Income Tax Notice & Appeal Flow — Income-tax Act, 2025
From an inquiry notice under Section 268 through to the Supreme Court — a stage-by-stage reference for the forms, authorities, and time limits that apply at each step of an income tax dispute under the new Income-tax Act, 2025.
Assessment Stage
| Stage | Form / Notice | Officer / Authority | Due Date / Time Limit | Legal Basis | Description |
|---|---|---|---|---|---|
| 1. Inquiry Notice | Notice u/s 268 | Assessing Officer (AO) / Faceless Centre (NFAC) | Time specified in notice (typically 15–30 days) | Section 268 [Old: Sec 142(1)] | Notice to file return or produce accounts, documents and information for assessment. |
| 2. Compliance by Taxpayer | e-Reply (e-Portal) | Taxpayer | Within time specified in notice / extended period | Section 268 [Old: Sec 142(1)] | Furnish return, books of account, documents, statement of assets & liabilities, special audit reply. |
| 3. Scrutiny Notice | Notice u/s 270(2) | AO / National Faceless Assessment Centre (NFAC) | Within 3 months from end of FY in which return is filed | Section 270(2) [Old: Sec 143(2)] | Triggers detailed scrutiny / regular assessment proceedings. Failure to respond may invite penalty. |
| 4. Reply & Submissions | e-Submission (e-Portal) | Taxpayer | By date specified in notice / SCN | Section 270 [Old: Sec 143(2)/(3)] | Written submissions, evidence, computation, reconciliations, video-conference hearing requests. |
Decision point: Reply satisfactory → Assessment u/s 270 (no variation / accepted). Variation proposed → Show Cause / Draft Order / Best Judgment.
Final Assessment & Demand
| Stage | Form / Notice | Officer / Authority | Due Date / Time Limit | Legal Basis | Description |
|---|---|---|---|---|---|
| 5. Draft Order & DRP (eligible assessees) | Draft Order / Form 35A | AO / NFAC → Dispute Resolution Panel (DRP) | Objections to DRP within 30 days of draft order; DRP directions within 9 months | Section 275 [Old: Sec 144C] | Eligible assessees (TP cases, foreign companies) may approach DRP before final order. |
| 6. Best Judgment Assessment | Order u/s 271 | AO / Faceless Assessment Unit | Within time limit u/s 286 (generally 12 months from end of TY) | Section 271 [Old: Sec 144] | Ex-parte assessment on failure to file return / comply with notice u/s 268 or 270(2). |
| 7. Final Assessment Order | Order u/s 270 r/w 273 | AO / NFAC (faceless u/s 273) | 12 months from end of Tax Year (18 months for search cases) | Sections 270, 273, 286 [Old: 143(3), 144B, 153] | Final assessment of total income / loss; computes tax, interest, initiates penalty. |
| 8. Notice of Demand | Notice u/s 289 | AO | Pay within 30 days of service of notice | Section 289 [Old: Sec 156] | Demand for tax, interest, penalty, fee, fine. Triggers stay / appeal timelines. |
Reassessment & Rectification (Parallel Routes)
| Stage | Form / Notice | Officer / Authority | Due Date / Time Limit | Legal Basis | Description |
|---|---|---|---|---|---|
| 9. Pre-Reassessment SCN | SCN u/s 281(1) | Jurisdictional AO (approval u/s 284) | Reply within time specified (typically 7–14 days) | Section 281 [Old: Sec 148A] | Information-based show cause for reopening; AO passes reasoned order u/s 281(3). |
| 10. Reassessment Notice | Notice u/s 280 | Jurisdictional AO (sanction of specified authority) | Within limitation u/s 282 (3 / 5 yrs based on escaped income) | Sections 279, 280, 282, 284 [Old: 147, 148, 149, 151] | Notice to assess / reassess income escaping assessment for the relevant tax year. |
| 11. Rectification (parallel route) | Application u/s 287 | Same authority that passed the order (AO / CIT(A) / ITAT) | Within 4 years from end of FY of order; disposal within 6 months of application | Section 287 [Old: Sec 154] | Mistake apparent from record; not a substitute for appeal. Hearing if liability enhanced. |
Aggrieved by an assessment, penalty, or rectification order? The appellate remedy path begins below.
Appellate Remedy
| Stage | Form / Notice | Officer / Authority | Due Date / Time Limit | Legal Basis | Description |
|---|---|---|---|---|---|
| 12. First Appeal | Form 99 (replaces Form 35) | JCIT(A) [small cases] / CIT(A) [other cases] | Within 30 days of service of demand notice; delay condonable | Sections 356, 357, 358 [Old: 246A, 249] | Pre-deposit of tax on returned income mandatory (Sec 358(6)). Fee: ₹250 / ₹500 / ₹1,000. |
| 13. Order in First Appeal | Order u/s 359 | JCIT(A) / CIT(A) | No fixed statutory limit (target: 1 year from end of FY of filing) | Sections 359, 360 [Old: Sections 250, 251] | Power to confirm, reduce, enhance, annul; can admit additional evidence (Rule 192). |
| 14. Second Appeal (ITAT) | Form 115 (replaces Form 36) | Income Tax Appellate Tribunal (ITAT) | Within 60 days from receipt of CIT(A)/JCIT(A) order | Sections 361, 362, 363 [Old: Sections 253, 254] | Mandatory e-filing with DSC. Fee depends on assessed income (₹500 / ₹1,500 / 1% capped at ₹10,000). |
| 15. Cross-Objection | Form 116 (replaces Form 36A) | ITAT | Within 30 days from receipt of notice of appeal | Section 361(4) [Old: Sec 253(4)] | Respondent may support order on any ground decided against him. |
| 16. Revision by Commissioner (parallel route) | Sec 377 / 378 | PCIT / CIT | Sec 377: 2 years from end of FY of order. Sec 378: 1 year for assessee application | Sections 377, 378 [Old: Sections 263, 264] | Sec 377 — revenue prejudicial revision by CIT; Sec 378 — revision in favour of assessee. |
| 17. Order of ITAT | Order u/s 363 | Income Tax Appellate Tribunal | No fixed statutory time limit (target: 4 years from end of FY of filing) | Section 363 [Old: Sec 254] | ITAT is the final fact-finding authority. Order is final on facts; communicated to parties & AO for giving effect. |
| 18. Appeal to High Court | Appeal Memo (Sec 365) | Jurisdictional High Court | Within 120 days from receipt of ITAT order | Sections 365, 366 [Old: Sec 260A] | Only on substantial question of law. Department monetary threshold applies for revenue appeals. |
| 19. Appeal to Supreme Court | Civil Appeal / SLP | Supreme Court of India | As per Supreme Court Rules / SLP within 90 days of HC order | Sections 367, 368 [Old: Sections 261, 262] | Appeal where HC certifies the case fit; or SLP under Article 136 of the Constitution. |
Key Takeaways
- From 01.04.2026, the Income-tax Act, 2025 governs all Tax Year 2026-27 onwards proceedings; older years continue under the 1961 Act by virtue of Section 536(2)(c).
- Reassessment 2-step procedure (SCN u/s 281 → Notice u/s 280) is preserved; only the jurisdictional AO can initiate (no faceless reopening).
- Form 99 for first appeal and Form 115 for ITAT appeal are mandatory e-filings with DSC/EVC. Pre-deposit of tax on returned income u/s 358(6) is a condition for admission of first appeal.
- Track 30-day / 60-day / 120-day windows from communication of orders rigorously; delay is condonable but must be applied for with reasons.
- Use Section 287 (rectification) and Section 378 (revision in assessee’s favour) as parallel non-adversarial remedies before exhausting appeal.
Sources & references: Income-tax Act, 2025 (Sections 268, 270, 271, 273, 275, 279–282, 284, 286, 287, 289, 356–368, 377–378); Income-tax Rules, 2026 (Rules 167, 191–195); CBDT FAQs on Interplay & Transition; ITAT Amendment Rules, 2025. Old Act references shown in square brackets for cross-reference.
Disclaimer: This chart is a quick-reference summary and does not constitute legal or tax advice. Consult the bare Act, applicable rules, and circulars — or get in touch with our team — before relying on it for any litigation or advisory decision.
