Orders of Appellate Tribunal
Section 254 of the Income-tax Act, 1961 deals with orders of Appellate Tribunal. The Appellate Tribunal may, after giving both the par-ties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit. The Act came into force on 01 Apr 1962. Repealed by the Income-tax Act, 2025 with effect from 1 April 2026, but conduct before that date is still charged, tried and appealed under it.
(1) The Appellate Tribunal may, after giving both the par-ties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit. (1A) [***] (2) The Appellate Tribunal may, at any time within six months from the end of the month in which the order was passed, with a view to rectifying any mistake apparent from the record, amend any order passed by it under sub-section (1), and shall make such amendment if the mistake is brought to its notice by the assessee or the Assessing Officer :
Provided that an amendment which has the effect of enhancing an assessment or reducing a refund or otherwise increasing the liability of the assessee, shall not be made under this sub-section unless the Appellate Tribunal has given notice to the assessee of its intention to do so and has allowed the assessee a reasonable opportunity of being heard :
Provided further that any application filed by the assessee in this sub-section on or after the 1st day of October, 1998, shall be accompanied by a fee of fifty rupees. (2A) In every appeal, the Appellate Tribunal, where it is possi-ble, may hear and decide such appeal within a period of four years from the end of the financial year in which such appeal is filed under sub-section (1) or sub-section (2) of section 253 :
Provided that the Appellate Tribunal may, after considering the merits of the application made by the assessee, pass an order of stay in any proceedings relating to an appeal filed under sub-section (1) of section 253, for a period not exceeding one hundred and eighty days from the date of such order subject to the condition that the assessee deposits not less than twenty per cent of the amount of tax, interest, fee, penalty, or any other sum payable under the provisions of this Act, or furnishes security of equal amount in respect thereof and the Appellate Tribunal shall dispose of the appeal within the said period of stay specified in that order:
Provided further that no extension of stay shall be granted by the Appellate Tribunal, where such appeal is not so disposed of within the said period of stay as specified in the order of stay, unless the assessee makes an application and has complied with the condition referred to in the first proviso and the Appellate Tribunal is satisfied that the delay in disposing of the appeal is not attributable to the assessee, so however, that 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 and the Appellate Tribunal shall dispose of the appeal within the period or periods of stay so extended or allowed:
Provided also that if such appeal is not so disposed of within the period allowed under the first proviso or the period or periods extended or allowed under the second proviso, which shall not, in any case, exceed three hundred and sixty-five days, the order of stay shall stand vacated after the expiry of such period or periods, even if the delay in disposing of the appeal is not attributable to the assessee. (2B) The cost of any appeal to the Appellate Tribunal shall be at the discretion of that Tribunal.
(3) The Appellate Tribunal shall send a copy of any orders passed under this section to the assessee and to the Principal Commissioner or Commissioner. [(3A) For the purposes of sub-section (3), where any order is passed under this section on or after the 1st day of October, 2026, the Appellate Tribunal shall send a copy of the order to the jurisdictional Principal Commissioner or Commissioner electronically on the designated portal designed by the Director General or Principal Director General and the provisions relating to time limits under this Act for any appeal, reference or revision shall apply accordingly.] (4) Save as provided in section 256 or section 260A, orders passed by the Appellate Tribunal on appeal shall be final.
Section 254, The Income-tax Act, 1961 (Act 43 of 1961).
Now in the Income-tax Act
INCOME-TAX-ACT-2025 363 Orders of Appellate Tribunal Official correspondence
Measured by comparing the text of the two provisions, not taken from an official correspondence table — there is no machine-readable one. See both texts side by side before relying on it.
Both regimes are live. The repealed enactment still governs what happened while it was in force. We never redirect one to the other.
Cross-references
Extracted from the operative text of the enactments themselves. Every destination below exists in our corpus.
This section refers to
Referred to by 28
- Finance Act s. 39 Amendment of section 254
- Finance Act s. 67 Amendment of section 254
- Finance Act s. 53 Amendment of section 254
- Finance Act s. 86 Amendment of section 254
- Finance Act s. 68 Amendment of section 254
- Finance Act s. 84 Amendment of section 254
- Finance Act s. 75 Amendment of section 254
- Finance Act s. 50 Amendment of section 254
- Finance Act s. 96 Amendment of section 254
- Finance Act s. 96 Amendment of section 254
- Finance Act s. 99 Amendment of Section 254
- Finance Act s. 19 Amendment of section 254
and 16 more
Related judgements & precedents
These are some judgments that construed this section, and hold precedence value. They hold authority on how to read, interpret and use this section.
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K C Builders vs The Asstt Commnr of Income Tax
Court's Decision & Legal Precedent
When the Income Tax Appellate Tribunal, which is the final court on facts, finds that there is no concealment of income and cancels penalties levied under Section 271(1)(c) of the Income Tax Act, the criminal prosecution under Section 276C of the Act must be automatically quashed. The finding of the Appellate Tribunal is conclusive and binding on the criminal court. Since the basis for criminal prosecution (concealment of income) has been negated by the Tribunal's final order, no offence survives under the Income Tax Act, and the criminal proceedings cannot be sustained. The Assessing Officer has no alternative except to cancel the penalty following the Tribunal's order, and the criminal court cannot proceed with prosecution after such cancellation.
On this section: Orders of Appellate Tribunal; cited as key provision establishing that Tribunal order supersedes Assessing Officer's order and is conclusive on facts
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Prakash Dhondiram Koli v. Income Tax Appellate Tribunal Pune Bench
Court's Decision & Legal Precedent
A subsequent Supreme Court ruling (Checkmate) rendered after the ITAT’s original s.254(1) order cannot supply a “mistake apparent from the record” for s.254(2) rectification; Infantry Security governs; original ITAT order restored.
On this section: Teaches scope and limits of ITAT rectification under s.254(2) — subsequent SC overruling is not a mistake apparent from the record.
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Infantry Security and Facilities v. The Income Tax Officer Ward 4(5)
Court's Decision & Legal Precedent
Tribunal’s s.254(2) rectification jurisdiction is limited to mistake apparent from the record and cannot be used to reverse an order merely because a later Supreme Court ruling (Checkmate) changed the law; subsequent change in law is not a ground for review/rectification, and applications beyond the six-month limit are barred.
On this section: Teaches scope and limits of ITAT rectification under s.254(2) — subsequent SC overruling is not a mistake apparent from the record.
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Infantry Security and Facilities v. The Income Tax Officer Ward 4(5)
Court's Decision & Legal Precedent
Tribunal’s s.254(2) rectification jurisdiction is limited to mistake apparent from the record and cannot be used to reverse an order merely because a later Supreme Court ruling (Checkmate) changed the law; subsequent change in law is not a ground for review/rectification, and applications beyond the six-month limit are barred.
On this section: Teaches scope and limits of ITAT rectification under s.254(2) — subsequent SC overruling is not a mistake apparent from the record.
-
Infantry Security and Facilities v. The Income Tax Officer Ward 4(5)
Court's Decision & Legal Precedent
Tribunal’s s.254(2) rectification jurisdiction is limited to mistake apparent from the record and cannot be used to reverse an order merely because a later Supreme Court ruling (Checkmate) changed the law; subsequent change in law is not a ground for review/rectification, and applications beyond the six-month limit are barred.
On this section: Teaches scope and limits of ITAT rectification under s.254(2) — subsequent SC overruling is not a mistake apparent from the record.
The holding above is the ratio decidendi as extracted from the judgment by eCourts India, reproduced unaltered — it is a rendering of the court's reasoning, not a substitute for its words. Read the order itself before relying on it.
Questions about Section 254
What have the courts held on Section 254 of the Income-tax Act?
K C Builders vs The Asstt Commnr of Income Tax (28 Jan 2004) is the leading judgment on this section among those set out below: Orders of Appellate Tribunal; cited as key provision establishing that Tribunal order supersedes Assessing Officer's order and is conclusive on facts. Another 4 judgments on this section are set out below, 1 of them from the Supreme Court. They run from 2004 to 2025.
How do I find court cases under Section 254 of the Income-tax Act?
In judgments and charge sheets this section is written several ways, and each form finds a different set of orders. These search the full text of every order eCourtsIndia holds, best matches first: Income Tax Act 254, section 254 Income Tax Act, section 254 of the Income-tax Act. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome. 5 reported judgments on this section are set out on this page, beginning with K C Builders vs The Asstt Commnr of Income Tax (28 Jan 2004).
What should I read with Section 254 of the Income-tax Act, and has it changed?
Its own text turns on section 253 (Appeals to the Appellate Tribunal), section 256 (Statement of case to the High Court), section 260A (Appeal to High Court), so none of them can safely be read on its own. 28 other provisions in this corpus refer back to it. For anything done on or after 1 April 2026 the provision to read is Income-tax Act, 2025, section 363 (Orders of Appellate Tribunal), which replaced it; conduct before that date is still charged, tried and appealed under this section.
When did Section 254 of the Income-tax Act come into force?
Section 254 of the Income-tax Act, cited as Income Tax Act 254, came into force on 01 Apr 1962, having been enacted on 13 Sep 1961. It is no longer in force.
Other sections of this Act
- 10. Incomes not included in total income30885 words
- 2. Definitions11419 words
- 80HHF. Deduction in respect of profits and gains from export or transfer of film software, etc7148 words
- 80-IB. Deduction in respect of profits and gains from certain industrial undertakings other than infrastructure development undertakings5474 words
- 155. Other amendments5451 words
- 139. Return of income5400 words
Source and method. Compiled from the enactments of Parliament and of the State legislatures as published on India Code, and republished together with commentary and other original matter under section 52(1)(q)(ii) of the Copyright Act, 1957. Structured, cross-referenced and maintained by eCourtsIndia. Recovered from the consolidated text published by the Income Tax Department, as amended by the Finance Act, 2026. India Code holds no record of this Act in any form. This page is not a substitute for legal advice.