Appealing to the Commissioner (Appeals): Form 35

An assessment order arrives with a notice of demand, and the clock starts at once. The first appeal is the only stage at which facts can be argued in full before an authority outside the assessing unit, and it is lost by missing a 30-day window or by failing to pay the tax on the returned income first. This guide sets out who hears the appeal, which form is used, what must be paid, and how the e-filing portal takes it.

Which Act governs the appeal

The Income-tax Act, 2025 replaced the Income-tax Act, 1961 from 1 April 2026. The 2025 Act does not move old-year appeals across. Its repeal and savings provision, section 536, says in sub-section (2)© that the 1961 Act “shall continue to apply” to pending proceedings and to proceedings begun on or after 1 April 2026, “including … appeals”, for any tax year beginning before 1 April 2026, “as per the procedure specified in the repealed Income-tax Act”. Section 536(2)(e) keeps appeals already pending on that date before the old authorities.

The practical split is:

Order relates to	Governing Act	Appeal provisions	Form
AY 2026-27 (FY 2025-26) and every earlier year	Income-tax Act, 1961	ss.246, 246A, 249 to 251	Form 35 (Income-tax Rules, 1962)
Tax year 2026-27 (beginning 1 April 2026) onwards	Income-tax Act, 2025	ss.356 to 360	Form No. 99 (Income-tax Rules, 2026)

For the next year or so almost every assessment, penalty and rectification order that is appealed will be a 1961 Act order. Orders under the 2025 Act come first from processing of TDS and TCS statements and other orders for tax year 2026-27; assessments of tax year 2026-27 returns follow later.

Who hears it: the Commissioner (Appeals) or the Joint Commissioner (Appeals)

Since 1 April 2023 there have been two first appellate authorities.

• The Joint Commissioner (Appeals), under section 246 of the 1961 Act, hears appeals against specified orders of an Assessing Officer below the rank of Joint Commissioner: intimations under section 143(1), assessments under sections 143(3) and 144, reassessments under section 147, TDS and TCS intimations and orders (sections 200A, 201, 206C(6A), 206CB), penalty orders, and rectifications of these. The proviso to section 246(1) bars an appeal to him where the order was passed “by or with the prior approval of, an income-tax authority above the rank of Deputy Commissioner”.
• The Commissioner (Appeals), under section 246A, hears everything else in the list in that section, including orders of higher-ranking officers.

The Board may move pending appeals between the two (section 246(2) and (3)), and the appellant is then given an opportunity of being reheard (section 246(4)).

The 2025 Act repeats the structure. Section 356 lists the orders appealable to the Joint Commissioner (Appeals), with the same bar for orders passed by or with the approval of an authority above Deputy Commissioner (section 356(2)). Section 357 lists the orders appealable to the Commissioner (Appeals). Section 246A(1)(a) of the 1961 Act and section 357(d) and (e) of the 2025 Act exclude an assessment made in pursuance of directions of the Dispute Resolution Panel; that order goes straight to the Tribunal (see The Dispute Resolution Panel).

The appellant does not choose between the two. The portal routes the appeal according to the order appealed against.

Faceless hearing

Both authorities sit in faceless mode. Appeals before the Commissioner (Appeals) are disposed of under the Faceless Appeal Scheme, 2021 (S.O. 5429(E), 28 December 2021), which replaced the 2020 scheme. Appeals before the Joint Commissioner (Appeals) are disposed of under the e-Appeals Scheme, 2023 (S.O. 2352(E), 29 May 2023), made under section 246(5). Under both, all communication passes through the registered account on the portal, and the officer “may condone the delay in filing appeal” and must record the reasons in the appeal order (paragraph 5 of the 2021 scheme; paragraph 6 of the 2023 scheme).

Neither scheme requires personal appearance, but each allows the appellant or the authorised representative to ask for a personal hearing, and the officer “shall allow the request”. The hearing is by video conference (paragraph 12 of the 2021 scheme; paragraph 13 of the 2023 scheme). Section 536(2)(u) of the 2025 Act deems these faceless schemes to have been made under the corresponding provisions of the new Act and keeps them in force, and section 356(5) of the 2025 Act carries the power to make such a scheme for the Joint Commissioner (Appeals).

What to have ready

• The order appealed against and the notice of demand. The portal’s Form 35 user manual says these are downloaded from Pending Actions, then E-Proceedings. Where the order bears a DIN, the form picks it from a list.
• The date of service of the notice of demand. It fixes the 30-day period.
• Proof that the tax on the returned income has been paid. No appeal is admitted otherwise (see below). The challan details come from the portal’s tax-payment records.
• The appeal fee challan.
• Statement of facts and grounds of appeal. The portal manual describes a facts field of up to 10,000 characters and a separate entry for each ground.
• Any additional evidence, with the reason it was not produced before the Assessing Officer. Rule 46A of the Income-tax Rules, 1962 (rule 192 of the 2026 Rules for 2025 Act appeals) admits new evidence only where the Assessing Officer refused to admit it, the appellant was prevented by sufficient cause, or the Assessing Officer did not give sufficient opportunity.
• A reasoned application for condonation, if the appeal is late.
• A DSC, if the return for that year was verified by DSC.

The form and its parts

Form 35 is filed under section 249 of the 1961 Act and rule 45 of the 1962 Rules. For 2025 Act orders, rule 167 of the Income-tax Rules, 2026 says that an appeal to the Joint Commissioner (Appeals) or the Commissioner (Appeals) “shall be made in Form No. 99”, under section 358.

The portal’s Form 35 manual takes the appellant through these tabs, in this order:

1. Basic information: address and contact details.
2. Order against which appeal is filed: year type and order particulars, largely pre-filled.
3. Pending appeal: whether another appeal for the same year is pending.
4. Appeal details: whether the appeal relates to an assessment or a penalty, and the figures.
5. Details of taxes paid: whether the tax on returned income has been paid in full or, where no return was filed, an amount equal to the advance tax payable.
6. Statement of facts, grounds and additional evidence.
7. Appeal filing details: whether there is a delay and, if so, the grounds for condonation, and the fee challan.
8. Attachments.
9. Verification.

The time limit, and condonation

Section 249(2) gives 30 days from the date of service of the notice of demand where the appeal relates to an assessment or a penalty, and 30 days from service of the order in any other case. Section 268 excludes the day of service and, where a copy of the order was not furnished with the notice, the time needed to obtain one. The 2025 Act keeps the same 30 days in section 358(3), the same exclusion in section 372, and a new exclusion in section 358(4) for the time an application for immunity under section 440 was pending before it was rejected. The 1961 Act has the equivalent for section 270AA applications in the second proviso to section 249(2)(b).

Section 249(3) lets the authority admit an appeal after that period “if he is satisfied that the appellant had sufficient cause for not presenting it within that period”. Section 358(5) of the 2025 Act is identical.

Two Supreme Court decisions mark the range. In Collector, Land Acquisition, Anantnag v. Mst. Katiji (1987) 167 ITR 471 (SC), the State’s appeal against an eightfold enhancement of land compensation had been dismissed by the High Court as four days late. The Court condoned the delay and said that “every day’s delay must be explained” does not call for a pedantic approach, and that when substantial justice and technical considerations conflict, substantial justice is to be preferred. In Pathapati Subba Reddy v. Special Deputy Collector (LA), 2024 INSC 286, decided on 8 April 2024, the Court upheld a refusal to condone a delay of 5,659 days by legal representatives who had not been parties to the reference. It held that the liberal approach “cannot be used to defeat the substantial law of limitation”, and that condonation is discretionary and may be refused even where sufficient cause is shown, where there is inordinate delay, negligence or want of due diligence. The explanation for a delay is therefore what the condonation application has to carry.

Section 536(2)(k) of the 2025 Act adds one rule: where the period for an appeal under the 1961 Act had already expired before 1 April 2026, nothing in the 2025 Act enables that appeal merely because it allows a longer period or an extension.

The fee, and paying the admitted tax

The fee under section 249(1), and under section 358(2) of the 2025 Act, depends on the total income as computed by the Assessing Officer:

Assessed total income	Fee
Rs 1,00,000 or less	Rs 250
More than Rs 1,00,000, up to Rs 2,00,000	Rs 500
More than Rs 2,00,000	Rs 1,000
Subject matter not covered above	Rs 250

The portal manual describes payment through e-Pay Tax, choosing the assessment year, type of payment “Other Receipts (500)” and sub-type “Appeal Fees”.

Section 249(4) is a condition of admission, not a matter of merits: no appeal “shall be admitted” unless, where a return was filed, the tax due on the returned income has been paid, or, where no return was filed, an amount equal to the advance tax payable has been paid. Only the second condition can be waived, on an application, for “good and sufficient reason” (proviso to section 249(4)); section 358(7) of the 2025 Act is to the same effect. Paying the admitted tax is different from paying the disputed demand. The disputed demand remains recoverable unless it is stayed (see Stay of Demand Pending Appeal).

Signing and verification

Under rule 45 of the 1962 Rules and rule 167(2) of the 2026 Rules, the form is filed electronically, under DSC where the return of income is required to be furnished under DSC, and through EVC in other cases. It is verified by the person authorised to verify the return (section 140 of the 1961 Act; section 265 of the 2025 Act). The portal manual’s last steps are Preview, “proceed to e-Verify”, choice of the verification method, and a success message with a transaction ID.

What the appellate authority can do

Under section 251, the Commissioner (Appeals) or the Joint Commissioner (Appeals) may confirm, reduce, enhance or annul an assessment. A proviso inserted by the Finance (No. 2) Act, 2024 from 1 October 2024 also lets him set aside a best-judgment assessment under section 144 and send it back for fresh assessment. Section 360 of the 2025 Act carries both powers. Neither may enhance an assessment or penalty, or reduce a refund, without giving the appellant a reasonable opportunity to show cause (section 251(2); section 360(2)). Section 250(6A) of the 1961 Act and section 359(5) of the 2025 Act say the appeal may be decided “where it is possible” within one year from the end of the financial year in which it was filed. These words set a target, not a limitation period.

What can be changed after filing

Additional grounds may be raised later through the National Faceless Appeal Centre, with the reason they were omitted. The authority admits them if satisfied that the omission “was not wilful or unreasonable” (section 250(5); paragraph 5(1)(v) and (vi) of the 2021 scheme). Additional evidence goes through the rule 46A route described above. An order of the appellate authority can be rectified under section 154, and the scheme routes the application through the Centre (paragraph 7 of the 2021 scheme). The next step from an adverse order is the Tribunal.

The procedure in order

1. Identify the Act. AY 2026-27 and earlier years fall under the 1961 Act and Form 35. Tax year 2026-27 onwards falls under the 2025 Act and Form No. 99.
2. Note the date of service of the notice of demand or order, and count 30 days, excluding the day of service.
3. Pay the tax due on the returned income, or the advance tax amount if no return was filed.
4. Pay the appeal fee through e-Pay Tax under Other Receipts, Appeal Fees.
5. Prepare the statement of facts, grounds, and any additional evidence with the rule 46A reason.
6. File the form from Pending Actions, then E-Proceedings, or from e-File, then Income Tax Forms, completing each tab.
7. If late, state the grounds for condonation in the appeal filing details tab.
8. Verify by DSC or EVC as the return was verified, and keep the transaction ID.
9. Ask for a video-conference hearing through the portal if oral submissions are wanted.
10. Apply separately to the Assessing Officer for stay of the disputed demand.

The next guide covers the second appeal, to the Income-tax Appellate Tribunal in Form 36: Appealing to the ITAT.