Income-tax Appeals Under the 2025 Act vs 1961 Act: Sections 356–368 & Transition Explained

From 1 April 2026, the Income-tax Act, 2025 reorganises the appellate provisions into sections 356–368, but the Department has clarified that the appellate hierarchy, powers of appellate authorities and appeal limitation periods remain materially unchanged. The practical change is therefore not a new appeal ladder; it is the section mapping and the transition rule that determines whether a dispute continues under the Income-tax Act, 1961 or moves under the 2025 Act.

Old law — Income-tax Act, 1961

Under the Income-tax Act, 1961, first appeals were principally governed by sections 246A and 250–251, appeals to the Income Tax Appellate Tribunal by sections 252–255, and further appeals to the High Court and Supreme Court by sections 260A–261. These provisions were built up over decades and were spread across multiple sections and procedural rules.

New law — Income-tax Act, 2025

The Income-tax Act, 2025 consolidates the remedial framework into a cleaner chapter. The Income Tax Department states that first appeals before the Joint Commissioner (Appeals) and Commissioner (Appeals) are covered by sections 356–360, appeals to the Appellate Tribunal by sections 361–364, and appeals to the High Court and Supreme Court by sections 365–368. Revisionary powers and other dispute-resolution mechanisms are also regrouped in the same chapter.

What actually changed?

The major practical change is structural and transitional. Professionals must use the new section references for disputes arising under Tax Year 2026-27 onward, while disputes linked to earlier years can continue to be governed by the repealed 1961 Act. This creates a period in which both statutory frameworks must be handled correctly depending on the year to which the dispute relates.

What did NOT change?

The Department has expressly clarified that there is no structural change in the appellate hierarchy. The sequence remains Assessing Officer → JCIT(A)/CIT(A) → ITAT → High Court → Supreme Court. The powers of appellate authorities, including powers to confirm, reduce, enhance or annul an assessment, admit additional grounds, call for remand reports, rectify mistakes and grant stay subject to conditions, remain materially unchanged. The limitation period for filing appeals also remains unchanged.

The transition rule is the key compliance point

Section 536 of the Income-tax Act, 2025 preserves continuity. A proceeding that was already pending when the new Act commenced continues as though the new Act had not been enacted. Further, proceedings initiated on or after 1 April 2026 in respect of a tax year beginning before 1 April 2026 continue under the repealed 1961 Act.

This means an appeal filed after 1 April 2026 can still be governed by the Income-tax Act, 1961 if it relates to Assessment Year 2026-27 or an earlier year. Conversely, disputes relating to Tax Year 2026-27 onward will be governed by the 2025 Act and its new section numbering.

Worked example

Assume a company receives an assessment order in August 2026 for Assessment Year 2024-25 and wants to file an appeal before the Commissioner (Appeals). Even though the appeal is being filed after the Income-tax Act, 2025 has commenced, the dispute relates to a year governed by the old Act. The appeal therefore continues under the Income-tax Act, 1961 and the old statutory references remain relevant. A separate dispute arising from Tax Year 2026-27 would instead use the corresponding appeal provisions in sections 356–368 of the 2025 Act.

Why this matters for businesses and tax teams

During the transition, using the wrong statutory framework can create avoidable confusion in appeal memos, internal legal opinions, ERP or litigation trackers, written submissions and professional correspondence. Tax teams should identify the governing year first, then apply the correct Act and section references. The commencement of the 2025 Act does not automatically migrate every pending dispute to the new law.

Practical transition checklist

1. Identify the assessment year or tax year involved in the dispute. 2. Check whether the proceeding was pending on 1 April 2026. 3. For pre-1 April 2026 years, continue to apply the Income-tax Act, 1961 where section 536 preserves it. 4. Use sections 356–368 for appeals arising under the 2025 Act. 5. Do not assume that a new section number means a new appellate power or a new limitation period. 6. Keep old and new section maps available in litigation templates during the transition period.

Primary-source position

The Income Tax Department’s “Appeals and Revisions” guidance confirms that the appellate hierarchy, powers and limitation periods remain materially unchanged under the Income-tax Act, 2025. The Department’s “Objective and Scope of the New Act” guidance also confirms that earlier-year proceedings and appeals continue under the old Act through the transitional provisions in section 536.

Conclusion

For appeals, the Income-tax Act, 2025 is best understood as a structural rewrite with an important transition framework rather than a redesign of taxpayer remedies. The appeal ladder remains familiar; the real professional task is determining which Act governs the dispute and using the correct statutory references.

Disclaimer: This article is for general informational purposes and does not constitute legal or tax advice. Applicability should be evaluated with reference to the relevant year, facts, statutory provisions, rules and current departmental guidance.