Section 367 of the Income-tax Act, 2025 — Appeal to the Supreme Court

In plain language

What Section 367 says in plain English

Section 367 of the Income-tax Act, 2025 is the provision that lets a taxpayer or the Income-tax Department take an income-tax dispute all the way up to the Supreme Court of India — the very last step in the tax appeal ladder. But there is an important catch: you cannot walk into the Supreme Court on your own. An appeal lies to the Supreme Court only from a judgment of a High Court that was delivered on an appeal filed under Section 365, and only if that same High Court certifies the case to be "fit for appeal to the Supreme Court."

In simple words: the High Court acts as a gatekeeper. If it issues a certificate of fitness, your matter can proceed to the apex court. If it refuses, you must instead seek the Supreme Court's own permission through a Special Leave Petition (SLP) under Article 136 of the Constitution — a separate route that does not need the High Court's blessing.

Where it sits in the appeal ladder

The income-tax dispute-resolution chain under the 2025 Act flows upward step by step:

• Assessing Officer passes the assessment order.
• Joint Commissioner (Appeals) / Commissioner (Appeals) — first appeal.
• Income Tax Appellate Tribunal (ITAT) under Section 363 — the final fact-finding authority.
• High Court under Section 365 — hears only substantial questions of law.
• Supreme Court under Section 367 — the final word.

Because the ITAT is the last authority to decide facts, both the High Court and the Supreme Court deal only with questions of law, not with re-examining evidence or recomputing income.

Who can use Section 367 and the key conditions

• Both sides can appeal — the taxpayer (assessee) as well as the Income-tax Department. The section does not favour either party.
• Only against a High Court judgment delivered on a Section 365 appeal (which itself arises from an ITAT order under Section 363). You cannot jump directly from the ITAT to the Supreme Court under this section.
• A certificate of fitness is mandatory. The High Court certifies the case as fit — typically where a substantial question of law of general or public importance is involved, or where courts have taken conflicting views.
• No fixed monetary threshold in the section itself. Section 367 does not prescribe a rupee limit. In practice, however, the Department files Supreme Court appeals only above monetary limits set by CBDT circulars (revised periodically), to avoid clogging the court with small-value matters.

How Section 367 interacts with Section 368 and Section 365

Section 367 must be read together with Section 368 (Hearing before the Supreme Court), which supplies the procedure:

• The provisions of the Code of Civil Procedure, 1908 relating to appeals to the Supreme Court apply to a Section 367 appeal, just as they apply to appeals from a High Court decree.
• The costs of the appeal are at the discretion of the Supreme Court.
• Where the Supreme Court varies or reverses the High Court's judgment, effect is given to the apex court's order in the manner provided in Section 365(10) — meaning the assessment is re-worked to match the final ruling.

Practical implications for a normal taxpayer

• Tax is still payable meanwhile. Filing or pending an appeal — even before the Supreme Court — does not automatically freeze the demand. Tax assessed remains payable unless a stay is granted; consider applying for a stay to avoid recovery action.
• It is expensive and slow. Supreme Court litigation involves senior counsel and can run for years, so most individual taxpayers stop at the High Court or use an SLP only for high-stakes, principle-setting issues.
• Get the certificate at the right time. Ask the High Court for the fitness certificate when the judgment is pronounced; if refused, the SLP window under Article 136 (generally 90 days) becomes the fallback.

Section 367 largely mirrors the old Section 261 of the Income-tax Act, 1961, but is drafted in cleaner language: it drops the obsolete pre-1998 "reference under Section 256" machinery and points cleanly to Section 363 (ITAT) and Section 365 (High Court).