Identify the first appeal route
This guide covers appeals under the Income-tax Act, 1961. Apply section 246 to qualifying appeals to the Joint Commissioner (Appeals) and section 246A to qualifying appeals to the Commissioner (Appeals). Check the type of order, the rank and approvals of the authority that passed it, any exclusion or transfer, and the portal assignment. Certain orders have a different direct appeal route. The 2021 Faceless Appeal Scheme and the 2023 e-Appeals Scheme are separate instruments; check which applies and use any video hearing procedure available under it.
Form 35 is the prescribed first appeal form under Rule 45 of the Income-tax Rules, 1962. The Department’s transition guidance confirms that an appeal filed after 1 April 2026 for AY 2026–27 or an earlier assessment year remains under the 1961 Act as applicable under section 536. For proceedings governed by the Income-tax Act, 2025, Rule 167 of the Income-tax Rules, 2026 prescribes Form 99 for first appeals under section 358; Rule 192 addresses additional evidence.
Check time, admitted tax and fees separately
Under section 249(2), the ordinary period is 30 days. For assessment or penalty, calculate from service of the related demand notice; for an appeal under section 248, from payment of the tax; otherwise, from service of the intimation of the order. Preserve service evidence and check statutory exclusions, including the relevant period where a section 270AA application is rejected. Do not assume that weekends, bank holidays or a portal failure automatically extend time for electronic filing.
Section 249(4) requires tax due on returned income to have been paid when a return was filed. If no return was filed, the benchmark is the advance tax payable. The express statutory exemption on application and recorded good and sufficient reason applies to the no-return limb. The 20% CBDT stay benchmark is a separate recovery matter. Filing Form 35 does not itself stay collection.
| Section 249(1) category | Appeal fee |
|---|---|
| Assessed total income of ₹1 lakh or less | ₹250 |
| Assessed total income above ₹1 lakh and at most ₹2 lakh | ₹500 |
| Assessed total income above ₹2 lakh | ₹1,000 |
| Subject matter outside those categories | ₹250 |
Separate grounds from the statement of facts
Number concise grounds by issue. Identify each disputed adjustment and relief. For a jurisdictional ground, check the governing version of the provision before citing a deadline under section 153, the requirement for a section 143(2) notice, section 151 approval or the notice and hearing requirements under section 144B. State the actual defect and evidence rather than relying on stock wording. A remedy may involve deletion, annulment, further consideration or other relief depending on the defect, forum and statute.
For substantive grounds, specify the amount, provision and factual error: for example, identify what the officer overlooked under section 37(1) or which evidence establishes identity, creditworthiness and genuineness for a section 68 credit. A reservation to amend grounds does not itself admit a late ground; section 250(5) governs that discretion. Seek consequential interest recomputation where appropriate and distinguish a separate penalty order from an assessment ground.
| Statement of facts | What to include | Supporting record |
|---|---|---|
| Background | Entity, business and relevant period. | Return and audited statements where relevant. |
| Assessment start | Return date, income and the actual scope stated for the proceeding. | Return acknowledgement and notices. |
| Chronology | Service, replies, requested hearings and order. | Portal receipts, correspondence and timestamps. |
| Disputed amounts | Set out facts and amounts for each adjustment. | Ledger-to-order reconciliation and annexure index. |
| Relief | Link each request to the challenged order. | Numbered grounds and computation. |
Use Rule 46A for evidence new to the assessment record
Identify the precise condition: the AO refused evidence that should have been admitted; sufficient cause prevented production of evidence the AO requested; sufficient cause prevented production of evidence relevant to a ground; or the order was passed without a sufficient opportunity to produce relevant evidence. Cite the applicable clause and explain when the evidence existed, why it was not produced and why it matters. A document already submitted can be tied to its original acknowledgement.
Rule 46A(2) requires written reasons for admission. Rule 46A(3) requires a reasonable opportunity for the AO to examine evidence or cross-examine a witness and to produce rebuttal evidence before the authority takes the additional evidence into account. A remand report is a common procedure; the rule itself is about the opportunity. Seek access to adverse comments and a fair chance to respond. Distinguish evidence tendered by the appellant from evidence the appellate authority calls for under its own powers, including section 250(4) and Rule 46A(4).
Apply for condonation where needed
Section 249(3) lets the appellate authority admit a late appeal if satisfied that sufficient cause prevented timely filing. Give a clear timeline and evidence, including steps taken once the impediment ended. An affidavit may help where appropriate or required; section 249(3) does not prescribe a universal stamp-paper affidavit. Katiji cautions against applying the sufficient-cause standard mechanically.
Five worked illustrations
These examples are hypothetical. A stated demand is an assumed notice amount; it is not a full tax computation.
1. Best judgment assessment and a short response window
For AY 2021–22, assume a notice on 14 March 2023 specified 17 March as the reply date and an order under sections 144 and 144B followed on 22 March. ₹1.50 crore of section 68 additions and a ₹1.30 crore section 37(1) disallowance total ₹2.80 crore. A 20% disallowance of ₹1.30 crore implies a ₹6.50 crore expense base. Assume the notice demand is ₹2.45 crore. If ₹32 lakh was returned and ordinary tax was 25% plus 4% cess with no surcharge, the returned-income tax is ₹8.32 lakh. Verify actual payment and the rate independently when filing.
Document the effective response time and any requested hearing. For the deposits, reconcile counter collections and booked turnover with the bank; for the freight disallowance, reconcile invoices and vouchers. Identify which material was previously submitted and make a separate Rule 46A application for additional evidence if the facts support it.
2. Medical incapacity and disputed electronic service
Assume valid demand service on 15 December 2023, with no exclusion. The nominal thirtieth day was Sunday, 14 January 2024. Filing on 19 April was 96 days after that date, or 95 days after 15 January if a next-working-day rule applies on the facts. Do not assume that extension for a portal filing. If first actual knowledge is said to have arisen on 10 April, explain the nine days to filing. A taxpayer disputing service should separate that argument from a protective condonation request. Use the ₹48 lakh capital gains adjustment and the dates of treatment, communications and portal access to identify the assessment and support the chronology. Condonation is discretionary.
3. Later Form 26A evidence and a section 40(a)(ia) disallowance
Assume the current 30% disallowance percentage under the 1961 Act applies for the relevant year and that the entire ₹1.50 crore subcontracting payment to a resident is in scope. The proposed disallowance is ₹45 lakh. Check whether the resident furnished a return under section 139, included the sum in computing income and paid tax due on the declared income, and whether the payer furnished the required accountant’s certificate in Form 26A. The second proviso to section 40(a)(ia) then treats tax as deducted and paid on the payee’s return filing date if its conditions are satisfied. Check the year of any resulting deduction and relevant due dates. If the certificate is new evidence, explain the Rule 46A basis and allow the AO to verify it. Do not assume automatic deletion or equate the disallowance amount with the payee’s underlying receipts.
4. Buyer disputes stamp value
Assume section 56(2)(x) applies with the ₹50,000 or 10% threshold, whichever is higher. The price is ₹2.20 crore and stamp value ₹3.10 crore, a ₹90 lakh difference. The threshold is ₹22 lakh. Document any physical restrictions and request a valuation reference under the valuation proviso to section 56(2)(x), which applies sections 50C(2) and (3) as far as may be. Check conditions and jurisdictional case law. If a valid reference results in a substituted value of ₹2.28 crore, the ₹8 lakh difference is within the ₹22 lakh threshold on the assumptions. A private valuation report alone does not substitute the stamp value.
5. No exempt income in FY 2020–21
Assume no exempt income for AY 2021–22 and an alleged Rule 8D investment base of ₹25 crore, meaning the annual average of the relevant monthly averages. The 1% component is ₹25 lakh. Check the investment population, direct costs, the cap tied to total expenditure claimed, and the statutory satisfaction requirement if the rule is otherwise applicable. For this historical year, Cheminvest and Era Infrastructure support the no-exempt-income argument in the Delhi High Court’s jurisdiction, including its view that the Finance Act, 2022 amendment operates prospectively. Confirm governing precedent and the applicable statutory version for other jurisdictions and years.
File and keep the acknowledgement
- Check the correct appellate forum, deadline, order and demand service, admitted tax and applicable fee. Follow the payment option shown for appeal fees on the portal.
- Prepare numbered grounds, concise facts and indexed exhibits. Include any separate condonation or additional evidence request and record its purpose.
- Follow Rule 45 verification and the portal’s authorised-signatory procedure. Use DSC where Rule 45 requires it; use the permitted electronic verification route in other applicable cases. Preserve the filed version and acknowledgement.
Frequently asked questions
Can I wait until Monday if day 30 is a Sunday?
File earlier if possible. Section 10 of the General Clauses Act concerns an office closed on the last day. Whether it affects your filing depends on the circumstances and applicable procedure; a Sunday or bank holiday alone is not a safe extension assumption.
Can the appellate authority enhance an assessment?
Section 251 permits enhancement within its scope after a reasonable opportunity to show cause. Distinguish considering an issue within the assessment proceedings from introducing a wholly new source not considered by the AO. Check binding precedent and the powers of the assigned authority.
What if the statement of facts exceeds a portal limit?
Include the key facts in the field and use an indexed annexure where the current form and portal allow it. Retain the filed documents and verify that they were accepted.
Who verifies the form during corporate insolvency?
Confirm who is legally authorised under Rule 45 and section 140, read with the insolvency order and the IBC. Arrange the insolvency professional’s portal authorisation and use the applicable verification method.
Is a 20% disputed-demand deposit necessary to file Form 35?
No. The 20% benchmark concerns a separate stay request. Admission of the appeal depends on its own statutory requirements.
How do I distinguish JCIT(A) from CIT(A)?
Apply sections 246 and 246A to the order and assignment. Section 246 covers listed orders and has qualifications concerning the issuing authority or approval and allocation. A small demand alone does not decide the forum.
Sources
- Income-tax Act, 1961: sections 14A, 40(a)(ia), 50C, 56, 144B, 201, 246–251 (read with applicable amendments)
- Income-tax Act, 2025: sections 356–361 and 536
- Income Tax Department: transition for appeals from AY 2026–27 and earlier
- Income Tax Department: Form 35 user manual and workflow
- Income-tax Rules, 1962: Rule 46A text, read with later amendment
- CBDT Notification 32/2023: amendments to Rules 45 and 46A and Form 35
- CBDT Notification 139/2021: Faceless Appeal Scheme, 2021
- CBDT Notification 33/2023: e-Appeals Scheme, 2023
- Income-tax Rules, 2026: Rules 167 and 192
- General Clauses Act, 1897, section 10: computation where the court or office is closed
- Supreme Court, Collector, Land Acquisition v Mst Katiji: sufficient cause
- Supreme Court, CIT v Rai Bahadur Hardutroy Motilal Chamaria: limits on enhancement
- Delhi High Court, Cheminvest Ltd v CIT: section 14A under the prior law
- Delhi High Court, PCIT v Era Infrastructure (India) Ltd: timing of the 2022 amendment
- ITAT decision reproducing Rule 8D as amended in 2016