Key Highlights
- 1st appeal: Commissioner (Appeals) — Faceless under Section 322 of ITA 2025
- 2nd appeal: Income Tax Appellate Tribunal (ITAT) — Section 333
- 3rd appeal: High Court on substantial question of law — Section 336
- Final: Supreme Court on further substantial question of law — Section 338
- Time limit for CIT(A) appeal: 30 days from receipt of order
- Condonation of delay: available with sufficient cause
Legal Reference
Sections 322-338 (appeal mechanism), ITA 2025 | Faceless Appeal Scheme 2020 | Corresponds to Sections 246A-260A of ITA 1961
1. First Appeal: Commissioner (Appeals)
If you receive an assessment order with additions you disagree with, the first step is filing an appeal to the Commissioner (Appeals) — now called JCIT(A)/CIT(A) under the faceless scheme:
- File Form 35 online on the Income Tax Portal within 30 days of receiving the order
- Pay 20% of disputed demand as pre-deposit (for stay of demand)
- Submit grounds of appeal and statement of facts
- All proceedings are faceless — no in-person hearings
- CIT(A) must dispose of within 1 year
2. Second Appeal: ITAT
If the CIT(A) order is unfavourable, appeal to the Income Tax Appellate Tribunal:
- File Form 36 within 60 days of CIT(A) order
- ITAT consists of a judicial member and an accountant member
- ITAT order is final on facts — no further factual appeal
- Filing fee: Rs 500–Rs 1,000 depending on income
- Stay of demand can be sought from ITAT
3. High Court and Supreme Court
Appeals to High Court and Supreme Court are limited to substantial questions of law — not factual disputes:
- High Court under Section 336: within 120 days of ITAT order
- Supreme Court under Section 338: if High Court certifies the case or in certain situations
- Both courts must admit the case before hearing it on merits
4. Dispute Resolution Committee (DRC)
For small taxpayers, the Dispute Resolution Committee provides an alternative to conventional appeal:
- Applicable for disputed tax up to Rs 10 lakh per year
- Returned income must be below Rs 50 lakh
- DRC can grant complete or partial waiver of disputed tax, interest, and penalty
- No appeals after accepting DRC resolution
5. Vivad se Vishwas: Amnesty Scheme
The Vivad se Vishwas scheme (when active) allows taxpayers to settle pending appeals at reduced or nil penalty/interest by paying a specified percentage of disputed tax. The 2024 version (Vivad se Vishwas 2.0) was available for cases with appeals pending before CIT(A), ITAT, High Court, and Supreme Court as of specified dates. Check if any current scheme is active before filing appeals — sometimes settlement is more economical than litigation.
6. Why TaxClue
A strong appeal requires well-drafted grounds, correct legal citations, and strategic management of the dispute timeline. TaxClue drafts and files CIT(A) and ITAT appeals, and represents clients at hearings. Contact us for income tax dispute resolution and appeal filing under ITA 2025.
Disclaimer
This article is for general informational and educational purposes only. It does not constitute legal, financial, or professional tax advice. Readers are advised to consult a qualified Chartered Accountant or tax professional before making any decisions. TaxClue Consultech Pvt Ltd accepts no liability. All case studies and examples in this article are illustrative only and do not represent actual persons or transactions.
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❓ Frequently Asked Questions
What is the first step to challenge an income tax assessment order?
The first step is filing an appeal to the Commissioner (Appeals) under Section 322 of the Income Tax Act, 2025. File Form 35 online on the Income Tax Portal within 30 days of receiving the assessment order. All CIT(A) proceedings are now faceless. To obtain a stay of the demand during the appeal, pre-deposit 20% of the disputed tax. Submit clear grounds of appeal with legal and factual justification.
What is ITAT and how do I appeal to it?
The Income Tax Appellate Tribunal (ITAT) is the second appellate forum under ITA 2025. If you are dissatisfied with the CIT(A) order, file an appeal in Form 36 within 60 days of the CIT(A) order. ITAT consists of a judicial member and an accountant member and adjudicates both legal and factual issues. ITAT orders are final on facts — further appeals to the High Court are restricted to substantial questions of law only.
What is the Dispute Resolution Committee (DRC)?
The Dispute Resolution Committee provides an alternative dispute resolution path for small taxpayers: those with disputed tax up to Rs 10 lakh per year and returned income below Rs 50 lakh. The DRC can grant complete or partial waiver of disputed tax, interest, and penalties. Once a DRC settlement is accepted, no further appeal is available on those issues. This path is simpler and faster than conventional appeals for eligible taxpayers.
Can I appeal to the High Court against an ITAT order?
Yes, but only on a substantial question of law — not on facts. Under Section 336 of ITA 2025, an appeal to the High Court against an ITAT order must be filed within 120 days and must involve a question of law (legal interpretation, application of a statutory provision, constitutional validity). The High Court must first admit the appeal before hearing it on merits. The Supreme Court under Section 338 is the final appellate court.
What is Vivad se Vishwas?
Vivad se Vishwas is a government amnesty scheme that allows taxpayers with pending income tax disputes (appeals at CIT(A), ITAT, High Court, or Supreme Court) to settle by paying a reduced percentage of disputed tax with immunity from penalties and prosecution. The 2024 version (Vivad se Vishwas 2.0) covered cases pending as of 22 July 2024. The scheme typically runs for a limited period. It is often economical to settle under such schemes rather than continue expensive litigation.
