Old Appeal Sections vs New Appeal Workflow Under Income-tax Act 2025: Complete Guide for 2026
Reviewed by CA Nikhil Gupta · Last reviewed 26 September 2026
Corrected 26 September 2026: section numbers, forms, limitation periods and the stay-of-demand position were re-checked against Chapter XVIII of the Income-tax Act, 2025. The earlier version wrongly presented a 20% pre-deposit as a condition for filing an appeal.
When you disagree with an assessment or penalty order, an appeal is the remedy. The appeal chapter of the 1961 Act (Sections 246 to 261) becomes Sections 356 to 372 of the Income-tax Act 2025, with the same ladder: Joint Commissioner (Appeals) or Commissioner (Appeals), the Appellate Tribunal, the High Court and the Supreme Court. The new sections apply to orders for Tax Year 2026-27 onwards; appeals against orders for AY 2026-27 and earlier continue under the 1961 Act. This guide maps each stage, gives the limitation periods as the new Act words them, and explains what must be paid before an appeal is admitted and what a stay of demand requires.
Appeal Hierarchy — Old Act vs New Act
| Appeal Stage | Old Section (1961 Act) | New Section (2025 Act) | Forum | Time limit (new Act) |
|---|---|---|---|---|
| First appeal — orders of an Assessing Officer below the rank of Joint Commissioner | 246 | 356 | Joint Commissioner (Appeals) | 30 days (Section 358(3)) |
| First appeal — other appealable orders | 246A | 357 | Commissioner (Appeals) | 30 days (Section 358(3)) |
| Second appeal | 253 | 362 | Income Tax Appellate Tribunal | Two months from the end of the month in which the order is communicated (Section 362(3)) |
| High Court appeal | 260A | 365 | High Court — substantial question of law | 120 days from receipt of the Tribunal's order (Section 365(2)) |
| Supreme Court appeal | 261 | 367 | Supreme Court | As provided in Section 367 and the court's rules |
What Must Be Paid Before an Appeal Is Admitted
An appeal to the first appellate authority is not conditional on depositing 20% of the demand. The conditions in the statute are:
- Tax on the return (Section 358(6)): at the time of filing, the appellant must have paid the tax due on the income returned — or, if no return was filed, the advance tax that was payable. The authority may exempt the appellant from this on a written application giving reasons (Section 358(7)).
- Appeal fee (Section 358(2)): a fee fixed by the total income of the appellant, from ₹250 to ₹1,000.
- Form and verification (Section 358(1)): in the prescribed form (Form 99 for Tax Year 2026-27 orders; Form 35 for earlier years), filed online.
- Time (Section 358(3)): within 30 days of service of the notice of demand (assessment or penalty appeals) or of the order.
The 20% figure belongs to a different question — stay of the demand while the appeal is pending. It comes from a CBDT office memorandum of 31 July 2017 and is discussed below.
Illustration: Stay of Demand After a First Appeal
A scrutiny assessment adds ₹28 lakh as unexplained cash credits and raises a demand of ₹12.6 lakh (tax and interest). The company files an appeal and disputes the whole addition, then asks the Assessing Officer to treat it as not in default. Under the CBDT guideline the Assessing Officer would ordinarily ask for 20% of the disputed demand.
If the Assessing Officer accepts, recovery of the balance ₹10.08 lakh is held back until the appeal is decided, on whatever conditions are imposed. The guideline lets the officer ask for more where the Supreme Court or the jurisdictional High Court has already decided the issue against the taxpayer, or where the taxpayer has a history of litigation on it, and for less where rulings favour the taxpayer.
Lesson: file the stay application with the appeal, attach the grounds and any favourable judgments, and keep proof of what was paid.
Step-by-Step: Filing a First Appeal
- Note the date of service of the order or notice of demand — the 30 days run from it (Section 358(3)).
- List the disputed additions and draft specific grounds of appeal and a statement of facts.
- Pay the tax due on the returned income (Section 358(6)) and the appeal fee; keep the challan.
- File Form 99 online (Form 35 for orders relating to AY 2026-27 and earlier), with the grounds, statement of facts and a copy of the order.
- Keep the acknowledgement and track the appeal on the portal.
- Answer notices in writing within the time given. New evidence is not admitted as of right: Rule 192 (old Rule 46A) sets the conditions for additional evidence.
Later stages use their own forms: Form 115 for an appeal to the Tribunal (earlier Form 36) and Form 116 for a memorandum of cross-objections (earlier Form 36A), under Rule 193.
Condonation of Delay — If You Miss the Deadline
The Joint Commissioner (Appeals) or Commissioner (Appeals) may admit an appeal after the 30 days if satisfied that there was sufficient cause for the delay (Section 358(5)). The Tribunal (Section 362(5)) and the High Court (Section 365(3)) have the same power. It is discretionary and not guaranteed, so file as early as possible and explain the reason for the delay with supporting documents.
Key Section Mapping — Old to New Act
| Purpose | Old Act Section | New Act 2025 Section |
|---|---|---|
| Appeal to Joint Commissioner (Appeals) | 246 | 356 |
| Appeal to Commissioner (Appeals) | 246A | 357 |
| Form of appeal and limitation | 249 | 358 |
| Procedure in appeal | 250 | 359 |
| Powers of the appellate authority | 251 | 360 |
| Appeals to the Appellate Tribunal | 253 | 362 |
| Orders of the Appellate Tribunal | 254 | 363 |
| Appeal to the High Court | 260A | 365 |
| Appeal to the Supreme Court | 261 | 367 |
| When tax is payable; treating the assessee as not in default while an appeal is pending | 220 (220(6)) | 411 (411(12)) |
| Interest at 1% a month on unpaid demand | 220(2) | 411(3) |
Stay of Demand During Appeal
Section 411(12) (old Section 220(6)) says that where an assessee has presented an appeal under Section 356 or 357, the Assessing Officer may, in his discretion and on such conditions as he thinks fit, treat the assessee as not in default for the amount in dispute, even though the time for payment has expired, until the appeal is disposed of. Interest at 1% a month or part of a month runs on a demand that is not paid within the time allowed (Section 411(3)).
- Apply to the Assessing Officer with the appeal, giving reasons and the deposit you are offering.
- The CBDT guideline of 31 July 2017 (F.No. 404/72/93-ITCC, modifying Instruction No. 1914) puts the usual deposit at 20% of the disputed demand.
- The stay is discretionary; check the current guideline text for what to do if it is refused.
Appeal Filing Checklist
- Date of receipt of the order noted — the 30-day period starts on service
- Grounds of appeal drafted — specific and point by point
- Statement of facts prepared, with a chronology and document references
- Tax on the returned income paid and the fee paid — challans saved
- Form 99 (or Form 35 for earlier years) filed online — acknowledgement saved
- Evidence organised, and Rule 192 conditions checked if new evidence is needed
- Stay application filed with the Assessing Officer if recovery is imminent
- Penalty order, if any, appealed separately
Frequently Asked Questions
Source and review trail
Use the current official instrument, portal or regulator publication before acting. This panel separates the category authority from page-specific references.
- Primary category
- Income Tax
- Official starting point
- www.incometax.gov.in
Page source links
The prior page did not embed a page-specific external source. The category authority above is the minimum verification starting point; a specific instrument should be added when available.
Primary sources & related provisions
Statutory provisions referenced in this guide:
- Section 356 (Appealable orders before Joint Commissioner (Appeals)) - Income-tax Act
- Section 357 (Appealable orders before Commissioner (Appeals)) - Income-tax Act
- Section 358 (Form of appeal and limitation) - Income-tax Act
- Section 362 (Appeals to Appellate Tribunal) - Income-tax Act
- Section 411 (When tax payable and when assessee deemed in default) - Income-tax Act
- Form 99 (Appeal to the Joint Commissioner (Appeals) or…) - Income-tax Forms, 2026