Section 250 — Procedure in Appeal

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

Section 250 — Procedure in Appeal

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

Status: Live. Governs the hearing, the parties' right of audience, the power to make further inquiry, admission of additional evidence (with Rule 46A), and the requirement of a reasoned order; sub-sections (6A)-(6C) provide for faceless appeal disposal.

Finance Act, 2026: No amendment. The Finance Act, 2026 does not touch section 250.

Nature / mechanism: Hearing procedure before the first appellate authority: notice and opportunity, power to adjourn and to make further inquiry (or cause the AO to do so), determination in writing stating the points and reasons, and the faceless-appeal framework.

Litigation profile: Litigated on natural justice, additional evidence under Rule 46A, the power to remand/make further inquiry, and the post-2001 removal of the power to set aside.

A. COMMENTARY

Opportunity of hearing and reasoned orders

Sub-sections (1)-(2) require notice of the date and place of hearing to the appellant and the Assessing Officer, both of whom have a right to be heard. Sub-section (6) obliges a written order stating the points for determination, the decision and the reasons — a speaking order is mandatory; failure vitiates the order.

Further inquiry and additional evidence (Rule 46A)

Sub-section (4) lets the appellate authority make such further inquiry as it thinks fit, or direct the AO to do so and report. The reception of additional evidence is regulated by Rule 46A of the Income-tax Rules: it is admissible only in the situations the Rule specifies (e.g., the AO refused to admit evidence, or the appellant was prevented by sufficient cause), and the AO must be given an opportunity to examine it. The appellate authority's own power of inquiry under section 250(4) is, however, independent of Rule 46A.

No power to set aside / remand after 1-6-2001

The power of the first appellate authority to set aside the assessment and remand it to the AO was withdrawn (Finance Act, 2001 w.e.f. 1-6-2001). The authority must now decide the appeal itself — confirm, reduce, enhance or annul (section 251) — and cannot abdicate by a blanket remand, though it may direct a limited inquiry under section 250(4).

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.

Procedure in appeal.

250. (1) The 66[Joint Commissioner (Appeals) or the] Commissioner (Appeals) shall fix a day and place for the hearing of the appeal, and shall give notice of the same to the appellant and to the Assessing Officer against whose order the appeal is preferred.

(2) The following shall have the right to be heard at the hearing of the appeal—

(a) the appellant, either in person or by an authorised representative;

(b) the Assessing Officer, either in person or by a representative.

(3) The 67[Joint Commissioner (Appeals) or the] Commissioner (Appeals) shall have the power to adjourn the hearing of the appeal from time to time.

(4) The 67[Joint Commissioner (Appeals) or the] Commissioner (Appeals) may, before disposing of any appeal, make such further inquiry as he thinks fit, or may direct the Assessing Officer to make further inquiry and report the result of the same to the 67[Joint Commissioner (Appeals) or the] Commissioner (Appeals).

(5) The 67[Joint Commissioner (Appeals) or the] Commissioner (Appeals) may, at the hearing of an appeal, allow the appellant to go into any ground of appeal not specified in the grounds of appeal, if the 67[Joint Commissioner (Appeals) or the] Commissioner (Appeals) is satisfied that the omission of that ground from the form of appeal was not wilful or unreasonable.

(6) The order of the 67[Joint Commissioner (Appeals) or the] Commissioner (Appeals) disposing of the appeal shall be in writing and shall state the points for determination, the decision thereon and the reason for the decision. 68[(6A) In every appeal, the Joint Commissioner (Appeals) or the Commissioner (Appeals), as the case may be, where it is possible, may hear and decide such appeal within a period of one year from the end of the financial year in which such appeal is filed before him under sub-section (1) or transferred to him under sub-section (2) or sub-section (3) of section 246 or filed before him under sub-section (1) of section 246A, as the case may be.]

(6B) The Central Government may make a scheme, by notification in the Official Gazette, for the purposes of disposal of appeal by Commissioner (Appeals), so as to impart greater efficiency, transparency and accountability by—

(a) eliminating the interface between the Commissioner (Appeals) and the appellant in the course of appellate proceedings to the extent technologically feasible;

(b) optimising utilisation of the resources through economies of scale and functional specialisation;

(c) introducing an appellate system with dynamic jurisdiction in which appeal shall be disposed of by one or more Commissioner (Appeals).

(6C) The Central Government may, for the purposes of giving effect to the scheme made under sub-section

(6B), by notification in the Official Gazette, direct that any of the provisions of this Act relating to jurisdiction and procedure for disposal of appeals by Commissioner (Appeals) shall not apply or shall apply with such exceptions, modifications and adaptations as may be specified in the notification:

Provided that no direction shall be issued after the 31st day of March, 2022: 69[Provided further that the Central Government may amend any direction, issued under this sub-section on or before the 31st day of March, 2022, by notification in the Official Gazette.]

(6D) Every notification issued under sub-section (6B) and sub-section (6C) shall, as soon as may be after the notification is issued, be laid before each House of Parliament.

(7) On the disposal of the appeal, the 70[Joint Commissioner (Appeals) or the] Commissioner (Appeals) shall communicate the order passed by him to the assessee and to the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner. 69.. Ins. by Act No. 08 of 2023, w.r.e.f. 1-4-2022. 70.. Ins. by Act No. 08 of 2023, w.e.f. 1-4-2023.

C. AUTHORITIES

The cases below establish the indispensability of natural justice and reasoned orders, the discipline around additional evidence, and the breadth of the inquiry power.

Cluster 1 — Natural justice and reasoned orders

Tin Box Co. v. CIT, (2001) 249 ITR 216 (SC)

Holding An order made without affording the assessee a reasonable opportunity of being heard cannot stand and must be set aside and remitted for fresh decision after hearing.

Relevance The controlling authority on the natural-justice content of section 250 proceedings.

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

Holding The appellate authority's powers are co-terminous with the AO's; it can confirm, reduce, enhance or annul and direct further inquiry.

Relevance Frames the breadth of the section 250(4) inquiry power and the section 251 disposal options.

Cluster 2 — Power of inquiry and additional evidence

Jute Corporation of India Ltd. v. CIT, (1991) 187 ITR 688 (SC)

Holding There is no fetter on the first appellate authority entertaining a new/additional ground if the facts are on record and the ground is bona fide and could not earlier have been raised; the discretion must be exercised judicially.

Relevance Read with section 250(4), supports a full and fair inquiry, including new grounds, at the first appellate stage.

Principle — Rule 46A discipline

Position Additional evidence is admissible only within Rule 46A's gateways and only after the AO has had an opportunity to rebut it; an order resting on additional evidence taken behind the AO's back is liable to be set aside. The authority's independent power under section 250(4) to call for evidence is not curtailed by Rule 46A but must still observe natural justice.

Caution Stated from Rule 46A and settled practice; cite the governing High Court authority for the bench concerned.

Cluster 3 — No remand power after 1-6-2001

Principle (statutory, post-Finance Act 2001)

Position Since 1-6-2001 the first appellate authority cannot set aside the assessment and remand it; it must decide the appeal on merits. A blanket remand is without jurisdiction, though a targeted inquiry/report under section 250(4) remains permissible.

Caution Flows from the amendment of section 251 and the corresponding change to section 250 practice.