Appeal to the Income Tax Appellate Tribunal

Appeals to the Tribunal sit at Sections 253 and 254 of the Income tax Act, 1961, and at Sections 362 and 363 of the Income tax Act, 2025 from Tax Year 2026-27. The description below follows the 2025 Act. This article is for general information and does not constitute tax advice.

Two months, counted from the end of the month

An appeal must be filed within two months from the end of the month in which the order appealed against is communicated. That is not the same as sixty days from receipt, and the difference can run to several weeks. An order received on 3 September gives you until 30 November; an order received on 28 September gives you the same date. Diarise from the month end, not from the date on the envelope.

The Tribunal may admit a late appeal where it is satisfied there was sufficient cause. Time taken to obtain a copy of the order, where one was not supplied with the notice, is excluded from the computation.

What the appeal costs

Assessed total income	Fee
₹1,00,000 or less	₹500
More than ₹1,00,000 up to ₹2,00,000	₹1,500
More than ₹2,00,000	1% of assessed income, capped at ₹10,000
Subject matter unrelated to assessed income	₹500
Stay application	₹500
Application to rectify a Tribunal order	₹50

The fees are deliberately modest and are never the reason not to appeal. The real cost is representation and the time value of a disputed demand.

The stay rule, and the trap inside it

The Tribunal may stay recovery for up to 180 days, but only if the assessee deposits not less than 20% of the tax, interest, fee, penalty or other sum payable, or furnishes security of an equal amount. Extension is possible where the assessee has complied with that condition and the Tribunal is satisfied the delay is not attributable to them, but the aggregate of the original and extended stay cannot exceed 365 days.

And then the stay stands vacated, even where the delay is not attributable to you. The statute says so expressly. An assessee who has deposited 20%, attended every hearing, sought no adjournment and done nothing to slow the matter down can still find the stay gone at 365 days because the Tribunal’s own list ran long. Recovery then resumes on the full balance.

The practical consequence is that a stay is a fixed-length shelter, not protection until disposal. Anyone relying on one should plan cash flow to the 365-day date rather than to the hearing date, and should press for early listing from the outset rather than treating the stay as breathing room. Where the appeal plainly will not be heard inside the window, the 20% deposit buys time and nothing more, and that should be a conscious decision rather than a discovery.

Cross-objections: the reply most people waste

Where the department appeals, the assessee has thirty days from receipt of notice to file a memorandum of cross-objections — and can do so even if it did not itself appeal against any part of the order. The memorandum is then disposed of as though it were an appeal filed in time, and no fee is payable.

That is a genuinely valuable second chance. An assessee who accepted an adverse finding at first appeal, perhaps because the overall outcome was tolerable, gets to reopen it at no cost once the department puts the order back in play. It is routinely overlooked because the thirty days run from a notice about someone else’s appeal.

What the Tribunal can do, and how long it takes

After hearing both sides, the Tribunal may pass such orders as it thinks fit. Its findings on fact are final; only a substantial question of law travels further. It has long been accepted that a new ground of law may be raised before the Tribunal even where it was not argued below, provided the facts are on record — which makes the Tribunal the last realistic opportunity to correct a legal argument that was missed earlier.

The Tribunal may rectify a mistake apparent from the record within six months from the end of the month in which the order was passed, on its attention being drawn by either side, and cannot enhance an assessment or reduce a refund through rectification without hearing the assessee. The indicative timeline for disposal is four years from the end of the financial year in which the appeal was filed, which sits uneasily beside the 365-day stay ceiling and explains why so many stays expire mid-dispute.

When the department does not appeal

The Board fixes monetary limits below which tax authorities are not to file appeals. Two consequences follow that are easy to misread. Not appealing in one year does not stop the department appealing the same issue for another year, or for another assessee. And an assessee cannot argue that the department accepted the position by not appealing — the statute expressly forecloses that contention. A favourable order left unchallenged because of a monetary limit is not a precedent you can rely on.