Sections 261 and 262 of Income Tax Act, 1961: Appeal to Supreme Court and Hearing Procedure
Section 261 deals with an appeal to the Supreme Court from a qualifying judgment of the High Court where the High Court certifies the case to be fit for appeal. Section 262 governs the procedure for hearing such an appeal, the Supreme Court's discretion regarding costs, and the manner in which effect is given to a Supreme Court order varying or reversing the High Court judgment.
Section 261 - Appeal to Supreme Court
Section 261 provides for an appeal to the Supreme Court from a judgment of the High Court in the categories covered by the section, provided the High Court certifies the case to be a fit one for appeal to the Supreme Court.
The provision covers the older reference route connected with Section 256 and the later High Court appeal route concerning an order of the Appellate Tribunal under Section 254.
What is the High Court certificate under Section 261?
The statutory right described in Section 261 depends upon the High Court certifying that the case is fit for appeal to the Supreme Court. The certificate is therefore an express statutory condition for an appeal under this section.
Reference cases and High Court appeals
| Route | Relevant position under Section 261 |
|---|---|
| Historical reference | A High Court judgment on a reference under Section 256 against an order under Section 254 made before 1 October 1998 falls within the statutory framework described in Section 261. |
| High Court appeal | The provision also addresses a High Court judgment in an appeal concerning an order passed under Section 254 on or after 1 October 1998. |
| Certificate | For an appeal under Section 261, the High Court must certify the case as fit for appeal to the Supreme Court. |
The High Court appeal mechanism for post-30 September 1998 ITAT orders is set out in Section 260A, subject to its requirement that the case involve a substantial question of law.
Section 262 - Hearing before Supreme Court
Section 262 lays down the procedural framework for an appeal under Section 261. Under Section 262(1), the provisions of the Code of Civil Procedure, 1908 relating to appeals to the Supreme Court apply, so far as may be, in the same manner as they apply to appeals from decrees of a High Court.
The proviso to Section 262(1) makes clear that the section does not affect Section 260(1) or Section 265 of the Income Tax Act.
Costs under Section 262(2)
Section 262(2) provides that the costs of the appeal are in the discretion of the Supreme Court. The provision therefore leaves the question of costs to the Court in the particular appeal.
Effect where the High Court judgment is varied or reversed
Under Section 262(3), where the Supreme Court varies or reverses the judgment of the High Court, effect must be given to the Supreme Court's order in the manner provided in Section 260 for giving effect to a judgment of the High Court.
Sections 261 and 262 at a glance
| Provision | Subject | Key rule |
|---|---|---|
| Section 261 | Appeal to Supreme Court | Provides the statutory appeal from the specified High Court judgment where the High Court certifies the case as fit for appeal to the Supreme Court. |
| Section 262(1) | Procedure | CPC provisions relating to Supreme Court appeals apply so far as may be, subject to the statutory proviso. |
| Section 262(2) | Costs | Costs are in the discretion of the Supreme Court. |
| Section 262(3) | Implementation | If the High Court judgment is varied or reversed, effect is given to the Supreme Court order in the manner provided in Section 260. |
Related Income Tax Act provisions
Sections 255 and 256 cover ITAT procedure and the historical statement-of-case reference mechanism. Sections 259 and 260 govern the High Court Bench and decision on a stated case. Sections 260A and 260B govern appeal to the High Court and the two-Judge Bench procedure.
Official references
For authoritative statutory and institutional material, refer to the Income Tax Department, Income Tax e-Filing Portal, Income Tax Appellate Tribunal, Supreme Court of India and India Code.