Sections 268 and 268A of Income Tax Act 1961

Section 268 explains what time is excluded while computing limitation for an appeal or application. Section 268A empowers the Central Board of Direct Taxes to regulate departmental appeals and reference applications by prescribing monetary limits.

Current-law context: The Income-tax Act, 1961 was repealed with effect from 1 April 2026 by the Income Tax Act, 2025. However, proceedings, appeals and other matters relating to tax years beginning before 1 April 2026 continue to be governed by the 1961 Act under the transitional provisions. Accordingly, Sections 268 and 268A remain relevant to such matters.

Section 268 - Exclusion of time taken for copy

Definition and purpose: Section 268 is a limitation provision. It identifies periods that must be left out when calculating the prescribed time for filing an appeal or application under the Income-tax Act, 1961.

Section 268: In computing the period of limitation prescribed for an appeal or an application under the Act, the day on which the order complained of was served is excluded. Where the assessee was not furnished a copy of the order when notice of that order was served, the time requisite for obtaining a copy of the order is also excluded.

The provision therefore protects the statutory filing period from being reduced by the specified service day and, where applicable, the time genuinely required to obtain the order copy.

Section 268A - Filing of appeal or application for reference by income-tax authority

Definition and purpose: Section 268A authorises the CBDT to issue orders, instructions or directions prescribing monetary limits to regulate appeals or applications for reference filed by income-tax authorities under Chapter XX.

Sub-section (1) - CBDT monetary limits

The Board may from time to time issue orders, instructions or directions to income-tax authorities fixing monetary limits considered appropriate for regulating the filing of appeals or applications for reference under Chapter XX.

Sub-section (2) - Non-filing does not bar another appeal

If an income-tax authority does not file an appeal or reference application on an issue because of a direction issued under sub-section (1), that non-filing does not prevent the authority from filing on the same issue:

  1. for the same assessee in another assessment year; or
  2. for another assessee in the same or another assessment year.

Sub-section (3) - No inference of acquiescence

An assessee cannot contend that the Department accepted or acquiesced in a disputed decision merely because the income-tax authority did not file an appeal or reference application pursuant to a monetary-limit order, instruction or direction.

Sub-section (4) - Tribunal or Court to consider CBDT directions

The Appellate Tribunal or Court hearing the matter must have regard to the relevant orders, instructions or directions under sub-section (1), together with the circumstances in which an appeal or reference application was or was not filed.

Sub-section (5) - Earlier monetary-limit directions

CBDT orders, instructions or directions fixing monetary limits for departmental appeals or reference applications are deemed to have been issued under sub-section (1), and sub-sections (2), (3) and (4) apply accordingly.

Departmental appeal policy under Section 268A

Section 268A is the statutory basis for CBDT litigation-management directions prescribing monetary thresholds and related conditions for departmental appeals. The applicable circular or instruction should be checked for the relevant date, forum, tax effect and any specified exceptions before determining whether a departmental appeal is governed by a monetary limit.

Official sources

Income Tax Department - Section 268
Income Tax Department - Section 268A
Income Tax Department - Appeals and Revisions