Section 363 — Orders of ITAT | ITA 2025

Section 363 — - ORDERS OF APPELLATE TRIBUNAL

Section 363 is the substantive equivalent of 1961 s. 254 -- the framework for ITAT'S POWERS and FINAL ORDERS. The provision establishes: (a) ITAT can pass any order it thinks fit -- broad powers; (b) typically confirm / vary / reverse / modify; (c) RECTIFICATION power for mistakes apparent from record (parallel to s. 287); (d) TIME-LIMIT 4 years for ITAT order disposal (CBDT instruction; not statutorily binding). Critical for understanding ITAT's wide discretion.

Statutory text — Income-tax Act, 2025

Marginal note -- Orders of Appellate Tribunal

(1) The Appellate Tribunal may, after giving both the parties to the appeal, an opportunity of being heard, pass such orders thereon as it thinks fit.

(2) The Appellate Tribunal may amend any order passed by it under sub-section (1) for the rectification of any mistake apparent from record, within six months from the end of the month in which the order was passed, if the mistake is brought to its notice by the assessee or the Assessing Officer.

(3) An amendment, as referred to in sub-section (2), which has the effect of enhancing an assessment or reducing a refund or otherwise increasing the liability of the assessee, shall not be made, unless the assessee has been allowed a reasonable opportunity of being heard.

(4) Any application filed by the assessee under sub-section (2) shall be accompanied by a fee of ` 50.

(5) In every appeal, the Appellate Tribunal, where it is possible, may hear and decide such appeal within four years from the end of the financial year in which such appeal is filed under section 362(1) or (2).

(6) The Appellate Tribunal may, after considering the merits of the application made by the assessee, pass an order of stay in any proceedings relating to an appeal filed under section 362(1), for a period not exceeding one hundred and eighty days from the date of such order, subject to the condition that the assessee—

(a) deposits not less than 20% of the amount of tax, interest, fee, penalty or any other sum payable under this Act; or

(b) furnishes security of equal amount as referred to in clause (a), and the Appellate Tribunal shall dispose of the appeal within the said period of stay specified in that order.

(7) No extension of stay, as referred to in sub-section (6), shall be granted by the Appellate Tribunal, where such appeal is not so disposed of within the said period of stay as specified in the order of stay passed under the said sub-section, unless—

(a) the assessee makes an application and has complied with the condition referred to in sub-section (6); and

(b) the Appellate Tribunal is satisfied that the delay in disposing of the appeal is not attributable to the assessee, so, however, that the aggregate of the period of stay originally allowed and the period of stay so extended shall not exceed three hundred and sixty-five days and the Appellate Tribunal shall dispose of the appeal within the period or periods of stay so extended or allowed.

(8) The order of stay shall stand vacated if the appeal is not disposed of within the period allowed under sub-section (6) or (7), even if the delay in disposing of the appeal is not attributable to the assessee.

(9) The cost of any appeal to the Appellate Tribunal shall be at the discretion of that Tribunal. 70 [(10) The Appellate Tribunal shall—

(a) send a copy of any order passed under this section to the assessee; and

(b) a copy of such order shall also be sent to the jurisdictional Principal Com- missioner or Commissioner, electronically on the designated portal designed by the Director General or Principal Director General and the provisions relating to time limits under this Act for any appeal, reference, revision, or otherwise, shall apply accordingly.]

(11) Save as provided in section 365, orders passed by the Appellate Tribunal on appeal shall be final. Procedure of Appellate Tribunal.

Corresponding provision — 1961 regime

INCOME-TAX ACT, 2025	INCOME-TAX ACT, 1961
INCOME-TAX ACT, 2025 -- s. 363	INCOME-TAX ACT, 1961 -- s. 254
Sub-s. (1) -- ITAT can pass any order it thinks fit	1961 s. 254(1)
Sub-s. (2) -- Rectification of mistake apparent from record	1961 s. 254(2)
Sub-s. (3) -- Costs award	1961 s. 254(2A)
Sub-s. (4) -- 4-year disposal target	1961 s. 254(2A) read with FA 2008
Sub-s. (5) -- Stay extension up to 365 days	1961 s. 254(2A) Proviso

ITAT POWERS (sub-s. 1): (a) PASS ANY ORDER it thinks FIT -- broad jurisdictional discretion; (b) Includes confirm / vary / reverse / modify / annul AO/CIT(A) order; (c) Power to direct fresh assessment in specific limited cases; (d) ENHANCEMENT permissible (subject to natural-justice safeguards); (e) Cannot exceed grounds raised in appeal/cross-objection. RECTIFICATION (sub-s. 2): (a) ITAT can rectify own order for MISTAKE APPARENT FROM RECORD; (b) Application by either party within 6 months from order date; (c) Same standard as s. 287 -- mistake must be self-evident, not debatable. TIME-LIMIT (sub-s. 4): 4-YEAR target from filing for disposal; CBDT instruction, not statutorily binding. ITAT backlog significant; actual timelines often 5-7 years. STAY OF DEMAND (sub-s. 5): ITAT can grant stay up to 180 days; extendable up to total 365 days subject to specific conditions. Beyond 365 days, stay deemed lapsed unless extension specifically granted.

PRECEDENT VALUE OF ITAT DECISIONS

(i) BINDING on lower authorities (AO / CIT(A)) within ITAT bench's territorial jurisdiction; (ii) PERSUASIVE across other benches; conflicts resolved by President's reference to larger bench; (iii) HC decisions BINDING within HC's territorial jurisdiction; ITAT bound by jurisdictional HC; (iv) SC decisions BINDING universally; (v) Practitioner: cite jurisdictional HC + relevant ITAT decisions for binding effect.

PRACTITIONER NOTES

(i) ORDER REVIEW -- comprehensive review for grounds-coverage / errors; rectification window 6 months. (ii) STAY MONITORING -- 365-day cap; extend strategically. (iii) HC APPEAL POST-ITAT -- 120 days from ITAT order; question of law only. (iv) PRECEDENT CITATION -- emphasise jurisdictional HC + favourable ITAT decisions.

CROSS-REFERENCES

Section 362 -- ITAT appeals.
Section 364 -- ITAT procedure.
Section 365 -- HC appeal.
Section 287 -- Rectification (parallel).
Section 369 -- Stay of demand.

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