Section 363 — Orders of Appellate Tribunal. Successor to s.254 of the 1961 Act.
Section 363 is in Chapter XVIII — Appeals Revisions and Alternate Dispute Resolutions, which runs from section 356 to section 389.
Sub-section (1) empowers the Appellate Tribunal, after giving both parties an opportunity of being heard, to pass such orders on the appeal as it thinks fit. Sub-section (2) allows it to amend an order for rectification of a 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. Sub-section (3) bars any such amendment that enhances an assessment, reduces a refund or otherwise increases the assessee's liability unless he has been allowed a reasonable opportunity of being heard. Sub-section (4) requires an application by the assessee under sub-section (2) to be accompanied by a fee of Rs. 50. Sub-section (5) asks the Tribunal, where possible, to hear and decide every appeal within four years from the end of the financial year in which it was filed under section 362(1) or (2).
Sub-sections (6) to (8) govern stay. On the merits of an application by the assessee the Tribunal may stay proceedings relating to an appeal under section 362(1) for a period not exceeding one hundred and eighty days, on condition that the assessee deposits not less than 20% of the tax, interest, fee, penalty or other sum payable, or furnishes security of an equal amount; the Tribunal is to dispose of the appeal within that period. Where it is not disposed of within that stay period, no extension may be granted unless the assessee applies and has complied with the same condition and the Tribunal is satisfied that the delay is not attributable to him — and even then the original and extended stay together may not exceed three hundred and sixty-five days. Sub-section (8) vacates the stay if the appeal is not disposed of within the period allowed under sub-section (6) or (7), even where the delay is not attributable to the assessee.
Sub-section (9) leaves the cost of an appeal to the Tribunal's discretion. Sub-section (10), as substituted by Act No. 4 of 2026 with effect from 1 April 2026, requires the Tribunal to send a copy of any order passed under this section to the assessee and also to send a copy to the jurisdictional Principal Commissioner or Commissioner electronically on the designated portal designed by the Director General or Principal Director General, and provides that the Act's time limits for any appeal, reference, revision or otherwise apply accordingly. Sub-section (11) makes the Tribunal's orders on appeal final, save as provided in section 365.
The section fixes what the Tribunal may do and how long its orders may hold up collection. The stay regime is the heart of it: relief is available, but only against a real deposit or security, only for a fixed period, and with an absolute outer limit, so a stay cannot become an indefinite bar to recovery. The substituted sub-section (10) ties the running of every later limitation period to electronic service of the order on the designated portal rather than to a paper copy reaching an office.
| What | Figure | The condition on it | Where |
|---|---|---|---|
| Time limit for rectification of a mistake apparent from record | Six months | From the end of the month in which the order was passed; the mistake must be brought to the Tribunal's notice by the assessee or the Assessing Officer | Sub-section (2) |
| Fee on a rectification application by the assessee | Rs. 50 | Must accompany the application under sub-section (2) | Sub-section (4) |
| Indicative time for deciding an appeal | Four years | From the end of the financial year in which the appeal is filed under section 362(1) or (2), and only where it is possible — the sub-section says "may", not "shall" | Sub-section (5) |
| Deposit or security required for a stay | Not less than 20% of the amount payable | Of the tax, interest, fee, penalty or any other sum payable under the Act; security of an equal amount is the alternative | Sub-section (6)(a) and (b) |
| Maximum first period of stay | One hundred and eighty days | From the date of the stay order, the appeal to be disposed of within it | Sub-section (6) |
| Absolute outer limit of stay | Three hundred and sixty-five days | Aggregate of the stay originally allowed and any extension; no extension at all unless the assessee applies, has complied with the deposit or security condition, and the delay is not attributable to him | Sub-section (7) |
The stay rules are unforgiving in a way the first reading hides. Sub-section (7) allows an extension only where the assessee applies, has met the deposit or security condition, and the Tribunal is satisfied that the delay is not his fault — and sub-section (8) then vacates the stay the moment the allowed period runs out even if the delay was not attributable to him, so a blameless assessee can still lose his stay at 365 days. The 20% is a floor, not a fixed figure, and it is computed on tax, interest, fee, penalty and any other sum payable, not on tax alone. Sub-section (5) is aspirational — the Tribunal "may" decide within four years where possible — so nothing follows from its being exceeded. Rectification is confined to a mistake apparent from record within six months of the end of the month of the order, and where the amendment would increase the assessee's liability, sub-section (3) requires a hearing first. Since 1 April 2026 the Department's copy goes electronically to the jurisdictional Principal Commissioner or Commissioner on the designated portal, and sub-section (10)(b) makes the Act's limitation periods for any further appeal, reference or revision run accordingly.
A company appeals against a demand of Rs. 10 crore including interest and penalty, and applies for a stay. The Tribunal may grant one only if the company deposits at least Rs. 2 crore, being 20% of the sum payable, or furnishes security of that amount, and the stay cannot exceed 180 days. If the appeal is still undecided at 180 days through no fault of the company, it must apply again and satisfy the Tribunal of that, and even then the total stay stops at 365 days — after which sub-section (8) vacates it automatically.
An assessee meets this section in the Tribunal's order disposing of his appeal, in a stay order that names the deposit he must make, and in a rectification application filed with the Rs. 50 fee; the Department meets sub-section (10) as the electronic copy landing on the designated portal, from which its own time to move further runs.
deposits not less than 20% of the amount of tax, interest, fee, penalty or any other sum payable under this Act
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
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.
See the full 1961 to 2025 concordance.
See the notifications index.