Tribunal stage, and strictly legal at the High Court and Supreme Court levels.

This guide is written for taxpayers, finance controllers, tax consultants and in-house teams who need a practical, step-by-step roadmap — what forms to file, in how many days, what fees to pay, what grounds to frame, what to expect at each level, and how the transitional regime handles appeals that straddle 1 April 2026.

Table of Contents

1. The 2025 Act framework and transition from 1961 Act
2. Orders that are appealable
3. First appeal — CIT(A) and JCIT(A)
4. Stay of demand pending appeal
5. Second appeal — ITAT
6. Cross-objections before ITAT
7. Third appeal — High Court
8. Appeal to the Supreme Court
9. e-Dispute Resolution Committee (e-DRC) for small taxpayers
10. Dispute Resolution Panel (DRP)
11. Revision — 263 and 264 equivalents under the 2025 Act
12. Monetary thresholds for department appeals
13. Step-by-step filing procedure
14. Expert Insight
15. Key Takeaways
16. Frequently Asked Questions

1. The 2025 Act framework and transition from the 1961 Act

The Income-tax Act, 2025 (Act 30 of 2025) replaces the Income-tax Act, 1961 with effect from 1 April 2026. Chapter XVIII — titled “Appeals, Revisions and Alternate Dispute Resolutions” — is the successor to the old Chapter XX of the 1961 Act. The overall four-tier architecture is preserved; what has been consolidated is the procedural language, the forms have been rationalised and the faceless appeal framework (previously operating under notifications) has been statutorily built in.

For continuity, Chapter XXIII of the 2025 Act (Repeal and Savings) preserves pending appeals. An appeal pending before CIT(A), ITAT, the High Court or the Supreme Court as on 31 March 2026 continues to be adjudicated under the procedural provisions of the 1961 Act. Fresh appeals filed on or after 1 April 2026 against orders relating to the tax year 2026-27 and later are filed under the 2025 Act framework. This distinction matters when drafting grounds of appeal — you should cite the correct statute depending on the year under dispute.

2. Orders that are appealable

Under the 2025 Act, an assessee may appeal to CIT(A)/JCIT(A) against, among others:

• Regular assessment orders and best-judgment assessments;
• Reassessment orders (equivalent of old Sec 147/148);
• Search and requisition assessments;
• Orders levying penalty under Chapter XXI;
• Orders refusing registration to a trust/institution;
• Orders determining residential status and rejecting claim of exemption;
• Orders imposing tax on the distributed income or rejecting a claim of lower TDS certificate;
• Orders under the rectification provision equivalent to old Sec 154;
• Orders refusing to register or recognise a Mutual Agreement Procedure (MAP) resolution under the DTAA framework.

Not every order is appealable — for example, a notice is ordinarily not an appealable order, and routine administrative communications do not attract an appeal. Practitioners should check Chapter XVIII’s specific enumeration before drafting grounds.

3. First appeal — CIT(A) and JCIT(A)

The Commissioner of Income-tax (Appeals) is the first independent reviewer of an Assessing Officer’s order. For orders passed by an Assessing Officer below the rank of Deputy Commissioner, the Joint Commissioner (Appeals) — a cadre introduced to speed up small-matter adjudication — is the first appellate authority. Both work through the National Faceless Appeal Centre (NFAC) on the income-tax portal.

Form, time limit and fees

Item	Details
Form	Form 35 (e-filed)
Time limit	30 days from service of order/demand notice
Fee — assessed income up to ₹1,00,000	₹250
Fee — assessed income ₹1,00,001 to ₹2,00,000	₹500
Fee — assessed income above ₹2,00,000	₹1,000
Fee — matters not quantifiable	₹250
Condonation of delay	Possible on sufficient cause; file condonation application with appeal

Powers of the first appellate authority

CIT(A) and JCIT(A) have wide powers under the 2025 Act — they may confirm, reduce, enhance or annul the assessment, or set aside the assessment and direct a fresh order. Power to enhance must be exercised only after issuing a show-cause notice. The appellate authority may also admit additional evidence in accordance with Rule 46A equivalent safeguards — typically where the Assessing Officer refused to admit it, where the assessee was prevented by sufficient cause from producing it, or where it is necessary to decide the appeal. The order disposing of the appeal is required to be a speaking order, dealing with each ground raised.

Faceless first appeal

First appeals are conducted without any physical interface. Hearings, submissions, video conferences and order communication all happen through the portal. Territorial jurisdiction of the appellate authority is irrelevant — appeals are randomly allocated to an NFAC unit anywhere in the country. This is a significant contrast with the ITAT, which remains open-court and in-person.

4. Stay of demand pending appeal

Filing an appeal does not, by itself, stop recovery proceedings. The assessee must separately seek stay of demand:

• Administrative stay before the Assessing Officer: Ordinarily granted on payment of 20% of the disputed demand, per CBDT’s instructions dated 29 February 2016 (aligned with the 2025 Act). The AO may reduce or waive the 20% in hardship cases with reasons recorded.
• CIT(A) / JCIT(A): No statutory stay power, but can direct the AO to keep recovery in abeyance pending expeditious disposal.
• ITAT: Has inherent power to grant stay for up to 180 days in the first instance, extendable to a total of 365 days. Beyond 365 days, stay lapses even if the delay is not the assessee’s fault — the taxpayer must then approach the High Court.
• High Court / Supreme Court: Constitutional courts retain plenary power to grant stay on terms they consider equitable.

5. Second appeal — Income-tax Appellate Tribunal (ITAT)

The ITAT is the final fact-finding authority under the 2025 Act. Once the ITAT records a finding of fact, it cannot be re-opened before the High Court unless it is shown to be perverse or unsupported by any evidence. ITAT benches sit in-person, follow open-court procedure and can be approached through authorised representatives (chartered accountants, advocates, retired officers of the department and company secretaries within their respective scopes).

ITAT appeal — particulars	Details
Form	Form 36 (main appeal); Form 36A (cross-objections)
Time limit	60 days from communication of CIT(A)/JCIT(A) order
Fee — assessed income up to ₹1,00,000	₹500
Fee — ₹1,00,001 to ₹2,00,000	₹1,500
Fee — above ₹2,00,000	1% of assessed income, capped at ₹10,000
Stay application	₹500 per application
Bench composition	Division bench (Judicial + Accountant Member); Single Member for smaller cases

6. Cross-objections before ITAT

A cross-objection is a counter-appeal by the respondent against any part of the CIT(A) order on which the respondent has lost, even though the respondent had not independently appealed. For example, if the department appeals the deletion of a disallowance and the assessee had previously been unsuccessful on a different ground, the assessee can still file cross-objections on the ground on which it had not independently appealed — but only after being served notice of the main appeal. Cross-objections are filed in Form 36A within 30 days of receiving notice of the main appeal. They are treated as appeals for all purposes and attract no separate fee.

7. Third appeal — High Court (substantial question of law)

Under the 2025 Act, an appeal lies to the High Court against an order of the ITAT only if it involves a substantial question of law. The High Court is not a fact-finding court — it accepts the ITAT’s findings of fact unless they are shown to be perverse or based on no evidence. The appeal must be filed within 120 days of receipt of the ITAT order, and the memorandum of appeal must precisely formulate the substantial question(s) of law. If the High Court considers there is none, it dismisses the appeal at the admission stage itself.

Examples of substantial questions of law include — whether the ITAT applied the correct section; whether a particular receipt is capital or revenue; whether the facts found attract a specific charging or deduction section; whether the ITAT’s construction of a tax treaty is correct; and whether the ITAT ignored binding precedent.

8. Appeal to the Supreme Court

An appeal lies to the Supreme Court from an order of the High Court in two ways:

• Certificate of fitness for appeal granted by the High Court itself under its statutory power — this is rare.
• Special Leave Petition (SLP) under Article 136 of the Constitution — the dominant route in practice. Must be filed within 90 days of the High Court order, with an additional 60 days for certified copies in prescribed cases.

The Supreme Court decides only substantial questions of law of general importance. Its decisions bind all lower authorities across India and form the apex precedent for income-tax law.

9. e-Dispute Resolution Committee (e-DRC) for small taxpayers

The e-DRC is a faceless alternative to the CIT(A) appeal route, designed for small taxpayers. Eligibility is restricted to cases where:

• The aggregate sum of variations proposed or made does not exceed ₹10 lakh;
• The returned income does not exceed ₹50 lakh;
• The variation does not arise out of a search, requisition or survey; and
• The assessee does not have a prosecution record under specified laws.

The e-DRC can modify the variation in the draft order, grant immunity from penalty and prosecution, and close the dispute without escalation. Once the e-DRC is opted into, the same issues cannot be parallelly agitated before CIT(A).

10. Dispute Resolution Panel (DRP)

The DRP continues under the 2025 Act for eligible assessees — foreign companies and any assessee in whose case a transfer pricing adjustment has been proposed. Where an Assessing Officer proposes to make any variation which is prejudicial to the eligible assessee, the Assessing Officer issues a draft assessment order. The assessee has 30 days to either (a) accept the draft or (b) file objections before the DRP. The DRP — a panel of three Commissioners — issues binding directions within 9 months from the end of the month in which the draft is forwarded, and the Assessing Officer then passes the final order in conformity. DRP directions are appealable only at the ITAT stage.

11. Revision — equivalents of sections 263 and 264

The 2025 Act retains both revisional routes:

Revision in favour of revenue (old Sec 263 equivalent)

The Principal Commissioner/Commissioner may, on examination of the record, revise an order of the AO that is found to be both erroneous and prejudicial to the interests of the revenue. The power is exercisable suo motu within 2 years from the end of the financial year in which the order sought to be revised was passed. The assessee must be given an opportunity of being heard. Revisional orders are appealable to the ITAT.

Revision in favour of the assessee (old Sec 264 equivalent)

The assessee may apply to the Principal Commissioner/Commissioner within 1 year from the communication of the order for revision of any order that is unfavourable. The Commissioner may grant relief if satisfied the order is incorrect. This route is commonly used when the assessee has failed to file an appeal in time, or where an appeal would be disproportionate to the relief sought. A Sec 264 equivalent order is ordinarily not appealable — the only remedy is a writ petition before the High Court.

12. Monetary thresholds for department appeals

To reduce frivolous departmental litigation, the CBDT prescribes tax-effect thresholds below which the department will not ordinarily file an appeal. These thresholds have been re-aligned under the 2025 Act regime:

Forum	Minimum tax-effect for department appeal
ITAT	₹60 lakh
High Court	₹2 crore
Supreme Court	₹5 crore

These thresholds do not apply to cases involving bogus purchases, tax evasion, organised rackets, international taxation, transfer pricing, constitutional validity of a provision, or where the Board has not accepted an adverse ruling as precedent.

13. Step-by-step filing procedure — CIT(A) first appeal

The same general flow applies at the ITAT level, with two key differences — hearings are in-person at the jurisdictional bench, and the Department typically files a cross-appeal or cross-objection where the CIT(A) order has partly gone against it.

Related reading across the 214–243 series

For a deeper understanding of related topics, see our companion guides:

• Income Tax Penalties & Interest Under the Income-tax Act, 2025 — on the quantum of penalties you may be contesting.
• Income Tax Assessment & Reassessment Under the 2025 Act — understand the order you are appealing against.
• Set-Off and Carry Forward of Losses Under the 2025 Act — computation grounds often arise in appeals.
• TDS & TCS Under Chapter XIX of the 2025 Act — TDS demand disputes are among the most common appeals.
• Faceless Assessment & Appeal Scheme — how NFAC operates.
• Income Tax Return Filing Under the 2025 Act — the return is the starting point of every assessment dispute.

Expert Insight

Key Takeaways

• The Income-tax Act, 2025 received assent on 21 August 2025 and commenced on 1 April 2026 — appeals relating to the tax year 2026-27 are filed under Chapter XVIII of the 2025 Act.
• The four-tier appellate ladder — CIT(A)/JCIT(A) → ITAT → High Court → Supreme Court — is preserved, with e-DRC as an alternative route for small cases.
• First appeal is in Form 35 within 30 days, routed through NFAC faceless proceedings.
• Second appeal is in Form 36 within 60 days before the ITAT; cross-objections are in Form 36A within 30 days.
• High Court appeals lie only on a substantial question of law, within 120 days; Supreme Court appeals are predominantly by SLP under Article 136.
• ITAT can grant stay for up to 365 days in aggregate; CIT(A) has no independent stay power.
• Administrative stay before the AO is typically granted on payment of 20% of disputed demand.
• Revisional remedies (equivalents of old 263 and 264) are preserved under the 2025 Act with the same time limits — 2 years for revenue-favouring revision and 1 year for assessee-favouring revision.
• Pending appeals as on 31 March 2026 continue under 1961 Act procedure by virtue of the transitional provisions in Chapter XXIII.
• Well-drafted grounds, timely filing and a calibrated stay strategy are the three pillars of a winning appeal.

Frequently Asked Questions

Need help drafting a CIT(A) appeal, cross-objection or stay application under the Income-tax Act, 2025? Speak to CA V. Viswanathan at Virtual Auditor — +91 99622 60333 or support@virtualauditor.in.