In short
An appeal filed today against an order relating to an earlier year is governed by the Income-tax Act, 1961, not the Income-tax Act, 2025. Section 536(2)(c) of the 2025 Act provides that the repealed Act continues to apply to any proceeding pending on commencement, and to proceedings initiated on or after 1 April 2026 — expressly including notices, assessment, reassessment, recomputation, rectification, penalty, reference, revision and appeals — in respect of any tax year beginning before 1 April 2026, and that such proceedings are carried out under the procedure of the repealed Act. Since a tax year is the financial year, the 1961 Act governs everything up to and including the year beginning 1 April 2025. The limitation periods and fees are in any event unchanged under the new Act.
The Income-tax Act, 2025 came into force on 1 April 2026. Since then a familiar question has been asked in every consultation: my assessment is for an earlier year, the order has just come, and I am filing an appeal now — which Act do I plead?
A surprising amount of published commentary gives the wrong answer. The reasoning runs that because the appeal is filed after commencement, the new Act governs it. That reasoning is intuitive and it is wrong.
What section 536(2)(c) actually says
The repeal provision is section 536. Sub-section (1) repeals the 1961 Act. Sub-section (2) then opens with the words “Irrespective of the repeal of the Income-tax Act, 1961 … and subject to sub-section (3)” and proceeds to save a series of positions. Sub-section (3) is the reading rule: a reference to a tax year commencing on 1 April 2025 or earlier is read as a reference to the corresponding previous year under the 1961 Act — which is why the year beginning 1 April 2025, assessment year 2026-27, is the last year on the old Act. Clause (c) of sub-section (2) is the one that matters here:
the provisions of the repealed Income-tax Act shall continue to apply to any proceeding pending on the date of commencement of this Act and to any proceedings initiated on or after the 1st April, 2026 (including notices, assessment, reassessment, recomputation, rectification, penalty, reference, revision and appeals) in respect of any tax year beginning before the 1st April, 2026 and such proceedings shall be carried out as per the procedure specified in the repealed Income-tax Act;
Three things in that text do the work.
“and to any proceedings initiated on or after the 1st April, 2026”. This is the limb the mistaken reading overlooks. The saving is not confined to proceedings already pending when the Act commenced. It expressly reaches forward to proceedings begun afterwards.
“including … appeals”. The draftsman did not leave this to inference. Notices, assessment, reassessment, recomputation, rectification, penalty, reference, revision and appeals are all named. That list is, in substance, exhaustive of what a litigation practice does.
“as per the procedure specified in the repealed Income-tax Act”. Not merely the substantive law. The procedure too.
Working out the cut-off
The saving is keyed to a tax year beginning before the 1st April, 2026. Under the 2025 Act a tax year is the financial year. So:
| Tax year | Assessment year, old style | Act governing appeals |
|---|---|---|
| Beginning 1 April 2024 | AY 2025-26 | Income-tax Act, 1961 |
| Beginning 1 April 2025 | AY 2026-27 | Income-tax Act, 1961 |
| Beginning 1 April 2026 | tax year 2026-27 | Income-tax Act, 2025 |
The practical consequence is that the 1961 Act will drive appellate work for several years yet. Assessments for the year beginning 1 April 2025 have barely started; appeals from them, and from every year before, run on the old Act and the old numbering.
What this means in a memorandum of appeal
You continue to plead the provisions you have always pleaded. Section 246A for the appealable order. Section 249 for form and limitation. Section 250(5) where a ground was omitted and has to be admitted. Section 253 for the Tribunal, section 260A for the High Court. In a search matter, section 153A or 153C, section 153D for the approval, section 271AAB for the penalty — none of which was re-enacted in the new Act, whose block-assessment chapter succeeds the different regime that displaced them for searches from 1 September 2024.
It would be a mistake, and an avoidable one, to redraft grounds into the new numbering because the filing date happens to fall after April 2026.
What has changed, and what has not
For matters that do fall under the new Act, the reassuring news is that the appellate machinery was carried across substantially intact. The Department’s own position is that the limitation periods are unchanged and the powers of the appellate authorities materially so.
| 1961 Act | 2025 Act | Period | |
|---|---|---|---|
| Appeal to CIT(A) | s.249 | s.358 | 30 days, unchanged |
| Appeal to the Tribunal | s.253 | s.362 | two months from month-end, unchanged |
| Appeal to the High Court | s.260A | s.365 | 120 days from receipt, unchanged |
| Additional grounds | s.250(5) | s.359(3)(c) | discretion, unchanged |
| Rectification | s.154 | s.287 | 4 years, unchanged |
| Revision at assessee’s instance | s.264 | s.378 | 1 year, unchanged |
The fee slabs are carried over identically as well — ₹250, ₹500 and ₹1,000 before the Commissioner (Appeals); ₹500, ₹1,500 and one per cent of assessed total income capped at ₹10,000 before the Tribunal.
A caution on the mapping, though. Many concordance tables published online were prepared from the February 2025 Bill or the Select Committee draft rather than the Act as enacted and as amended by the Finance Act 2026. Most section numbers survived unchanged, but headings, sub-section numbering and several rates did not — section 280’s heading and its clause (1)(c), and the rate in section 195, among them. CBDT publishes its own mapping utility, and it should be the first place you look.
Two points that are not settled
Which form. Section 536(2)(c) preserves the procedure of the repealed Act, which points to Form 35 and Form 36. But the Income-tax Rules, 1962 have been replaced by the Income-tax Rules, 2026, which prescribe Form 99 for an appeal to the Commissioner (Appeals) and Form 115 for the Tribunal — while section 536(2)(j) keeps rules and forms made under the repealed Act in force so far as they are not inconsistent with the new one. No CBDT clarification resolving that tension could be found. Until there is one, the only safe course is to see what the e-filing portal will actually accept for the year in question, and not to assume.
Expired limitation is not revived. Section 536(2)(k) provides that where the period for an application, appeal, reference or revision had expired on or before 1 April 2026, nothing in the new Act enables it to be made merely because a longer period is now prescribed. The saving preserves the position as it stood; it does not reopen what had closed.
The short version
If the year in dispute began before 1 April 2026, nothing about your appeal has changed. Same Act, same sections, same forms so far as the portal allows, same periods. The new numbering matters for the future, and it is worth learning, but it is not what you plead this year.
The error to guard against is the opposite one — treating a filing date after April 2026 as though it carried the matter into the new Act. It does not, and section 536(2)(c) says so in terms.
This note is general commentary on the law as at 17 August 2026 and is not advice on any matter. The position in a particular case depends on its own facts.