TaxTMI 
TaxTMI 
Procedural Autonomy and Judicial Independence in Tax Appeals : Clause 364 of the Income Tax Bill, 2025 Vs. Section 255 of the Income-tax Act, 1961
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....rative to analyze whether Clause 364 brings about substantive changes, preserves the status quo, or introduces nuances that could impact the administration of tax justice. This commentary examines Clause 364 in a clause-by-clause manner, elucidating its legislative intent, operational mechanics, and practical implications. It then undertakes a detailed comparative analysis with the corresponding Section 255 of the Income-tax Act, 1961, highlighting similarities, differences, and the broader implications for stakeholders. Objective and Purpose Both Clause 364 and Section 255 are designed to ensure that the ITAT operates with institutional integrity, transparency, and efficiency. The provisions aim to: * Establish the composition and fun....
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....udication. Sub-clause (3): Single Member Benches Clause 364(3) permits the President or a member authorized by the Central Government to sit singly and dispose of cases where the assessee's total income, as computed by the Assessing Officer, does not exceed fifty lakh rupees. This threshold-based mechanism is designed to expedite the disposal of less complex or lower-stakes matters, alleviating the burden on dual-member Benches and enhancing overall Tribunal efficiency. The authorization by the Central Government introduces an element of executive oversight, albeit limited to the designation of members eligible to sit singly. The provision also ensures that the single-member dispensation is not arbitrary but is circumscribed by the m....
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....Clause 364(7) confers upon the Tribunal: * All powers vested in income-tax authorities u/s 246; * The status of a judicial proceeding u/ss 229 and 267, and for the purposes of section 233 of the Bharatiya Nyaya Sanhita, 2023; * The status of a Civil Court for the purposes of section 215 and Chapter XXXVIII of the Bharatiya Nagarik Suraksha Sanhita, 2023. These provisions collectively reinforce the Tribunal's quasi-judicial character, confer procedural safeguards, and ensure that its proceedings and orders are recognized as judicial acts for purposes such as perjury, contempt, and enforcement. Comparative Analysis with Section 255 of the Income-tax Act, 1961 Structural and Substantive Parity At a structural level, Clause 364 an....
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....es, and introducing dynamic jurisdiction. These provisions facilitated the transition to e-governance and virtual hearings, especially in the wake of the COVID-19 pandemic, and allowed for exceptions or modifications to the Act to operationalize such schemes. Clause 364 of the 2025 Bill does not contain any analogous provision. The omission could imply a return to the Tribunal's inherent procedural autonomy or a legislative choice to address e-governance through separate rules or notifications. * Reference to Income-tax Authority Powers: Section 255(6) refers to powers vested in income-tax authorities u/s 131 (powers regarding discovery, production of evidence, etc.), while Clause 364(7)(a) refers to section 246 (which, in the 2025 Bi....
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....ng members By President from among members Bench Composition Judicial + Accountant Member Judicial + Accountant Member Single-Member Disposal Permitted for cases <= Rs. 50 lakh; President or Govt. authorized member Permitted for cases <= Rs. 50 lakh; President or Govt. authorized member Special Benches 3+ members; at least one Judicial and one Accountant Member 3+ members; at least one Judicial and one Accountant Member Difference of Opinion Majority prevails; reference to other members if equally divided Majority prevails; reference to other members if equally divided Procedural Autonomy Yes Yes Powers Conferred Those u/s 246; judicial proceeding under BNS 2023; Civil Court under BNSS 2023 Those u/s 13....
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....les or practice directions to clarify procedural matters. The absence of explicit government notification powers for procedural schemes may reduce administrative flexibility but strengthens the Tribunal's self-governance. Conclusion Clause 364 of the Income Tax Bill, 2025, largely preserves the tried-and-tested procedural architecture of 6Section 255 of the Income-tax Act, 1961, while updating statutory cross-references to reflect recent criminal law reforms. The omission of explicit e-governance provisions may reflect a policy choice to address technological and procedural innovations through subordinate legislation, preserving the Tribunal's autonomy and adaptability. The continued emphasis on balanced Bench composition, proced....