When you add a ground in the online Form 35, the portal opens a window with three boxes: the relevant section of the Income-tax Act under which the addition or disallowance was made, the issue (up to 2,000 characters), and the ground of appeal (up to 4,000 characters). You can add as many grounds as you need.

Most weak appeals go wrong at this screen. The relevant section is left as 246A or 250 for every ground, the issue box repeats the ground, and the ground itself is a page of argument. This guide shows what goes in each box, with sample grounds for the orders CAs see most.

For the filing steps and the statement of facts, see our CIT(A) appeals drafting guide and the Section 246A filing guide.

Which Act and which form?

The Income-tax Act, 2025 came into force on 01/04/2026, but it does not move every appeal to the new law.

Assessment year 2026-27 and earlier: Section 536(2)(c) of the 2025 Act keeps proceedings for a tax year that began before 01/04/2026 under the Income-tax Act, 1961, even when they start after that date. These appeals are filed in Form 35 under Sections 246A and 249, and decided under Sections 250 and 251 of the 1961 Act. Some orders go to the Joint Commissioner (Appeals) under Section 246 instead; Form 35 is used there too, and the Joint Commissioner (Appeals) has the same powers on delay, tax payment and additional grounds described below.
Tax year 2026-27 onwards: the matching provisions of the 2025 Act are Section 357 (orders appealable before the Commissioner (Appeals)), Section 358 (form of appeal, fee and limitation), Section 359 (procedure) and Section 360 (powers). The first-appeal form is renumbered from Form 35 to Form 99.

Section 536(2)(k) of the 2025 Act also says that an appeal whose time had already expired before the new Act began is not revived by it.

Before you draft: limitation, fee and tax payment

Requirement	1961 Act	What to check
Time limit	Section 249(2): 30 days from the date of service of the notice of demand for an assessment or penalty, or of the intimation of the order in other cases (for an appeal on tax deducted under Section 195(1), from the date of payment)	The date of valid service, not the date of the order. Where an application under Section 270AA was rejected, the time from the application to service of the rejection is excluded
Delay	Section 249(3): the Commissioner (Appeals) may admit a late appeal for sufficient cause	File a separate application explaining the delay, ideally supported by an affidavit; see our condonation of delay guide
Fee	Section 249(1)	Assessed income up to Rs 1,00,000: Rs 250. Above Rs 1,00,000 up to Rs 2,00,000: Rs 500. Above Rs 2,00,000: Rs 1,000. Any other case (for example a penalty order): Rs 250
Tax on returned income	Section 249(4)	The tax due on the returned income must have been paid when the appeal is filed; where no return was filed, an amount equal to the advance tax payable, unless the Commissioner (Appeals) exempts it for good reason

Paying the appeal fee does not stay the demand. For a stay, apply separately to the Assessing Officer under Section 220(6).

What goes in each box

Relevant section. The section under which the addition, disallowance or levy was made, not the section under which you are appealing. An addition for unexplained cash credits is Section 68; a disallowance for non-deduction of TDS is Section 40(a)(ia); interest is Section 234B. Use Section 246A or 250 only for grounds about the appeal itself, and use the assessment section (143(3), 144, 147) for grounds that attack the assessment as a whole.

Issue. One line that names the dispute and the amount, so the appellate authority can see the issue before reading the ground. For example: "Addition of Rs 18,40,000 under Section 68 for unsecured loans from three lenders".

Ground of appeal. A short, numbered statement of what was wrong and what relief you want. It is not the place for case law or long argument; those belong in the written submissions.

Rules that make a ground work

One issue per ground. Split a combined addition into separate grounds if it has separate facts (each lender, each disallowance).
Legal grounds first. Jurisdiction, limitation and natural justice go at the top, because if one succeeds the rest need not be argued.
Quantify. State the amount in dispute in every merits ground.
Ask for the relief. End with "and the addition be deleted" or "the penalty be cancelled".
Keep alternative pleas separate. If you argue that an addition must go and, in the alternative, that only the profit element can be taxed, make the alternative a separate ground.
Consequential grounds. Interest under Sections 234A, 234B and 234C is usually treated as consequential, but list it anyway, and add an independent ground where the computation or the period is itself wrong. A ground against the mere initiation of penalty is usually dismissed as premature; challenge the penalty order when it is passed.
The general ground. End with a ground reserving the right to add, alter, amend or withdraw grounds. Under Section 250(5), the Commissioner (Appeals) can allow a ground not stated in Form 35 if satisfied that its omission was not wilful or unreasonable. The general ground does not replace that satisfaction, but it shows the intent.

Sample grounds with the relevant section

The 2025 Act column gives the matching section for tax year 2026-27 onwards. For assessment year 2026-27 and earlier, cite the 1961 Act section.

Order or issue	Relevant section to select (1961 Act)	2025 Act equivalent
Scrutiny assessment, ground on the assessment as a whole	143(3)	270
Unexplained credit, investment or money	68 / 69 / 69A	102 to 106 (the group that replaces 68 to 69D)
General business expenditure disallowed	37(1)	34
Disallowance for TDS default	40(a)(ia)	35
Best-judgment assessment	144	271
Reassessment	147 / 148 / 148A	279 / 280 / 281
Penalty for under-reporting or misreporting	270A	439
Interest for default in return, advance tax, deferment	234A / 234B / 234C	423 / 424 / 425
Grounds against the Commissioner (Appeals) order before the Tribunal	250	359

1. Scrutiny assessment under Section 143(3)

Relevant section: 143(3) / 143(2) Issue: Validity of the scrutiny assessment for AY 2023-24. Ground: "On the facts and in the circumstances of the case and in law, the assessment order passed under Section 143(3) is without jurisdiction and void, because no valid notice under Section 143(2) was issued and served on the appellant within three months from the end of the financial year in which the return was furnished. The assessment be annulled."

Check Section 292BB before using this ground: if the appellant took part in the assessment without objecting to the notice before it was completed, late or defective service cannot be raised, though a notice that was never issued still can.

Relevant section: 68 Issue: Addition of Rs 18,40,000 under Section 68 for unsecured loans. Ground: "The learned Assessing Officer erred in adding Rs 18,40,000 under Section 68 as unexplained cash credits, ignoring the confirmations, bank statements and income-tax returns of the three lenders filed during the assessment, which establish their identity, creditworthiness and the genuineness of the transactions. The addition be deleted."

Relevant section: 144B Issue: No show cause notice before the variation. Ground: "The assessment is bad in law because the variation of Rs 18,40,000 was made without issuing a show cause notice proposing it and without considering the appellant's reply, contrary to the procedure laid down for faceless assessment."

2. Best-judgment assessment under Section 144

Relevant section: 144 Issue: Validity of the best-judgment assessment. Ground: "The learned Assessing Officer erred in completing the assessment under Section 144 although the appellant had complied with the notices within the time allowed (replies dated 12/09/2025 and 03/10/2025 are on record), so there was no default of the kind Section 144 requires."

Relevant section: 144 Issue: Estimate of income at Rs 42,00,000 against returned income of Rs 9,10,000. Ground: "Without prejudice, the estimate of income is arbitrary, has no nexus with the books, the past record or any comparable case, and was made without confronting the appellant with the basis of the estimate. The estimate be deleted or reduced to the returned income."

For the defence on merits, see our Section 144 best-judgment guide.

3. Reassessment under Sections 147 and 148

Relevant section: 148A Issue: Reassessment without a valid order under Section 148A. Ground: "The notice under Section 148 and the reassessment are void, because the information relied on was not supplied with the show cause notice under Section 148A, and the order under Section 148A did not deal with the appellant's reply."

Relevant section: 149 Issue: Notice beyond the time allowed. Ground: "The notice under Section 148 for AY 2019-20 was issued after the time allowed by Section 149, and the reassessment is therefore barred by limitation."

Relevant section: 151 Issue: Sanction. Ground: "The notice was issued without the sanction of the authority specified in Section 151 for the period involved, and is invalid."

Our Section 148 guide and Section 148A guide cover these defences in detail.

4. Penalty under Section 270A

Relevant section: 270A Issue: Penalty of Rs 5,60,000 for misreporting. Ground: "The learned Assessing Officer erred in levying penalty under Section 270A at 200% for misreporting, when the notice did not specify which of the cases in Section 270A(9) applied, and the addition arose from a difference of opinion on an allowance, with all facts disclosed in the return. The penalty be cancelled."

Relevant section: 270A Issue: Exclusion under Section 270A(6). Ground: "Without prejudice, the amount on which penalty was levied is excluded from under-reported income under Section 270A(6), because the appellant offered a bona fide explanation and disclosed all material facts."

See our Section 270A penalty guide for the full list of exclusions.

5. Interest under Sections 234A, 234B and 234C

Relevant section: 234B Issue: Interest of Rs 1,12,300 under Section 234B. Ground: "The learned Assessing Officer erred in charging interest under Section 234B of Rs 1,12,300. The interest is consequential to the additions disputed above and must be recomputed on their deletion; further, tax of Rs 46,200 deducted at source and shown in Form 26AS was not reduced in computing the assessed tax."

Relevant section: 234C Issue: Interest under Section 234C on income that could not be estimated. Ground: "No interest under Section 234C is chargeable on the shortfall caused by the capital gain that arose after the earlier instalment dates, because the proviso to Section 234C excludes such a shortfall where the tax on it was paid in the remaining instalments."

Our interest calculation guide shows how to check the figures.

6. Grounds against a Commissioner (Appeals) order before the Tribunal

The appeal to the Tribunal is in Form 36 (Form 115 under the 2025 Act), within two months from the end of the month in which the order is communicated (Section 253(3)). The relevant section for grounds about the first appellate order itself is Section 250.

Relevant section: 250 Ground: "The learned Commissioner (Appeals) erred in dismissing the appeal for want of prosecution without deciding the grounds on merits."

Relevant section: 250 / Rule 46A Ground: "The learned Commissioner (Appeals) erred in refusing to admit the lenders' bank statements as additional evidence, although the appellant was prevented by sufficient cause from producing them before the Assessing Officer, and the documents go to the root of the addition."

The general ground

"The appellant craves leave to add, alter, amend or withdraw any ground of appeal at or before the hearing."

Common mistakes

Selecting Section 246A as the relevant section for every ground.
One ground that challenges the whole order "on facts and in law" with no issue named.
Case citations and paragraphs of argument inside the ground.
No separate ground for each addition, so a partly allowed appeal is hard to give effect to.
Missing the jurisdiction ground (notice, limitation, sanction) and trying to raise it later without explaining why it was left out.
Filing on day 31 without a condonation application.

Frequently asked questions

What is the "relevant section" in Form 35?

It is the section of the Income-tax Act under which the addition, disallowance or levy you are disputing was made, for example 68, 40(a)(ia) or 234B. It tells the appellate authority which provision each ground is about.

Can I add a ground after filing Form 35?

Yes, with the leave of the Commissioner (Appeals). Section 250(5) allows a ground not in the form if the omission was not wilful or unreasonable. File a short application explaining why it was not raised earlier.

Is Form 35 still used after the Income-tax Act, 2025?

Yes, for assessment year 2026-27 and earlier, which stay under the 1961 Act. For tax year 2026-27 onwards, the first appeal is in Form 99 under Section 358 of the 2025 Act.

What is the time limit to file Form 35?

30 days from the date of service of the notice of demand or the order. A delayed appeal needs a condonation application showing sufficient cause.

Drafting grounds for a live appeal? Start a new appeal in TaxNoticeAI Appeals: upload the assessment order and get draft grounds, each with its relevant section and issue, ready for your review before filing.

Form 35 Grounds of Appeal: Samples With Relevant Section