Sections 251 and 252 of Income Tax Act, 1961: Appellate Powers and Income Tax Appellate Tribunal

Section 251 defines the powers available while disposing of a first appeal under the Income Tax Act, 1961. Section 252 provides for constitution of the Income Tax Appellate Tribunal, commonly known as the ITAT, and specifies the statutory framework for its Judicial and Accountant Members.

Law period: This page covers the Income Tax Act position applicable before the Bharatiya Sakshya Adhiniyam, 2023 came into force on 1 July 2024. It includes the Joint Commissioner (Appeals) framework introduced with effect from 1 April 2023. The Bharatiya Sakshya Adhiniyam concerns evidence law and does not itself amend Sections 251 or 252.

Contents

Section 251 - powers in first appeal
Enhancement and opportunity of hearing
Section 252 - Appellate Tribunal
Judicial and Accountant Members

Section 251 - Powers of Joint Commissioner (Appeals) or Commissioner (Appeals)

Section 251 is part of Chapter XX dealing with appeals and revision. For the period covered by this article, the provision recognises powers of the Joint Commissioner (Appeals) as well as the Commissioner (Appeals).

Powers of Commissioner (Appeals)

In an appeal against an assessment order, the Commissioner (Appeals) may confirm, reduce, enhance or annul the assessment.
Where proceedings before the Settlement Commission abate under Section 245HA, the Commissioner (Appeals) may consider the material, information, inquiry results and evidence from those proceedings together with other material brought on record and may confirm, reduce, enhance or annul the assessment.
In an appeal against a penalty order, the Commissioner (Appeals) may confirm or cancel the order, or vary it so as to enhance or reduce the penalty.
In another appeal falling within jurisdiction, the Commissioner (Appeals) may pass such order in the appeal as considered appropriate within the statutory framework.

Powers of Joint Commissioner (Appeals)

Section 251(1A), inserted with effect from 1 April 2023, authorises the Joint Commissioner (Appeals), while disposing of an appeal, to confirm, reduce, enhance or annul an assessment; confirm, cancel, enhance or reduce a penalty; and, in other cases, pass such order in the appeal as considered appropriate under the Act.

Enhancement of assessment or penalty and reduction of refund

A significant safeguard appears in Section 251(2). The Joint Commissioner (Appeals) or Commissioner (Appeals), as applicable, cannot enhance an assessment or penalty or reduce the amount of a refund unless the appellant has been given a reasonable opportunity to show cause against the proposed enhancement or reduction.

The Explanation to Section 251 also gives the appellate authority power to consider and decide a matter arising out of the proceedings in which the appealed order was passed even though the appellant did not raise that matter before the appellate authority. This makes the first appellate jurisdiction wider than a mechanical review of only the grounds drafted by the appellant, subject to statutory procedural safeguards.

Section 252 - Income Tax Appellate Tribunal

Section 252 requires the Central Government to constitute an Appellate Tribunal consisting of such number of Judicial Members and Accountant Members as it considers fit to exercise the powers and discharge the functions conferred on the Tribunal by the Income Tax Act.

ITAT: The Income Tax Appellate Tribunal is the appellate tribunal constituted under Section 252. Appeals to the Tribunal and orders of the Tribunal are principally dealt with in Sections 253 and 254.

Qualifications of Judicial and Accountant Members

Member	Section 252 qualification framework
Judicial Member	A person satisfying the statutory requirement concerning at least ten years in judicial office, qualifying Indian Legal Service experience, or at least ten years as an advocate, together with the statutory rules for computing qualifying periods.
Accountant Member	A person satisfying the statutory requirement concerning at least ten years in accountancy practice as specified in the provision, or qualifying service in the Indian Income-tax Service, Group A, including the prescribed senior post and period.

Section 252 also contains provisions concerning appointment of the President and Vice-Presidents of the Tribunal and delegation by the President to a Vice-President. The detailed service framework should be read with other applicable statutory provisions governing Tribunal appointments and service conditions.

Related appellate provisions

For appeals to the ITAT and its orders, see Sections 253 and 254. For procedure of the Tribunal, see Sections 255 and 256.

Official references

For the authoritative statutory text applicable to the relevant year, refer to the Income Tax Department - Section 251 and Income Tax Department - Section 252. For electronic tax services, use the Income Tax e-Filing Portal.

Note: The applicable version of an income-tax provision depends on the relevant assessment year, order date and effective date of amendments. Verify the statutory text for the period involved before relying on it in a proceeding.