Sub-section (1) requires the Joint Commissioner (Appeals) or the Commissioner (Appeals) to fix a day and place for the hearing of the appeal and to give notice of it to the appellant and to the Assessing Officer against whose order the appeal is preferred. Sub-section (2) gives the right to be heard at the hearing to the appellant, either in person or by an authorised representative, and to the Assessing Officer, either in person or by a representative.
Sub-section (3) confers three powers: to adjourn the hearing; to make such further inquiry as he thinks fit before disposing of the appeal, or to direct the Assessing Officer to make further inquiry and report the result; and to allow the appellant to go into any ground of appeal not specified in the grounds of appeal, if satisfied that its omission from the form of appeal was not wilful or unreasonable.
Sub-section (4) requires the order disposing of the appeal to be in writing and to state the points for determination, the decision on them and the reasons for the decision. Sub-section (5) says that, where it is possible, the appeal may be heard and decided within one year from the end of the financial year in which it is filed or transferred to him under section 356. Sub-section (6) requires the order, on disposal, to be communicated to the assessee and to the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner.
Why it is there
The first appeal is where most disputes are actually decided, and the section supplies the minimum content of a fair hearing: notice of the day and place to both sides, a right of audience for both, a power to inquire further so that the appeal is decided on the real facts, and a reasoned written order that can be tested further up. The power in clause (3)(c) exists because an appellant who has framed his grounds badly should not lose a point that he did not omit wilfully or unreasonably.
Who it applies to
The Joint Commissioner (Appeals) or the Commissioner (Appeals) hearing the appeal
The appellant, in person or through an authorised representative
The Assessing Officer against whose order the appeal is preferred, in person or through a representative
An Assessing Officer directed to make further inquiry and report the result
The Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner, to whom the order is communicated
The figures, and what each one turns on
Read the condition in the same row. A figure quoted without it is a wrong answer with a citation attached.
What
Figure
The condition on it
Where
Period within which the appeal may be heard and decided
One year from the end of the financial year in which the appeal is filed or transferred under section 356
Expressed as "where it is possible, may" — it is a direction of best effort, not a mandatory limitation on the power to decide
Sub-section (5)
What this means in practice
The one-year period in sub-section (5) is not a deadline whose breach invalidates anything: the words are that the appellate authority "where it is possible, may hear and decide" within that period, and it runs from the end of the financial year of filing or of transfer under section 356, not from the date of filing. The right to be heard belongs to the Assessing Officer as much as to the appellant, so a first appeal is a two-sided hearing. A new ground can be argued under clause (3)(c), but only on the appellate authority's satisfaction that the omission from the form of appeal was not wilful or unreasonable — the burden of explaining the omission is on the appellant. Sub-section (4) is the practical protection: an order that does not state the points for determination, the decision on each and the reasons is not in the form the section requires, which is what makes it reviewable.
An example
Illustrative only, and invented for this page. The figures are chosen to show the rule biting, not taken from any real matter.
An assessee files a first appeal against an assessment order and, after filing, discovers a valuation point not taken in the grounds of appeal. At the hearing he asks the Commissioner (Appeals) to allow the additional ground, explaining that his earlier representative had overlooked it; clause (3)(c) permits it if the omission is found not to have been wilful or unreasonable. The Commissioner (Appeals) directs the Assessing Officer to make further inquiry into the valuation and report under clause (3)(b), and then passes a written order stating each point for determination, the decision and the reasons, which is communicated to the assessee and to the Principal Commissioner under sub-section (6).
Where you meet this section
You meet this as the notice of hearing fixing the day and place of your first appeal before the Joint Commissioner (Appeals) or the Commissioner (Appeals), as the remand or inquiry direction issued to the Assessing Officer during it, and as the written appellate order communicated to you at the end. It is also the provision an appellant relies on to have an additional ground admitted at the hearing.
The words themselves
allow the appellant to go into any ground of appeal not specified in the grounds of appeal, if he is satisfied that the omission of that ground from the form of appeal was not wilful or unreasonable
Section 359(3)(c), Income-tax Act, 2025.
The order of the Joint Commissioner (Appeals) or the Commissioner (Appeals) disposing of the appeal shall be in writing and shall state the points for determination, the decision thereon and the reasons for the decision.
Section 359(4), Income-tax Act, 2025.
where it is possible, may hear and decide such appeal within one year from the end of the financial year in which such appeal is filed or transferred to him under section 356
Section 359(5), Income-tax Act, 2025.
What people get wrong
Reading the one year in sub-section (5) as a binding limitation. The words are "where it is possible, may", which makes it a best-effort direction rather than a bar on deciding later.
Counting that one year from the date of filing. Sub-section (5) counts it from the end of the financial year in which the appeal is filed or transferred under section 356.
Assuming an additional ground is admitted as of right. Clause (3)(c) requires the appellate authority to be satisfied that its omission from the form of appeal was not wilful or unreasonable.
Overlooking the Assessing Officer's right of audience. Clause (2)(b) gives him the right to be heard, in person or by a representative.
Accepting an order that merely records a conclusion. Sub-section (4) requires the order to state the points for determination, the decision on them and the reasons.
Treating a further inquiry as something only the appellate authority can conduct. Clause (3)(b) also allows him to direct the Assessing Officer to make the inquiry and report the result.
What this replaced
The correspondence is the Income Tax Department’s own, from its comparison utility for the 1961 and 2025 Acts. A renumbering is the easy half; whether the words changed is the half that decides cases.
A notification is made under a power the Act gives and, within that power, is law. These too were made under the 1961 Act and are placed here by the department’s concordance.
Read this before you rely on it. Every decision below was decided under the Income-tax Act, 1961. It appears here because it is tagged to a 1961 provision that the department’s own mapping carries to section 359. That is an inference we have drawn, not a holding on the new section: where the words changed in the move, the reasoning may not survive. Treat this as the place to start looking, not as authority on the 2025 Act.
CIT v Kanpur Coal SyndicateSupreme Courttagged s.250 How wide are the first appellate authority's powers when it disposes of an appeal?
CIT v S. Chenniappa MudaliarSupreme Courttagged s.250 Can an appellate authority under the Income-tax Act throw out an appeal because the appellant did not turn up?
Jute Corporation of India Ltd v CITSupreme CourtCuts both waystagged s.250 Can you raise a ground before the CIT(A) that you never raised before the officer?
Bharat Petroleum Corporation Ltd v ITATHigh Courttagged s.250 What happens if an appeal is dismissed for want of prosecution and the recall application is filed late?
CIT v Manish Build Well P LtdHigh CourtCuts both waystagged s.250(4) The CIT(A) admitted my extra papers and deleted the addition. Can the department upset that on appeal?
CIT v Premkumar Arjundas Luthra (HUF)High CourtHelps taxpayertagged s.250 You did not appear before the CIT(A). Can the appeal simply be dismissed for non-prosecution?
High Vista Buildcon P Ltd v NFACHigh CourtHelps taxpayertagged s.250 I asked NFAC for a video hearing in my appeal and never got a link. Can that order stand?
Kulwinder Paul Singh v CBDTHigh CourtHelps taxpayertagged s.250(6A) My appeal before the Commissioner (Appeals) has been pending for years. Can I get the High Court to make him decide it?
Smt. Prabhavati S. Shah v CITHigh Courttagged s.250 If additional evidence does not fit any of the four gateways in Rule 46A, is the CIT(A) powerless to look at it?
Abdulrahiman Abdulkadar v ITOITATHelps taxpayertagged s.250 The CIT(A) refused your additional evidence, saying no Rule 46A application was filed — but you filed one.
DCIT v ACE Infracity Developers P LtdITATHelps taxpayertagged s.250(4) My lenders are NBFCs that make hundreds of loans. How much of their own affairs do I have to prove?
What the CIT(A)'s enhancement notice has to saytagged s.250 The CIT(A) has issued an enhancement notice that says almost nothing. Must it set out what he proposes to add and how it is worked out?
What this page does not tell you. It does not reproduce the section. Everything above was written from the section’s own text as the Income Tax Department publishes it — the text is here, and nothing here is advice on your facts. Where a figure matters, read the sub-section it comes from.
