Advanced Direct Tax Laws and Practice · Appeals

Appeals to High Court and Supreme Court under Income-tax Act, 2025

Updated 11 October 2026 · Fact-checked

Under section 365 of the Income-tax Act, 2025, an appeal lies to the High Court from an order of the Appellate Tribunal only if the case involves a substantial question of law. It must be filed within 120 days. The High Court frames the question and decides only that. Section 368 governs the hearing before the Supreme Court.

Understand Appeals to High Court and Supreme Court

The Income-tax Act, 2025 gives a ladder of appeals. The Appellate Tribunal is the last forum for facts. After it, you can go to the High Court, but only on law. This is the key idea for every answer on this topic.

Section 365(1) says an appeal lies to the High Court from every order passed in appeal by the Appellate Tribunal, if the High Court is satisfied that the case involves a substantial question of law. So the High Court does not re-weigh evidence. It looks at a legal question that is important enough to need its decision.

Either side can appeal. Under section 365(2), the Principal Chief Commissioner, Chief Commissioner, Principal Commissioner, Commissioner or the assessee can file. The appeal must be a memorandum of appeal that precisely states the substantial question of law. It must be filed within 120 days from the date the order is received. Under section 365(3), the High Court may admit a late appeal if there was sufficient cause.

The High Court then works in a set order. Under section 365(4), once satisfied, it formulates the question. Under section 365(5), the appeal is heard only on that question, and the respondent may argue that the case does not involve it. Under section 365(6), the court can, for reasons recorded, hear another substantial question it did not frame. Under section 365(7), it decides the question and gives a judgment with grounds. It may award costs. Under section 365(8), it may determine any issue the Tribunal did not decide or decided wrongly because of that question of law.

After the High Court, the matter can go to the Supreme Court under section 367. Section 368 says the Code of Civil Procedure, 1908 provisions on appeals to the Supreme Court apply as they apply to appeals from High Court decrees. Costs are at the Supreme Court's discretion. If the High Court judgment is varied or reversed, effect is given as under section 365(10). Section 365(10) says the Assessing Officer gives effect on the basis of a certified copy of the judgment.

Sections 375 and 376 deal with identical questions of law pending before the High Court or Supreme Court. Section 375 lets an assessee give a declaration to avoid raising the question again. Section 376 lets a collegium hold back the department's appeal.

Key rules to remember

Appeal to High Court: Order of Appellate Tribunal + substantial question of law → appeal under section 365; The High Court must be satisfied that the case involves a substantial question of law.
Time limit for High Court appeal: 120 days from the date the order appealed against is received; Section 365(2)(a). Applies to the assessee and to the department. Late appeal can be admitted for sufficient cause under section 365(3).
Form of appeal: Memorandum of appeal stating the substantial question of law precisely; Section 365(2)(b).
Who may file: Principal Chief Commissioner, Chief Commissioner, Principal Commissioner, Commissioner or the assessee; Section 365(2). The assessee must be aggrieved by the Tribunal order.
Scope of hearing: Appeal is heard only on the question formulated by the High Court; Section 365(5). Exception under 365(6): another substantial question, for reasons recorded.
Effect of judgment: Assessing Officer gives effect on a certified copy of the judgment; Section 365(10). Same method applies after a Supreme Court order that varies or reverses the High Court under section 368(3).
Supreme Court hearing: Code of Civil Procedure, 1908 applies as in appeals from High Court decrees; costs at the Court's discretion; Section 368(1) and (2).
Identical question: assessee declaration (section 375): Declaration to AO or appellate authority; if claim admitted, case decided without waiting; final decision then applied; Section 375(3) to (6). The assessee cannot raise the question later in the relevant case.
Identical question: department appeal (section 376): Collegium may direct no appeal now; application within 120 days; later appeal within 60 days to Tribunal or 120 days to High Court; Section 376(3) and (6). Collegium means two or more Chief Commissioners, Principal Commissioners or Commissioners, as specified by the Board.

How to solve Appeals to High Court and Supreme Court questions

Use this order for any case-based question on High Court or Supreme Court appeals.

1Identify the order appealed against. For a High Court appeal under section 365, it must be an order of the Appellate Tribunal passed in appeal.
2Identify who is appealing: the assessee or a senior tax officer. Both can file under section 365(2).
3Test the issue. Is it a question of law, and is it substantial? A pure dispute on facts does not qualify.
4Check the time limit. Count 120 days from the date the order was received, not the date it was passed. Then consider sufficient cause under section 365(3) if late.
5State the form: a memorandum of appeal that precisely states the substantial question of law.
6Explain the High Court procedure: satisfaction, formulation of the question, hearing on that question, power to hear another question, judgment, costs.
7State the next step: the Supreme Court under section 367 and section 368, and how effect is given to the final order.
8Conclude with a clear answer on admissibility and what the assessee or department should do.

Quickest way: Four-point check for High Court appeal questions

When to use it: Use when the question asks whether an appeal is maintainable or what to advise.

Order: is it a Tribunal order? If yes, section 365.
Issue: is there a substantial question of law?
Time: within 120 days of receipt? If not, is there sufficient cause?
Form: memorandum stating the question precisely. Then say the Court will frame the question and hear only that.

Common mistakes in Appeals to High Court and Supreme Court

Writing that the High Court hears appeals on facts.
Students mix up the Commissioner (Appeals) and Tribunal stage with the High Court stage.
Fix: Say the High Court hears only a substantial question of law. Facts are final at the Tribunal.
Counting 120 days from the date of the Tribunal order.
Students remember the number but not the starting point.
Fix: Section 365(2)(a) counts from the date the order is received by the assessee or the officer.
Saying only the assessee can appeal to the High Court.
Students think of appeals as the taxpayer's remedy.
Fix: Section 365(2) also lets the Principal Chief Commissioner, Chief Commissioner, Principal Commissioner or Commissioner appeal.
Assuming the High Court can hear any question the appellant raises.
Students ignore the formulation step.
Fix: Under section 365(4) and (5), the Court frames the question and hears only that, subject to section 365(6).
Confusing section 375 with section 376.
Both deal with identical questions of law pending in higher courts.
Fix: Section 375 is the assessee's declaration route. Section 376 is the department's collegium route to hold back its appeal.
Forgetting how effect is given after the judgment.
Students stop the answer at the court's decision.
Fix: Add that the Assessing Officer gives effect on the basis of a certified copy of the judgment under section 365(10).

Worked examples

Example 1

The Appellate Tribunal decided an appeal against Mehta Textiles Ltd. on 10 March. The company received the order on 20 March. The company wants to challenge the Tribunal's view on a legal question about interpretation of a provision. Advise on the High Court appeal, the time limit and the form.

Show the solution

The order is an Appellate Tribunal order passed in appeal, so section 365(1) applies.
The company is aggrieved and can appeal under section 365(2). The issue is the interpretation of a provision, which is a question of law. It must also be substantial for the High Court to be satisfied.
The time limit is 120 days from the date the order is received. Here the starting date is 20 March, not 10 March.
The appeal must be a memorandum of appeal that precisely states the substantial question of law involved.
If it misses the 120 days, the High Court may admit it only if it is satisfied there was sufficient cause under section 365(3).

Answer: The company can file a High Court appeal under section 365 within 120 days from 20 March, with a memorandum precisely stating the substantial question of law. The High Court must be satisfied that the question is substantial.

Example 2

The High Court admits an appeal by the Principal Commissioner against an assessee and frames one question of law. At the hearing, the assessee argues the case does not involve that question, and the department wants another legal question argued. Explain what the Court can do and how the order is given effect.

Show the solution

Under section 365(4), once satisfied that a substantial question is involved, the Court formulates it.
Under section 365(5), the appeal is heard only on that question. The respondent, here the assessee, may argue the case does not involve it. So the assessee's argument is allowed.
Under section 365(6), the Court may hear another substantial question not formulated, but only if satisfied that the case involves it, and for reasons recorded. The department cannot demand it as of right.
Under section 365(7), the Court decides the question and delivers a judgment with grounds. It may award costs.
Under section 365(10), the Assessing Officer gives effect on the basis of a certified copy of the judgment.

Answer: The Court hears the framed question, allows the assessee to argue it is not involved, and may take up another substantial question only for recorded reasons. The Assessing Officer then gives effect using a certified copy of the judgment.

Exam tips

Quote section 365 for the High Court, and say section 367 and section 368 for the Supreme Court. Do not guess other section numbers.
Always use the phrase substantial question of law and show that you tested it on the facts.
State 120 days and the starting point, receipt of the order, in every time limit answer.
For identical question problems, name the section: 375 for the assessee, 376 for the department's collegium.
End each case answer with a conclusion and a practical step, such as drafting the memorandum of appeal.

Practice questions from Appeals

Appeals to High Court and Supreme Court in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Appeals to High Court and Supreme Court: frequently asked questions

What is the time limit to appeal to the High Court under the Income-tax Act, 2025?

It is 120 days from the date on which the Tribunal order is received by the assessee or the senior tax officer. This is in section 365(2)(a). The High Court may admit a late appeal if there was sufficient cause.

What is the difference between an appeal to the ITAT and to the High Court?

The Appellate Tribunal is the last forum that decides facts and law. The High Court hears an appeal only if the case involves a substantial question of law, and it decides only the question it formulates. The High Court appeal must also be in the form of a memorandum stating that question.

Who can file an appeal in the High Court?

The assessee who is aggrieved by the Tribunal order can file. So can the Principal Chief Commissioner, Chief Commissioner, Principal Commissioner or Commissioner. This is in section 365(2).

What happens after a High Court order?

Either side may take the matter to the Supreme Court under section 367, where section 368 applies the Code of Civil Procedure provisions. Effect to the High Court judgment is given by the Assessing Officer on a certified copy. If the Supreme Court varies or reverses the judgment, effect is given in the same manner.