CHAPTER XX — APPEALS AND REVISION | B.—Appeals to the Appellate Tribunal
CHAPTER XX — APPEALS AND REVISION | B.—Appeals to the Appellate Tribunal
Section 255 — Procedure of Appellate Tribunal
Case Laws & Commentary — Income-tax Act, 1961 (as amended by the Finance Act, 2026) — bharattax.co Treatise
Status: Live. Benches and their constitution by the President; single-member (SMC) benches up to the prescribed monetary limit; reference to a Third Member / larger bench on difference of opinion; the Tribunal's power to regulate its own procedure; faceless-Tribunal enabling power.
Finance Act, 2026: No amendment. The Finance Act, 2026 does not touch section 255.
Nature / mechanism: Internal procedure of the ITAT — bench constitution, SMC jurisdiction, the third-member mechanism, and the Tribunal's control over its own process.
Litigation profile: Modest litigation — chiefly on third-member references, SMC limits, and the Tribunal's procedural autonomy.
A. COMMENTARY
Benches, SMC and the third-member mechanism
The President constitutes benches (ordinarily one judicial and one accountant member). A single member (SMC) may dispose of cases where the assessed total income does not exceed the prescribed limit. On a difference of opinion, the point is stated and referred to one or more other members (the Third Member), and the matter is decided by the majority — the third member's view, with the concurring member, prevailing.
Master of its own procedure
Subject to the Act and the Rules, the Tribunal has the power to regulate its own procedure and that of its benches, including sitting places. This carries incidental powers necessary to do justice (Paras Laminates), exercised consistently with natural justice.
Faceless Tribunal enabling power
Section 255 also carries the enabling power for a faceless scheme for Tribunal proceedings, to be operationalised by notification — interface-minimised disposal with transparency and accountability.
B. STATUTORY TEXT (verbatim)
Reproduced verbatim from the Income-tax Act, 1961 (as amended up to the Finance Act, 2025). Inline numerals in square brackets are the bare Act's amendment-footnote markers.
Procedure of Appellate Tribunal.
255. (1) The powers and functions of the Appellate Tribunal may be exercised and discharged by Benches constituted by the President of the Appellate Tribunal from among the members thereof.
(2) Subject to the provisions contained in sub-section (3), a Bench shall consist of one judicial member and one accountant member.
(3) The President or any other member of the Appellate Tribunal authorised in this behalf by the Central Government may, sitting singly, dispose of any case which has been allotted to the Bench of which he is a member and which pertains to an assessee whose total income as computed by the Assessing Officer in the case does not exceed fifty lakh rupees, and the President may, for the disposal of any particular case, constitute a Special Bench consisting of three or more members, one of whom shall necessarily be a judicial member and one an accountant member.
(4) If the members of a Bench differ in opinion on any point, the point shall be decided according to the opinion of the majority, if there is a majority, but if the members are equally divided, they shall state the point or points on which they differ, and the case shall be referred by the President of the Appellate Tribunal for hearing on such point or points by one or more of the other members of the Appellate Tribunal, and such point or points shall be decided according to the opinion of the majority of the members of the Appellate Tribunal who have heard the case, including those who first heard it.
(5) Subject to the provisions of this Act, the Appellate Tribunal shall have power to regulate its own procedure and the procedure of Benches thereof in all matters arising out of the exercise of its powers or of the discharge of its functions, including the places at which the Benches shall hold their sittings.
(6) The Appellate Tribunal shall, for the purpose of discharging its functions, have all the powers which are vested in the income-tax authorities referred to in section 131, and any proceeding before the Appellate Tribunal shall be deemed to be a judicial proceeding within the meaning of sections 193 and 228 and for the purpose of section 196 of the Indian Penal Code8 (45 of 1860), and the Appellate Tribunal shall be deemed to be a civil court for all the purposes of section 195 and Chapter XXXV of the Code of Criminal Procedure, 1898 (5 of 1898)84.
(7) The Central Government may make a scheme, by notification in the Official Gazette, for the purposes of disposal of appeals by the Appellate Tribunal so as to impart greater efficiency, transparency and accountability by—
(a) eliminating the interface between the Appellate Tribunal and parties to the appeal 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.
(8) The Central Government may, for the purposes of giving effect to the scheme made under sub-section
(7), by notification in the Official Gazette, direct that any of the provisions of this Act shall not apply to such scheme or shall apply with such exceptions, modifications and adaptations as may be specified in the said notification. 85[***]
(9) Every notification issued under sub-section (7) and sub-section (8) shall, as soon as may be after the notification is issued, be laid before each House of Parliament. No. 46 of 2023". *. Vide Notification No. S.O. 2790(E), dated 16-7-2024, now read as “Bharatiya Nyaya Sanhita, 2023”. Act No. 6 of 2022, w.e.f. 1-4-2022 and Act No. 08 of 2024, w.e.f. 1-4-2024, read as under: "Provided that no such direction shall be issued after the 31st day of March, 2025."
C. AUTHORITIES
The authorities concern the Tribunal's procedural autonomy and incidental powers.
Cluster 1 — Procedural autonomy and incidental powers
Union of India v. Paras Laminates (P) Ltd., (1990) 186 ITR 722 (SC)
Holding The Tribunal has, by necessary implication, incidental and ancillary powers to discharge its functions, including the President's power to refer a matter to a larger bench to resolve conflicting views.
Relevance Supports the third-member/larger-bench mechanism and procedural control under section 255.
Ajay Gandhi v. B. Singh, (2004) 265 ITR 451 (SC)
Holding The President's administrative powers (bench constitution, transfer) serve the independent and efficient functioning of the Tribunal.
Procedural; the controlling rule is statutory — only the point of difference goes to the third member, who decides it, and the appeal is then disposed of by the majority view.
Principle (statutory)
Position On a difference between members, the case is not reheard at large by the third member; only the specific question(s) of difference are referred and answered, and the bench gives effect to the majority.
Caution Stated from section 255(4); verify the precise framing of the questions referred.
CHAPTER XX — APPEALS AND REVISION | B.—Appeals to the Appellate Tribunal
Section 255 — Procedure of Appellate Tribunal
Case Laws & Commentary — Income-tax Act, 1961 (as amended by the Finance Act, 2026) — bharattax.co Treatise
Status: Live. Benches and their constitution by the President; single-member (SMC) benches up to the prescribed monetary limit; reference to a Third Member / larger bench on difference of opinion; the Tribunal's power to regulate its own procedure; faceless-Tribunal enabling power.
Finance Act, 2026: No amendment. The Finance Act, 2026 does not touch section 255.
Nature / mechanism: Internal procedure of the ITAT — bench constitution, SMC jurisdiction, the third-member mechanism, and the Tribunal's control over its own process.
Litigation profile: Modest litigation — chiefly on third-member references, SMC limits, and the Tribunal's procedural autonomy.
A. COMMENTARY
Benches, SMC and the third-member mechanism
The President constitutes benches (ordinarily one judicial and one accountant member). A single member (SMC) may dispose of cases where the assessed total income does not exceed the prescribed limit. On a difference of opinion, the point is stated and referred to one or more other members (the Third Member), and the matter is decided by the majority — the third member's view, with the concurring member, prevailing.
Master of its own procedure
Subject to the Act and the Rules, the Tribunal has the power to regulate its own procedure and that of its benches, including sitting places. This carries incidental powers necessary to do justice (Paras Laminates), exercised consistently with natural justice.
Faceless Tribunal enabling power
Section 255 also carries the enabling power for a faceless scheme for Tribunal proceedings, to be operationalised by notification — interface-minimised disposal with transparency and accountability.
B. STATUTORY TEXT (verbatim)
Reproduced verbatim from the Income-tax Act, 1961 (as amended up to the Finance Act, 2025). Inline numerals in square brackets are the bare Act's amendment-footnote markers.
Procedure of Appellate Tribunal.
255. (1) The powers and functions of the Appellate Tribunal may be exercised and discharged by Benches constituted by the President of the Appellate Tribunal from among the members thereof.
(2) Subject to the provisions contained in sub-section (3), a Bench shall consist of one judicial member and one accountant member.
(3) The President or any other member of the Appellate Tribunal authorised in this behalf by the Central Government may, sitting singly, dispose of any case which has been allotted to the Bench of which he is a member and which pertains to an assessee whose total income as computed by the Assessing Officer in the case does not exceed fifty lakh rupees, and the President may, for the disposal of any particular case, constitute a Special Bench consisting of three or more members, one of whom shall necessarily be a judicial member and one an accountant member.
(4) If the members of a Bench differ in opinion on any point, the point shall be decided according to the opinion of the majority, if there is a majority, but if the members are equally divided, they shall state the point or points on which they differ, and the case shall be referred by the President of the Appellate Tribunal for hearing on such point or points by one or more of the other members of the Appellate Tribunal, and such point or points shall be decided according to the opinion of the majority of the members of the Appellate Tribunal who have heard the case, including those who first heard it.
(5) Subject to the provisions of this Act, the Appellate Tribunal shall have power to regulate its own procedure and the procedure of Benches thereof in all matters arising out of the exercise of its powers or of the discharge of its functions, including the places at which the Benches shall hold their sittings.
(6) The Appellate Tribunal shall, for the purpose of discharging its functions, have all the powers which are vested in the income-tax authorities referred to in section 131, and any proceeding before the Appellate Tribunal shall be deemed to be a judicial proceeding within the meaning of sections 193 and 228 and for the purpose of section 196 of the Indian Penal Code8 (45 of 1860), and the Appellate Tribunal shall be deemed to be a civil court for all the purposes of section 195 and Chapter XXXV of the Code of Criminal Procedure, 1898 (5 of 1898)84.
(7) The Central Government may make a scheme, by notification in the Official Gazette, for the purposes of disposal of appeals by the Appellate Tribunal so as to impart greater efficiency, transparency and accountability by—
(a) eliminating the interface between the Appellate Tribunal and parties to the appeal 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.
(8) The Central Government may, for the purposes of giving effect to the scheme made under sub-section
(7), by notification in the Official Gazette, direct that any of the provisions of this Act shall not apply to such scheme or shall apply with such exceptions, modifications and adaptations as may be specified in the said notification. 85[***]
(9) Every notification issued under sub-section (7) and sub-section (8) shall, as soon as may be after the notification is issued, be laid before each House of Parliament. No. 46 of 2023". *. Vide Notification No. S.O. 2790(E), dated 16-7-2024, now read as “Bharatiya Nyaya Sanhita, 2023”. Act No. 6 of 2022, w.e.f. 1-4-2022 and Act No. 08 of 2024, w.e.f. 1-4-2024, read as under: "Provided that no such direction shall be issued after the 31st day of March, 2025."
C. AUTHORITIES
The authorities concern the Tribunal's procedural autonomy and incidental powers.
Cluster 1 — Procedural autonomy and incidental powers
Union of India v. Paras Laminates (P) Ltd., (1990) 186 ITR 722 (SC)
Holding The Tribunal has, by necessary implication, incidental and ancillary powers to discharge its functions, including the President's power to refer a matter to a larger bench to resolve conflicting views.
Relevance Supports the third-member/larger-bench mechanism and procedural control under section 255.
Ajay Gandhi v. B. Singh, (2004) 265 ITR 451 (SC)
Holding The President's administrative powers (bench constitution, transfer) serve the independent and efficient functioning of the Tribunal.
Relevance Underpins section 255 bench administration.
Cluster 2 — Third-member references (candour)
Procedural; the controlling rule is statutory — only the point of difference goes to the third member, who decides it, and the appeal is then disposed of by the majority view.
Principle (statutory)
Position On a difference between members, the case is not reheard at large by the third member; only the specific question(s) of difference are referred and answered, and the bench gives effect to the majority.
Caution Stated from section 255(4); verify the precise framing of the questions referred.