Sections 361 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 361 of the Income-tax Act, 2025 constitutes the Appellate Tribunal. Section 363 deals with its orders, rectification, stay and costs. Section 364 deals with Benches and procedure. Section 362, the appeal to the Tribunal, has its own post. This article reads sections 361, 363 and 364 as per the Income-tax Act, 2025 (30 of 2025) as amended by the Finance Act, 2026.
The Central Government constitutes an Appellate Tribunal of Judicial and Accountant Members (section 361). It can pass such orders as it thinks fit after hearing both sides, rectify a mistake apparent from record within six months from the end of the month of the order, and stay proceedings for up to 180 days (extendable to a total of 365 days) on a deposit of not less than 20% of the amount payable or equal security (section 363). A Bench has one Judicial Member and one accountant member; a single member may dispose of a case where total income does not exceed rupees fifty lakh (section 364). Section 363(10) was substituted by the Finance Act, 2026.
Where these sections sit
The three sections are in part A of Chapter XVIII, group 2 "Appeals to Appellate Tribunal". Section 362 (who may appeal, time limit, fee) is covered by our post on appeals to the Tribunal. The Chapter is summarised in the Chapter XVIII guide. For the earlier Act's provisions see our appeal sections mapping note. Later amendments, rules and notifications should be checked.
If an order of the first appellate authority has gone against you, see our page on legal dispute resolution.
Section 361: the Appellate Tribunal
- (1) The Central Government constitutes an Appellate Tribunal consisting of as many Judicial and Accountant Members as it thinks fit, to exercise the powers and discharge the functions conferred on it by the Act.
- (2) Irrespective of anything in the Act, the qualifications, appointment, term of office, salaries and allowances, resignation, removal and other terms of service of the President, Vice-President and other Members appointed (a) after the commencement of the Tribunals Reforms Act, 2021 (33 of 2021) are governed by Chapter II of that Act; and (b) before the commencement of Part XIV of Chapter VI of the Finance Act, 2017 (7 of 2017) are governed by the Income-tax Act, 1961 (43 of 1961) and the rules made under it, as if section 184 of the Finance Act, 2017 had not come into force. The other laws are quoted as printed; check them where it matters.
- (3) The Central Government appoints as President (a) a sitting or retired Judge of a High Court who has completed not less than seven years of service as a Judge in a High Court, or (b) one of the Vice-Presidents.
- (4) It may appoint one or more members as Vice-President or Vice-Presidents.
- (5) The Vice-President exercises such powers and functions of the President as the President delegates by a general or special order in writing.
A printing slip in the copy consulted: sub-section (1) is printed as "( 1)" with a space. It does not change the meaning.
Section 363: orders of the Appellate Tribunal
| Sub-section | Rule |
|---|---|
| (1) | After giving both parties an opportunity of being heard, the Tribunal may pass such orders as it thinks fit |
| (2) | It may amend its order to rectify a mistake apparent from record, within six months from the end of the month in which the order was passed, if the mistake is brought to its notice by the assessee or the Assessing Officer |
| (3) | An amendment that enhances an assessment, reduces a refund or otherwise increases the liability of the assessee needs a reasonable opportunity of being heard |
| (4) | An application by the assessee under sub-section (2) carries a fee of Rs. 50 |
| (5) | Where it is possible, the Tribunal may hear and decide an appeal within four years from the end of the financial year in which the appeal is filed under section 362(1) or (2) |
| (6) to (8) | Stay (see below) |
| (9) | The cost of any appeal is at the discretion of the Tribunal |
| (10) | Copy of the order (see below) |
| (11) | Save as provided in section 365, orders of the Tribunal on appeal are final |
Stay: sub-sections (6) to (8)
After considering the merits of the assessee's application, the Tribunal may stay proceedings relating to an appeal filed under section 362(1) for a period not exceeding 180 days from the date of the order, if the assessee:
- (a) deposits not less than 20% of the amount of tax, interest, fee, penalty or other sum payable under the Act; or
- (b) furnishes security of equal amount as referred to in clause (a).
The Tribunal shall dispose of the appeal within that period. No extension is granted where the appeal is not disposed of within the period, unless (a) the assessee applies and has complied with the condition in sub-section (6), and (b) the Tribunal is satisfied that the delay is not attributable to the assessee. The aggregate of the original and extended stay periods shall not exceed 365 days. The order of stay stands vacated if the appeal is not disposed of within the period allowed, even if the delay is not attributable to the assessee (sub-section (8)). A separate fee of Rs. 500 applies to an application for stay of demand under section 362(8).
Copy of the order: sub-section (10)
Sub-section (10) was substituted by the Finance Act, 2026 with effect from 1 April 2026 (footnote 70 of the copy consulted). It now says that the Tribunal shall (a) send a copy of any order passed under the section to the assessee; and (b) send a copy to the jurisdictional Principal Commissioner or Commissioner, electronically on the designated portal designed by the Director General or Principal Director General, and the provisions relating to time limits under the Act for any appeal, reference, revision or otherwise shall apply accordingly. The sub-section is printed within square brackets in the copy consulted.
Section 364: procedure of the Appellate Tribunal
- (1) Powers and functions are exercised by Benches constituted by the President from among the members.
- (2) Subject to sub-section (3), a Bench consists of one Judicial Member and one accountant member.
- (3) The President, or any other member authorised by the Central Government, may sit singly and dispose of any case allotted to the Bench pertaining to an assessee whose total income as computed by the Assessing Officer does not exceed rupees fifty lakh.
- (4) The President may constitute a Special Bench of three or more members for a particular case, with at least one judicial member and one accountant member.
- (5) Where the members of a Bench differ, the point is decided by the majority, if any. If equally divided, they state the point, and the President refers it for hearing by one or more other members; it is decided by the majority of the members who have heard the case, including those who first heard it.
- (6) Subject to the Act, the Tribunal may regulate its own procedure and the procedure of Benches, including places of sitting.
- (7) The Tribunal has all the powers of the income-tax authorities referred to in section 246, and its proceedings are deemed to be judicial proceedings within the meaning of sections 229 and 267 and for the purposes of section 233 of the Bharatiya Nyaya Sanhita, 2023 (45 of 2023); it is deemed to be a Civil Court for all the purposes of section 215 and Chapter XXXVII of the Bharatiya Nagarik Suraksha Sanhita, 2023 (46 of 2023). Check those laws where it matters to you. For section 246 see our post on summons powers.
Worked example
Tarun Industries (an invented name) appeals to the Appellate Tribunal against an order of the Commissioner (Appeals). The tax, interest and penalty payable under the Act in the case amount to Rs. 10,00,000. The Tribunal, after considering the merits, stays the proceedings on the condition that the assessee deposits at least 20% of that amount: 20% of Rs. 10,00,000 = Rs. 2,00,000. The stay is for a period not exceeding 180 days. If the appeal is not disposed of within the period, the stay can be extended only if the company applies, has complied with the deposit condition and the delay is not attributable to it; the total of the original stay and the extension cannot exceed 365 days. If the 365 days run out, or the period allowed lapses with the appeal undisposed, the stay is vacated.
Tarun Industries' total income as computed by the Assessing Officer was Rs. 40,00,000, which does not exceed rupees fifty lakh; the President may allow a single member to dispose of the case under section 364(3). If, after the order, the company finds a mistake apparent from the record, it may bring it to the Tribunal's notice within six months from the end of the month in which the order was passed, with a fee of Rs. 50.
Need help with a Tribunal appeal or stay?
If you are preparing an appeal, a stay application or a rectification request before the Appellate Tribunal, our team can help you plan the steps. Please contact us through the page for legal dispute resolution.
Key takeaways
- The Central Government constitutes the Tribunal; the President is a High Court Judge with at least seven years as a High Court Judge, or a Vice-President.
- Rectification of a mistake apparent from the record: within six months from the end of the month of the order; fee Rs. 50.
- Stay: up to 180 days, on deposit of not less than 20% or equal security; total not above 365 days.
- A single member may decide cases where total income does not exceed rupees fifty lakh.
- Section 363(10) on copies of orders was substituted by the Finance Act, 2026.
Read next
- Section 362: appeals to the Appellate Tribunal
- Sections 365 to 368: appeals to the High Court and the Supreme Court
- Sections 359 and 360: procedure and powers of the Commissioner (Appeals)
- Appeal sections mapping note
Disclaimer: Based on the Income-tax Act, 2025 (30 of 2025) as amended by the Finance Act, 2026, as consulted on 2 October 2026. It explains the words of the Act only; the Income-tax Rules, 2026, notifications, circulars, later amendments and the way the tax authorities and courts apply these provisions should be checked. This article is general information, not legal advice; check the official text before acting.