Sections 265, 266 and 267 of Income Tax Act 1961

Sections 265 to 267 form part of Chapter XX dealing with appeals and revision. They address payment of tax while specified higher-court proceedings are pending, execution of Supreme Court cost orders, and consequential amendment of assessments following an appeal.

Scope: This article explains Sections 265, 266 and 267 of the Income-tax Act, 1961. These provisions concern income-tax appellate and consequential assessment procedure and do not depend on the Bharatiya Sakshya Adhiniyam, 2023.

Section 265 - Tax to be paid notwithstanding reference, etc.

Meaning: Section 265 provides that making a reference to the High Court or Supreme Court, or preferring an appeal to the Supreme Court, does not by itself displace the tax payable under the assessment.

Statutory provision: Notwithstanding that a reference has been made to the High Court or the Supreme Court or an appeal has been preferred to the Supreme Court, tax shall be payable in accordance with the assessment made in the case.

Accordingly, the provision states the continuing effect of the assessment for payment of tax despite the specified reference or appeal.

Section 266 - Execution for costs awarded by Supreme Court

Meaning: Section 266 provides the mechanism for execution of an order relating to costs awarded by the Supreme Court in an income-tax matter.

Statutory provision: The High Court may, on a petition seeking execution of the Supreme Court order in respect of costs awarded by it, transmit that order for execution to a court subordinate to the High Court.

Section 267 - Amendment of assessment on appeal

Meaning: Section 267 deals with consequential changes to the assessment of members of a body of individuals or association of persons where the assessment of that body or association changes, or a new assessment is ordered, as a result of an appeal.

Statutory provision: Where, as a result of an appeal under Section 246, Section 246A or Section 253, a change is made in the assessment of a body of individuals or an association of persons, or a new assessment is ordered, the Joint Commissioner (Appeals), Commissioner (Appeals) or Appellate Tribunal, as the case may be, shall pass an order authorising the Assessing Officer to amend or make a fresh assessment on any member of the body or association.

The reference to Joint Commissioner (Appeals) reflects the amendment inserted with effect from 1 April 2023. Section 267 therefore links the appellate result concerning the body or association with necessary consequential assessment action concerning its members.

Related provisions referred to in Section 267

Section 246 concerns specified appealable orders before the Joint Commissioner (Appeals). Section 246A identifies specified appealable orders before the Commissioner (Appeals). Section 253 governs appeals to the Appellate Tribunal. These provisions determine the appellate routes whose outcome may trigger Section 267.

Official reference

For authoritative statutory text and amendments, refer to the Income Tax Department - Income-tax Act.