Section 246A — Appealable Orders before Commissioner (Appeals)

CHAPTER XX — APPEALS AND REVISION | A.—Appeals to the Joint Commissioner (Appeals) and Commissioner (Appeals)

Section 246A — Appealable Orders before Commissioner (Appeals)

Case Laws & Commentary — Income-tax Act, 1961 (as amended by the Finance Act, 2026) — bharattax.co Treatise

Status: Live. The principal first-appeal section (inserted by the Finance (No. 2) Act, 1998 w.e.f. 1-10-1998), as updated for block assessment (clause (ka), Finance Act, 2024) and other consequential changes.

Finance Act, 2026: No amendment. The Finance Act, 2026 does not touch section 246A.

Nature / mechanism: Exhaustive list of orders against which an assessee, deductor or collector may appeal to the Commissioner (Appeals); orders passed in pursuance of DRP directions and section 144BA(12) references are excluded (those go directly to the Tribunal / are separately channelled).

Litigation profile: Heavily litigated on maintainability — what is an 'appealable order', who is 'aggrieved', and the scope of 'denial of liability to be assessed'.

A. COMMENTARY

The gateway to the first appeal

Section 246A is the operative first-appeal provision for the overwhelming majority of assessees. Its long list spans 143(1)/(1B) intimations (where adjustments or the demand are objected to), 143(3) and 144 assessments, 147 reassessments, 153A search assessments, 154/155 amendments that enhance assessment or reduce a refund or refuse a claim, 163 agency orders, 170/171 succession and partition orders, 201 and 206C(6A) TDS/TCS default orders, 237 refund orders, and a wide spread of penalty orders. The structure is exhaustive: a grievance must be fitted into a clause.

'Denies his liability to be assessed' and the aggrieved person

Clause (1)(a) preserves an appeal where the assessee 'denies his liability to be assessed under this Act' — a phrase read widely to embrace a denial of taxability or of the very chargeability, not merely quantum. Only a person 'aggrieved' may appeal; an assessee who has himself offered an amount may yet be aggrieved if the law does not tax it (subject to the revisional safeguards).

Exclusions: DRP and GAAR-reference orders

Orders passed in pursuance of DRP directions under section 144C, and orders referred under section 144BA(12) (GAAR), are expressly excluded from the clauses dealing with 143(3), 147 and 153A — the eligible assessee's route there is a direct appeal to the Tribunal under section 253. Mis-channelling an appeal is a recurring cause of dismissal.

Once filed, an appeal cannot be unilaterally withdrawn

Because the first appeal vests jurisdiction to assess the correctness of the order as a whole (including the power of enhancement), the assessee cannot withdraw it as of right once instituted.

B. STATUTORY TEXT (verbatim)

Reproduced verbatim from the Income-tax Act, 1961 (as amended up to the Finance Act, 2025); the Finance Act, 2026 makes no change to this section. Inline numerals in square brackets are the bare Act's amendment-footnote markers.

Appealable orders before Commissioner (Appeals).

246A. (1) Any assessee or any deductor or any collector aggrieved by any of the following orders (whether made before or after the appointed day) may appeal to the Commissioner (Appeals) against—

(a) an order passed by a Joint Commissioner under clause (ii) of sub-section (3) of section 115VP or an order against the assessee where the assessee denies his liability to be assessed under this Act or an intimation under sub-section (1) or sub-section (1B) of section 143 or sub-section (1) of section 200A or sub-section (1) of section 206CB, where the assessee or the deductor or the collector objects to the making of adjustments, or any order of assessment under sub-section (3) of section 143 except an order passed in pursuance of directions of the Dispute Resolution Panel or an order referred to in sub-section (12) of section 144BA or section 144, to the income assessed, or to the amount of tax determined, or to the amount of loss computed, or to the status under which he is assessed;

(aa) an order of assessment under sub-section (3) of section 115WE or section 115WF, where the assessee, being an employer objects to the value of fringe benefits assessed;

(ab) an order of assessment or reassessment under section 115WG;

(b) an order of assessment, reassessment or recomputation under section 147 except an order passed in pursuance of directions of the Dispute Resolution Panel or an order referred to in sub-section (12) of section 144BA or section 150;

(ba) an order of assessment or reassessment under section 153A except an order passed in pursuance of directions of the Dispute Resolution Panel or an order referred to in sub-section (12) of section 144BA;

(bb) an order made under sub-section (3) of section 92CD;

(c) an order made under section 154 or section 155 having the effect of enhancing the assessment or reducing a refund or an order refusing to allow the claim made by the assessee under either of the said sections except an order referred to in sub-section (12) of section 144BA;

(d) an order made under section 163 treating the assessee as the agent of a non-resident;

(e) an order made under sub-section (2) or sub-section (3) of section 170;

(f) an order made under section 171;

(g) an order made under clause (b) of sub-section (1) or under sub-section (2) or sub-section (3) or sub-section (5) of section 185 in respect of an assessment for the assessment year commencing on or before the 1st day of April, 1992;

(h) an order cancelling the registration of a firm under sub-section (1) or under sub-section (2) of section 186 in respect of any assessment for the assessment year commencing on or before the 1st day of April, 1992 or any earlier assessment year;

(ha) an order made under section 201;

(hb) an order made under sub-section (6A) of section 206C;

(i) an order made under section 237;

(ia) an order made under section 239A;

(j) an order imposing a penalty under—

(A) section 221; or

(B) section 271, section 271A, section 271AAA, section 271AAB, section 271F, section 271FB, section 272AA or section 272BB;

(C) section 272, section 272B or section 273, as they stood immediately before the 1st day of April, 1989, in respect of an assessment for the assessment year commencing on the 1st day of April, 1988, or any earlier assessment years;

(ja) an order of imposing or enhancing penalty under 62[sub-section (2)] of section 275;

(k) an order of assessment made by an Assessing Officer under clause (c) of section 158BC, in respect of search initiated under section 132 or books of account, other documents or any assets requisitioned under section 132A on or after the 1st day of January, 1997; 63[(ka) an order of assessment made by an Assessing Officer under clause (c) of sub-section (1) of section 158BC, in respect of search initiated under section 132, or books of account, other documents or any assets requisitioned under section 132A, on or after the 1st day of September, 2024;]

(l) an order imposing a penalty under sub-section (2) of section 158BFA;

(m) an order imposing a penalty under section 271B or section 271BB;

(n) an order 64[***] imposing a penalty under section 271C, section 271CA, section 271D or section 271E;

(o) an order made by a Deputy Commissioner or a Deputy Director imposing a penalty under section 272A;

(p) an order made by a Deputy Commissioner imposing a penalty under section 272AA;

(q) an order imposing a penalty under Chapter XXI;

(r) an order made by an Assessing Officer other than a Deputy Commissioner under the provisions of this Act in the case of such person or class of persons, as the Board may, having regard to the nature of the cases, the complexities involved and other relevant considerations, direct.

Explanation.—For the purposes of this sub-section, where on or after the 1st day of October, 1998, the post of Deputy Commissioner has been redesignated as Joint Commissioner and the post of Deputy Director has been redesignated as Joint Director, the references in this sub-section for "Deputy Commissioner" and "Deputy Director" shall be substituted by "Joint Commissioner" and "Joint Director" respectively.

(1A) Every appeal filed by an assessee in default against an order under section 201 on or after the 1st day of October, 1998 but before the 1st day of June, 2000 shall be deemed to have been filed under this section.

(1B) Every appeal filed by an assessee in default against an order under sub-section (6A) of section 206C on or after the 1st day of April, 2007 but before the 1st day of June, 2007 shall be deemed to have been filed under this section.

(2) Notwithstanding anything contained in sub-section (1) of section 246, every appeal under this Act which is pending immediately before the appointed day, before the Deputy Commissioner (Appeals) and any matter arising out of or connected with such appeals and which is so pending shall stand transferred on that date to the Commissioner (Appeals) and the Commissioner (Appeals) may proceed with such appeal or matter from the stage at which it was on that day :

Provided that the appellant may demand that before proceeding further with the appeal or matter, the previous proceeding or any part thereof be reopened or that he be re-heard.

Explanation.—For the purposes of this section, "appointed day" means the day appointed by the Central Government by notification in the Official Gazette.

C. AUTHORITIES

The cases below address the existence and limits of the first appeal, the meaning of 'aggrieved', non-withdrawal, and the channels excluded from section 246A.

Cluster 1 — Existence and substantive character of the appeal

Garikapati Veeraya v. N. Subbiah Choudhry, AIR 1957 SC 540 (CB)

Holding Right of appeal is a substantive vested right accruing at the inception of the lis.

Relevance The section 246A appeal is a vested right, construed in favour of its availability where genuinely in issue.

CIT v. Kanpur Coal Syndicate, (1964) 53 ITR 225 (SC)

Holding The first appellate authority's jurisdiction is co-terminous with the Assessing Officer's; an order exercising a statutory option is appealable.

Relevance Confirms both maintainability of the appeal and the plenary nature of the power it invokes.

Cluster 2 — 'Denies liability to be assessed' / aggrieved person

CIT v. Kanpur Coal Syndicate, (1964) 53 ITR 225 (SC)

Holding Denial of liability to be assessed in a particular status, and the option of assessment, are appealable grievances.

Relevance Illustrates the breadth of 'denial of liability to be assessed under this Act'.

Goetze (India) Ltd. v. CIT, (2006) 284 ITR 323 (SC)

Holding The Assessing Officer cannot entertain a fresh claim except by a revised return; but the Court expressly clarified that this bar does not curtail the powers of the appellate authorities.

Relevance An assessee aggrieved by an over-assessment from a claim not made before the AO may pursue it in the section 246A appeal — the appellate forum is not shut out by Goetze.

Cluster 3 — Non-withdrawal; finality of invoking the appeal

CIT v. Rai Bahadur Hardutroy Motilal Chamaria, (1967) 66 ITR 443 (SC)

Holding Having invoked the first appeal, the assessee cannot, as of right, withdraw it; the appellate authority's jurisdiction over the assessment is engaged. (The same decision confines enhancement to sources processed by the AO — see section 251.)

Relevance Explains why a section 246A appeal, once filed, cannot be abandoned to escape an anticipated enhancement.

Cluster 4 — Channels excluded from section 246A (DRP / GAAR)

Where the order is passed in pursuance of DRP directions or a section 144BA(12) reference, the appeal does not lie to the Commissioner (Appeals); the eligible assessee appeals to the Tribunal under section 253. The DRP jurisprudence (see section 144C) governs the contours of that route.

Principle (statutory)

Position Clauses (a), (b) and (ba) of section 246A(1) carve out DRP-direction orders and 144BA(12)-reference orders; mis-filing before the CIT(A) is liable to dismissal for want of jurisdiction, the correct forum being the Tribunal under section 253(1).

Caution Stated from the bare provision; verify the precise clause and the order's character before filing.