Income Tax Appeal to CIT(A): E-Filing Form 35, Stay of Demand & Timelines

Introduction

An income tax appeal to CIT(A) is the first statutory remedy when you disagree with an assessment, penalty or demand order. For most older assessment years still governed by the Income-tax Act, 1961, the appeal is e-filed in Form 35 on incometax.gov.in within 30 days of service of the demand notice or order. Filing the appeal does not automatically stop recovery. You must also apply for stay of demand, usually before the Assessing Officer under section 220(6).

This guide explains when Form 35 applies, how to e-file it, what tax must be paid before the appeal is admitted, how stay applications work in practice, and what Hyderabad and Telangana taxpayers should do if recovery starts or the first appeal fails. It is written for individuals, firms, companies and business owners — not as a substitute for advice on your file.

Important 2026 note — Form 35 or Form 99 The Income-tax Act, 2025 is in force from 1 April 2026. Appeals that continue under the saved 1961 Act generally still use Form 35. Appeals governed by the 2025 Act are filed in Form 99 (section 358 / rule 167 — confirm the live form name on the portal before you file). Limitation remains 30 days. Pending Form 35 appeals as on 1 April 2026 continue under the old Act; you do not re-file only because the new Act commenced. Verify the correct form for your assessment year on the e-filing portal.

What is an appeal to CIT(A) and when should you file it?

The Commissioner of Income-tax (Appeals) — or Joint Commissioner (Appeals) for certain lower-rank Assessing Officer orders — is the first appellate authority. Most first appeals are allocated through the National Faceless Appeal Centre (NFAC) under the Faceless Appeal Scheme, 2021 and the e-Appeals Scheme, 2023. You will usually not walk into a Hyderabad CIT(A) office for a regular scrutiny appeal.

You typically file when you challenge:

• a scrutiny or best-judgment assessment;
• a reassessment;
• an intimation that creates a demand;
• a penalty order;
• a rectification that increases demand;
• certain TDS or tax-collection orders; or
• other orders listed as appealable under the relevant Act.

If the dispute is only a clear arithmetical error, first consider a rectification application. An appeal is for disagreement on facts, law, or both.

Form 35 or Form 99 — which form applies in 2026?

Use the form that matches the governing law for that tax year, not the calendar date on which you log in.

Situation	Usual form	Governing law
Tax year beginning before 1 April 2026, and proceedings saved under the 2025 Act	Form 35	Income-tax Act, 1961 (ss. 246A / 249; rule 45)
Proceeding governed by the Income-tax Act, 2025	Form 99	Section 358 and rule 167 (verify on portal)
Appeal already pending on 1 April 2026	No fresh form only due to the new Act	Continues under the 1961 Act

The rest of this article focuses on Form 35, because that is still the form for a large volume of live Hyderabad assessments. If the portal offers Form 99 for your year, follow those fields; the 30-day clock, fee logic and stay strategy remain similar.

Time limit: the 30-day clock starts from service, not the order date

Under section 249(2) of the 1961 Act, the appeal must be presented within 30 days of:

• service of the notice of demand (assessment / penalty cases); or
• service of intimation of the order (other cases).

What counts as “service” in e-proceedings is often the portal upload or email notification date, not the date printed on the PDF. Keep a screenshot of the email and the “Pending Actions / E-Proceedings” screen with the date visible.

If you miss 30 days, you can still file with a condonation of delay request (section 249(3)). CIT(A) may admit the appeal only if satisfied that there was sufficient cause. Portal glitches, hospitalisation, or late communication of the order can support condonation — but condonation is discretionary, not a right. File as soon as you can, with dates, screenshots and a short explanation.

Expired limitation under the 1961 Act is not revived merely because the 2025 Act has commenced.

Tax you must pay before the appeal is admitted

Filing Form 35 is not enough. Section 249(4) says the appeal shall not be admitted unless, at the time of filing:

• if you filed a return — you have paid tax due on the returned income; or
• if you did not file a return — you have paid an amount equal to the advance tax that was payable.

This is not the same as paying the entire disputed demand. It is tax on what you yourself accepted in the return (or the advance-tax equivalent). CIT(A) has limited power to exempt only the second situation, and only for good and sufficient reasons recorded in writing. Non-payment of tax on returned income is a common reason appeals are dismissed at the threshold.

Pay through the e-Pay Tax utility and keep BSR code, challan date and amount ready for the “Details of Taxes Paid” tab.

Appeal fee for Form 35

Pay the fee before you submit the form (e-Pay Tax → Income Tax → Other Receipts (500) → Appeal Fees):

Total income determined by the AO	Appeal fee
Up to ₹1,00,000	₹250
Above ₹1,00,000 up to ₹2,00,000	₹500
Above ₹2,00,000	₹1,000
Other (non-quantifiable) matters	₹250

Enter challan particulars in Form 35. Do not file and “pay later”.

How to e-file Form 35: step-by-step

Official path on incometax.gov.in:

**1. **Log in with PAN / TAN.

**2. **Go to Pending Actions → E-Proceedings → File Appeal, or e-File → Income Tax Forms → Form 35.

**3. **Select the assessment year and whether the order has a DIN.

**4. **Complete Basic Information and the order details (section, order number, dates).

**5. **Disclose any other pending appeal before JCIT(A) / CIT(A).

**6. **Enter taxes paid and appeal-fee challan details.

**7. **Draft the statement of facts and grounds of appeal. Keep facts chronological and grounds specific. Recent portal practice requires quantifying the amount against each ground where the demand is measurable — do not dump one vague paragraph.

**8. **Upload evidence (PDF / ZIP; individual file usually up to 5 MB, overall cap around 50 MB — confirm live limits).

**9. **If delayed, fill the condonation fields with reasons.

**10. **Preview, then e-verify with DSC or EVC.

**11. **Download the acknowledgement and transaction ID immediately.

Who must sign: the person authorised to sign the return under section 140 (or the corresponding 2025-Act provision).

Documents checklist for Form 35

• PDF of the order appealed against (download from E-Proceedings);
• notice of demand;
• computation showing your figure versus the AO’s figure;
• return acknowledgement and tax-paid challans (including tax on returned income);
• appeal-fee challan;
• grounds of appeal and statement of facts;
• key evidence already on the assessment record (bank statements, invoices, Form 26AS / AIS extracts, agreements);
• condonation application and proof of late service, if delayed; and
• authorisation if an advocate or CA will appear on video conference.

Additional evidence at the first-appeal stage is restricted. If a document was not produced before the AO, explain why it could not be produced earlier. Do not assume CIT(A) will admit a fresh bundle as of right.

Stay of demand: filing Form 35 does not stop recovery

A demand notice generally requires payment within the time stated (commonly 30 days). If you only file the appeal and do nothing else, the department can treat you as an assessee in default and start recovery — adjustment of refunds, attachment, or other recovery steps.

Stay is a separate application.

Where to apply

**1. Assessing Officer — section 220(6). **Once the first appeal is filed, the AO may treat you as not being in default in respect of the disputed amount, on conditions the AO thinks fit. This is the first and most used forum.

**2. Principal Commissioner / Commissioner. **If the AO refuses stay or insists on an unworkable deposit, approach the administrative Principal CIT of the charge (for Hyderabad assessees, the relevant Pr. CIT at Aayakar Bhavan, Basheerbagh or the charge shown on your order — confirm current jurisdiction).

**3. CIT(A) / NFAC. **The first appellate authority also has power to deal with stay in appropriate cases. In practice, many files still move first through the AO.

**4. Telangana High Court (writ). **Only if stay is refused mechanically, recovery is coercive despite a pending application, or the assessment is alleged to be high-pitched and the statutory authorities refuse to apply their mind. A writ is exceptional, not the first step.

Is 20% of disputed demand mandatory?

CBDT Office Memorandums (notably 29 February 2016 and 31 July 2017, modifying Instruction No. 1914) treat payment of about 20% of the disputed demand as the usual condition for stay till disposal of the first appeal. The AO is expected to dispose of a stay petition in about two weeks. A higher or lower percentage generally needs approval of the Principal CIT, for example where the same issue is already decided against the taxpayer in an earlier year, or the assessment is high-pitched / there is genuine hardship.

Courts have repeatedly said that 20% is a guideline, not a rigid statutory pre-condition. The Supreme Court in the LG Electronics line of cases, and later High Court decisions including NASSCOM v. DCIT (Delhi HC) and Clearmedi Healthcare Pvt. Ltd. (Delhi HC, late 2025), hold that section 220(6) is a quasi-judicial discretion. The officer must look at prima facie case, balance of convenience, undue hardship and protection of revenue — not reject stay only because 20% was not paid.

That said, many field officers still ask for 20%. Budget for it unless hardship or a strong prima facie case justifies a lower deposit, and record that request in writing. Stay is usually till disposal of the CIT(A) appeal, subject to review conditions. Pay the undisputed portion of demand without waiting.

Practical stay application contents

• appeal acknowledgement (Form 35 / Form 99);
• demand notice and computation of disputed versus undisputed tax;
• prima facie grounds (brief);
• hardship: cash flow, working capital, attachment risk;
• proof of tax already paid (returned-income tax plus any voluntary 20%); and
• prayer to treat the assessee as not in default till CIT(A) disposal, and to restrain coercive recovery or refund adjustment beyond the amount directed.

File the stay application as soon as Form 35 is acknowledged. Do not wait for the first NFAC notice.

What happens after Form 35 is filed?

• NFAC / the appeal unit checks completeness.
• Notices come on the portal. Watch E-Proceedings and email.
• You may request a personal hearing through video conference. Under the current faceless scheme, a request for VC hearing is generally to be granted.
• CIT(A) can call for a remand report from the AO, admit additional grounds if omission was not wilful, and enhance the assessment only after notice.
• Administrative guidance still aims at disposal, as far as possible, within one year from the end of the financial year in which the appeal was filed, and issue of the order within 15 days of the last hearing. Backlogs are common.

Priority or out-of-turn disposal may be sought in genuine hardship, senior-citizen cases, court directions, or high demand (CBDT office letter dated 7 March 2024 — confirm current internal guidelines).

Search, serious fraud, international tax and Black Money Act matters may follow a different (often jurisdictional) track. CBDT has also notified designated CIT(A)s for certain search / survey assessments, including Hyderabad.

If you lose before CIT(A): next forums for Hyderabad taxpayers

Stage	Forum	Usual route	Typical limitation
First appeal	JCIT(A) / CIT(A) via NFAC	Form 35 or Form 99	30 days from service
Second appeal	ITAT Hyderabad (confirm bench from AO charge)	Form 36	Official departmental tutorial (as amended by Finance Act, 2025) states 2 months from the end of the month in which the CIT(A) order is communicated (w.e.f. 1 October 2024). Older practice was 60 days from communication. Verify the live ITAT limitation on the date you file.
Substantial question of law	Telangana High Court	Appeal under section 260A (1961 Act) / corresponding 2025-Act provision	120 days from receipt of the ITAT order
Extraordinary cases	Telangana High Court writ	Article 226	Not a substitute for appeal; used for jurisdictional errors, natural justice, or mechanical stay refusal

ITAT hears both facts and law. The High Court does not re-appreciate evidence except on a substantial question of law.

Common mistakes that sink Form 35 appeals

• Counting 30 days from the date printed on the order instead of the service / upload date.
• Filing the appeal but not paying tax on returned income.
• Assuming the appeal itself stays recovery.
• Vague grounds (“addition is bad in law”) without amount, section and reason.
• Uploading an unreadable scan or missing the demand notice.
• Raising new evidence without explaining why it was not before the AO.
• Missing NFAC notices on the portal.
• Paying 20% late, after refund adjustment or attachment has already happened.
• Using the wrong form after 1 April 2026 without checking whether the year is a saved 1961-Act case.

When to consult an advocate

Speak to a tax counsel before the 30-day mark if the addition is large, the order is ex parte, a search or survey is involved, stay is likely to be contested, or you need a High Court strategy. For Hyderabad files, counsel who regularly appear before ITAT Hyderabad and who can draft both Form 35 grounds and a section 220(6) stay note in parallel will save time. Portal filing can be done by the taxpayer; the quality of grounds and stay papers is what usually decides the file.

Bullet-point checklist

• Note the exact service / portal-upload date of the order and demand notice.
• Confirm whether your year uses Form 35 or Form 99.
• Pay tax on returned income (or the section 249(4)(b) equivalent) before filing.
• Pay the appeal fee through e-Pay Tax and save the challan.
• Draft specific, quantified grounds and a short statement of facts.
• E-file and e-verify; download the acknowledgement the same day.
• File a stay application under section 220(6) immediately; pay undisputed demand.
• Decide 20% versus a reasoned lower-deposit request (hardship / high-pitched assessment).
• Watch the portal for NFAC notices; request video hearing in writing.
• Diary the ITAT / High Court limitation the day the CIT(A) order is served.

Conclusion

An income tax appeal to CIT(A) is a 30-day, portal-driven process. For saved 1961-Act years the vehicle is still Form 35; newer 2025-Act years use Form 99 on the same e-filing platform. Pay tax on returned income, file specific grounds, and treat stay of demand as a second, equally urgent filing. Hyderabad taxpayers should map the next step to ITAT Hyderabad and, only when the law question is substantial or stay is arbitrarily refused, to the Telangana High Court. Act on the service date, not on the date printed on the first page of the order.

Short disclaimer

This article is for general information for Indian taxpayers, including clients in Hyderabad and Telangana. It is not legal advice, is not a legal opinion, and does not create an advocate–client relationship. Income-tax forms, faceless-appeal procedures and stay guidelines change by notification. Confirm the live form (Form 35 or Form 99), fee utility and limitation on incometax.gov.in and with counsel before you file. Case outcomes depend on facts.

Related reading

• How to reply to an income-tax scrutiny / section 142(1) / 143(2) notice
• Reassessment under section 148 — timelines and defences (Telangana)
• Stay of tax recovery and refund adjustment — practical steps
• Appeal from CIT(A) to ITAT Hyderabad — Form 36 guide
• High-pitched assessment and writ remedies before the Telangana High Court
• Penalty Relief and Appealing Faceless Assessments — Practical Steps
• Compounding Tax Offences: Income Tax and GST — Procedure and Eligibility

Received an assessment or penalty order with a demand? Do not wait for recovery. Share the order, demand notice and portal service date with our Hyderabad tax litigation team. We can draft Form 35 / Form 99 grounds, file a section 220(6) stay note, and diary ITAT limitation before the 30-day window closes.

Write through the contact form if you have a paper in hand.