Income Tax Department Explains Appeals and Revisions Under Income Tax Act, 2025: Key Transition Rules for Pending and New Cases

The Income Tax Department has published a detailed set of FAQs on appeals and revisions under the Income Tax Act, 2025, giving taxpayers and professionals practical guidance on how the new law interacts with proceedings linked to earlier assessment years. The most important message is continuity: the appellate structure has not been fundamentally reshaped, and many proceedings connected with tax years beginning before 1 April 2026 continue under the Income Tax Act, 1961.

Appellate hierarchy remains unchanged

The Department states that the basic sequence of appellate remedies remains the same: Assessing Officer, followed by JCIT(A) or CIT(A), then the Income Tax Appellate Tribunal, High Court and Supreme Court. It also says the core powers of appellate authorities, including confirming, reducing, enhancing or annulling an assessment, admitting additional grounds, calling for a remand report, rectifying mistakes and granting stay subject to conditions, remain materially unchanged.

The new Act consolidates the appellate and remedial framework into new section numbers. First appeals are covered by sections 356 to 360, appeals to the Appellate Tribunal by sections 361 to 364, and further appeals to the High Court and Supreme Court by sections 365 to 368. Revisionary powers are placed in sections 377 and 378, while the Dispute Resolution Committee is dealt with in section 379.

Pending appeals generally continue under the 1961 Act

A central transition rule is found in section 536. The FAQ explains that an appeal already pending before CIT(A), the Tribunal or a court as on 1 April 2026 continues under the Income Tax Act, 1961. There is no requirement to file a fresh appeal merely because the Income Tax Act, 2025 has commenced.

The same principle also applies where a proceeding relates to a tax year beginning before 1 April 2026 but is initiated after that date. The Department specifically explains that an appeal filed after 1 April 2026 for Assessment Year 2026-27 or an earlier assessment year will still be governed by the repealed 1961 Act. This is important for professionals determining the correct statutory provision, form and limitation framework.

Expired limitation does not revive under the new law

The FAQs make clear that a right of appeal, revision or reference whose limitation had already expired before commencement of the new Act is not revived simply because the new legislation contains a different or extended time period. However, where the old law permits condonation of delay, the taxpayer may still seek that remedy by showing sufficient cause.

For an appeal relating to Assessment Year 2024-25, the Department gives a concrete example: the appeal continues under the Income Tax Act, 1961 and the ordinary limitation period remains 30 days from receipt of the relevant order.

Rectification and remand proceedings follow the original law

The Department treats rectification and remand proceedings as continuations of the original proceeding. Accordingly, rectification of an appellate order for an earlier assessment year continues under the corresponding provision of the 1961 Act. Likewise, where the ITAT remands a case on or after 1 April 2026 for an earlier assessment year such as AY 2023-24, the Assessing Officer is required to complete the remand process under the 1961 Act rather than treating the remand as a fresh proceeding under the 2025 Act.

DRC framework is largely carried forward

The FAQ says the Dispute Resolution Committee framework has not undergone a substantive structural change. Section 379 of the Income Tax Act, 2025 broadly reenacts section 245MA of the 1961 Act. The Department states that the eligibility thresholds remain materially the same, including a variation below ₹10 lakh and returned income below ₹50 lakh, subject to the statutory exclusions and conditions.

It also clarifies that section 379(2) expressly allows the DRC to modify variations in a specified order in addition to granting penalty waiver or prosecution immunity. Where a draft assessment order could potentially fall within both the DRP and DRC frameworks, the taxpayer may have access to either route if eligibility conditions are met, but the remedies cannot be pursued concurrently.

Revision and repetitive-litigation provisions

The mechanisms previously found in sections 158A and 158AB of the 1961 Act for avoiding repetitive litigation on identical questions of law have been reorganised as sections 375 and 376 of the 2025 Act. The Department says the essential trigger remains the same: an identical question of law must already be pending before a High Court or the Supreme Court.

For revisionary jurisdiction, section 377 continues the familiar requirement that an order must be both erroneous and prejudicial to the interests of the Revenue. The normal outer limitation remains two years from the end of the financial year in which the order sought to be revised was passed. The new Act also expressly provides a minimum residual period of 60 days in specified situations after excluding periods such as court stays or rehearing time.

Practical takeaway for tax professionals

The key compliance task is to identify the tax year and the procedural history before choosing the governing provision. A matter linked to a pre-1 April 2026 tax year will often continue under the Income Tax Act, 1961 even when the appeal, rectification, remand or revision action occurs after commencement of the 2025 Act. Professionals should therefore map the proceeding to the transition rules in section 536 before relying on the renumbered provisions of the new Act.

Key takeaway

The official FAQ addresses practical transition questions that tax professionals and taxpayers are likely to search while handling proceedings spanning the 1961 and 2025 Acts.