Section 375 · Appeals
Section 375 of the Income-tax Act, 2025 — Declaration to Avoid Repetitive Appeals When an Identical Question of Law is Pending Before the High Court or Supreme Court
By CA Rajat Agrawal
Updated 05 Jul 2026
Chapter XVIII
📜 What the law says — Section 375, Income-tax Act 2025
375. (1) Irrespective of anything contained in this Act, where an assessee claims
that—
(a) any question of law arising in his case for a tax year pending before the
Assessing Officer or any appellate authority (such case being herein
referred to as the relevant case) is identical with a question of law arising
in his case for another tax year (such case being herein referred to as
the other case); and
(b) such question of law for such other case is pending—
(i) before the High Court on a reference under section 256 or on an
appeal under section 260A of the Income-tax Act, 1961 (43 of 1961);
or
(ii) before the Supreme Court on a reference under section 257 or on
an appeal under section 261 of the Income-tax Act, 1961 (43 of
1961); or
(iii) before the High Court on an appeal made under section 365; or
(iv) before the Supreme Court on appeal made under section 367; or
(v) in a Special Leave Petition under article 136 of the Constitution,
against the order of the Appellate Tribunal or the jurisdictional
High Court,
he may furnish a declaration to the Assessing Officer or the appellate authority, in
such form and manner, as may be prescribed, that if the Assessing Officer or the
appellate authority agrees to apply in the relevant case the final decision on the
question of law in the other case, he shall not raise such question of law in the rele-
vant case before any appellate authority or in a subsequent appeal before a higher
forum.
(2) Where a declaration under sub-section (1) is furnished to any appellate authority,
the appellate authority shall—
(a) call for a report from the Assessing Officer on the correctness of the claim
made by the assessee; and
(b) allow the Assessing Officer an opportunity of being heard in the matter,
if such request is made by him.
(3) The Assessing Officer or the appellate authority, may, by an order in writing,—
(a) admit the claim of the assessee if he or it is satisfied that the question of
law arising in the relevant case is identical with the question of law in
the other case; or
(b) reject the claim if he or it is not so satisfied.
(4) An order under sub-section (3) shall be final and shall not be called in question
in a
In plain language
What Section 375 actually deals with
Section 375 of the Income-tax Act, 2025 (effective 1 April 2026) is a litigation-saving mechanism. It lets a taxpayer say to the tax authority: "The exact legal question you are fighting me on this year is already pending before the High Court or Supreme Court in my own earlier year. Instead of us both wasting time and money re-arguing it, I promise to accept whatever that higher court finally decides — so please dispose of my current case now on the same footing." This is the 2025 Act's re-enactment of the old Section 158A of the Income-tax Act, 1961. The scope in the section heading ("case pending before High Court or Supreme Court") is confirmed: it is about avoiding repetitive appeals on an identical question of law.
Who it applies to
- Any assessee (individual, HUF, firm, company, etc.) who has the same legal question arising in two different tax years.
- The question in the "other case" must already be pending before the High Court under section 365 (reference/appeal on substantial question of law) or before the Supreme Court under section 367, including where it is caught in a Special Leave Petition under Article 136 of the Constitution.
- The question in the "relevant case" (the current year) must be pending before the Assessing Officer, Joint Commissioner (Appeals), Commissioner (Appeals) or the Appellate Tribunal.
The core conditions
- Identity of the question of law. It must be the same legal issue — not merely a similar one and not a question of fact. Example: whether a particular receipt is capital or revenue in nature.
- Same assessee. The pending higher-court case must be the taxpayer's own case in another year (this is the distinction from Section 376, which lets the Department defer its appeal when the same question is pending in another taxpayer's case).
- A written declaration must be furnished to the AO or appellate authority in the prescribed form and manner, stating that if the higher court's decision is applied, the assessee will not raise that question again in the current case.
How the procedure runs
- Step 1 — Declaration: The assessee files the declaration with the AO or the appellate authority handling the current year.
- Step 2 — Report & hearing: The authority calls for a report from the Assessing Officer and gives the AO a chance to be heard.
- Step 3 — Order: The authority passes a written order either admitting the claim (if satisfied the two questions are truly identical) or rejecting it. This order is final and cannot be appealed or revised.
- Step 4 — If admitted: The current case is decided without waiting for the higher court, applying the position that will follow once the other case is final. The assessee is then barred from raising that question in any appeal before an appellate authority or in any subsequent appeal to the High Court or Supreme Court.
- Step 5 — When the other case becomes final: The higher court's ruling is applied to the current case, and the order is amended if necessary to conform to it.
How it interacts with other sections
- Section 376 is the mirror image for the tax department — it allows deferral of departmental appeals where an identical question is pending in another assessee's case (old Section 158AB).
- Sections 365 and 367 govern appeals to the High Court and Supreme Court — the "pending" case must sit at one of these forums.
- Sections 356–360 (first appeals) and 361–364 (Tribunal) define the appellate authorities before whom the current case may be pending.
Practical implications
- It is a double-edged tool: you lock in the future higher-court decision, whether it goes for or against you. Use it only when you genuinely believe the higher-court outcome will help you, or when the cost and delay of parallel litigation is not worth it.
- It saves fees, time and repeated hearings across multiple years on the same point.
- There is no monetary threshold — it applies to any amount, as long as the legal question is identical.
💡 Example
Numeric example 1 — capital vs revenue receipt. Mr. Sharma received a ₹40,00,000 non-compete fee in AY 2022-23; the department taxed it as revenue income and the question "is a non-compete fee capital or revenue?" is now pending before the High Court under section 365. In AY 2026-27 he receives a similar ₹22,00,000 non-compete fee and the AO again seeks to tax it. Rather than litigate afresh, Mr. Sharma files a Section 375 declaration. The Commissioner (Appeals) admits it. His AY 2026-27 case is disposed now, and when the High Court finally holds the receipt is capital (non-taxable), his AY 2026-27 order is amended to delete the ₹22,00,000 addition automatically.
Numeric example 2 — disallowance. A company has a recurring ₹15,00,000 expense disallowed each year on the identical legal ground. The AY 2023-24 dispute on that exact question is pending in the Supreme Court under section 367. For AY 2026-27, instead of paying appeal fees and attending fresh hearings, the company files a Section 375 declaration. If admitted, it cannot re-argue the point — but it also gets the benefit automatically the moment the Supreme Court rules in its favour.
A relatable story. Think of Priya, who runs a small design firm. The same "is this income business or profession?" question popped up in three assessment years. Her earlier year is already before the High Court. Her CA advised: "Don't fight the same battle three times — file one Section 375 declaration for the current year, accept the High Court's verdict, and move on." Priya did, saved two rounds of appeal fees and months of stress, and when the High Court ruled in her favour, all her years were corrected together.
| Aspect | Section 375 (2025 Act) | Section 376 (2025 Act) |
|---|
| Old 1961 Act equivalent | Section 158A | Section 158AB |
| Who invokes it | The assessee (taxpayer) | The tax department / Board |
| Where the identical question is pending | Taxpayer's own other-year case before HC/SC | Another taxpayer's case before HC/SC |
| Trigger document | Declaration in prescribed form to AO / appellate authority | Direction to defer filing of appeal |
| Effect | Current case disposed now; taxpayer cannot re-raise the question; final decision applied later | Departmental appeal deferred until the other case is decided |
| Monetary threshold | None | None |
| Is the admission/rejection order appealable? | No — it is final, not open to appeal or revision | Not applicable in the same manner |
Related sections
Section 376 — Deferral of departmental appeal when identical question is pending (old 158AB) Section 365 — Appeal to the High Court on a substantial question of law Section 367 — Appeal to the Supreme Court Section 356 — Appeals to Joint Commissioner (Appeals) / Commissioner (Appeals) Section 361 — Appeals to the Appellate Tribunal Section 377 — Revision of orders by the Competent Authority
Forms under this section
Income-tax forms (2025) prescribed under Section 375:
Frequently asked questions
What is Section 375 of the Income-tax Act, 2025 in simple terms?
It lets a taxpayer avoid fighting the same legal question in multiple years. If that exact question is already pending in the High Court or Supreme Court in your own earlier year, you can declare that you'll accept the higher court's decision, and your current case is disposed of on the same basis.
Which section of the old Income-tax Act, 1961 does Section 375 replace?
It re-enacts Section 158A of the 1961 Act. The related departmental mechanism (old Section 158AB) is now Section 376 of the 2025 Act.
Can I appeal against the order admitting or rejecting my Section 375 declaration?
No. The order passed by the authority under this section is final and cannot be challenged by way of appeal or revision under the Act.
Does the question have to be identical or just similar?
It must be an identical question of law, not merely a similar one, and it must be a question of law rather than a question of fact. If the facts or the legal issue differ, the authority can reject the declaration.
What happens if the higher court finally decides against me?
You are bound by that decision because you agreed to accept it. Your current-year order is amended, if necessary, to align with the higher court's ruling — which is why you should use this tool only when the outcome is likely favourable or the litigation cost isn't worth it.
Is there any minimum tax amount needed to use Section 375?
No. There is no monetary threshold. The mechanism applies purely on the basis of an identical question of law being pending before the High Court or Supreme Court, regardless of the amount involved.
Who can be the appellate authority for a Section 375 declaration?
The declaration can be filed with the Assessing Officer or the relevant appellate authority, which includes the Joint Commissioner (Appeals), Commissioner (Appeals), or the Appellate Tribunal handling your current case.
C
CA Rajat Agrawal
Chartered Accountant, EaseValue · Reviewed 05 Jul 2026
This explainer is prepared and reviewed by EaseValue's tax team, based on the text of the Income-tax Act, 2025 (as amended by the Finance Act, 2026).
Disclaimer: This page explains the law in general terms for education and is not professional advice. The Income-tax Act, 2025 takes effect from 1 April 2026; provisions, thresholds and interpretations may change. Please confirm your specific position with our team before acting.
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