Section 262 of the Income-tax Act, 1961: Hearing Before the Supreme Court
Law update: The Income-tax Act, 2025 came into force on 1 April 2026. Its Section 368 corresponds to Section 262 of the Income-tax Act, 1961. The 1961 provision remains relevant to proceedings governed by the earlier law, subject to the repeal and savings provisions of the 2025 Act.
Section 262 of the Income-tax Act, 1961 sets out the procedural framework for hearing income-tax appeals before the Supreme Court, the Court's discretion over appeal costs, and the consequences when it varies or reverses a High Court judgment. It should be read together with Section 261, which deals with appeals to the Supreme Court.
Text of Section 262 - Hearing before Supreme Court
Sub-section (1). The provisions of the Code of Civil Procedure, 1908 (5 of 1908), relating to appeals to the Supreme Court shall, so far as may be, apply in the case of appeals under section 261 as they apply in the case of appeals from decrees of a High Court:
Proviso. Provided that nothing in this section shall be deemed to affect the provisions of sub-section (1) of section 260 or section 265.
Sub-section (2). The costs of the appeal shall be in the discretion of the Supreme Court.
Sub-section (3). Where the judgment of the High Court is varied or reversed in the appeal, effect shall be given to the order of the Supreme Court in the manner provided in section 260 in the case of a judgment of the High Court.
Official source: Income Tax Department - Section 262.
Explanation of Section 262
1. Applicable procedural law - Section 262(1)
Rules in the Code of Civil Procedure, 1908 governing appeals to the Supreme Court apply, so far as practicable, to appeals under Section 261. The expression so far as may be means that those procedural provisions apply to the extent appropriate to an income-tax appeal. The proviso preserves Section 260(1), concerning disposal of a reference following a High Court decision, and Section 265, concerning payment of tax notwithstanding a reference or appeal.
2. Costs of appeal - Section 262(2)
The Supreme Court decides how the costs of an appeal are to be borne. Costs are not automatically awarded to either party merely because that party succeeds.
3. Giving effect to Supreme Court judgment - Section 262(3)
If the Supreme Court changes or reverses the High Court's judgment, the resulting order is implemented through the mechanism specified in Section 260 for giving effect to the High Court's judgment.
Related provisions under the Income-tax Act, 1961
- Section 261: Appeal to the Supreme Court in a case certified by the High Court as fit for appeal.
- Section 260: Decision of the High Court or Supreme Court on a case stated and consequential action.
- Section 265: Tax remains payable according to the assessment notwithstanding a reference or appeal, subject to any applicable stay or other order.
- Code of Civil Procedure, 1908: Procedural provisions relating to appeals to the Supreme Court, where applicable.
Corresponding provision under the Income-tax Act, 2025
Section 368 - Hearing before Supreme Court is the corresponding provision under the Income-tax Act, 2025. It applies procedural provisions of the Code of Civil Procedure, 1908 to appeals under Section 367, leaves appeal costs to the Supreme Court's discretion, and provides that a judgment varied or reversed by the Supreme Court is given effect in the manner provided by Section 365(10).
Unlike the text of Section 262 of the 1961 Act, Section 368 does not reproduce the proviso referring to Sections 260(1) and 265. For older assessment years and pending proceedings, the applicable law must be determined under the repeal and savings provisions, including Section 536 of the 2025 Act.
Official legal references
- Income-tax Act, 2025 - official full text
- Income-tax Act, 1961 - official consolidated text
- Income Tax Department - 1961 and 2025 section correspondence
- India Code - Central legislation
Frequently asked questions
Does Section 262 itself create a right to appeal?
No. Section 261 deals with the statutory right of appeal, while Section 262 governs the hearing and related matters.
Who decides the costs of a Supreme Court income-tax appeal?
The Supreme Court has discretion to decide the costs under Section 262(2).
What is the corresponding section in the Income-tax Act, 2025?
Section 368 addresses hearings before the Supreme Court under the 2025 Act.
This article is for general legal information. Court rules, procedural directions and the law governing the relevant tax year should be checked before filing or pursuing an appeal.