Section 366: High Court appeal to be heard by not less than two Judges

Introduction

An appeal to the High Court under section 365 is heard by a Bench of at least two Judges. Section 366 supplies the rule for a majority decision and for referring a point of law on which the Judges are equally divided.

Key takeaways

Bench strength and decision by majority

An appeal filed before the High Court under section 365 must be heard by a bench of not less than two Judges of the High Court, and is decided according to the opinion of those Judges, or of the majority, if there is one.

When there is no majority

Where there is no majority, the Judges state the point of law on which they differ, and the case is then heard on that point alone by one or more of the other Judges of the High Court. That point is decided according to the opinion of the majority of the Judges who heard the case, including those who heard it first.

Practical scope

Confirm that the proceeding is an appeal under Section 365. Section 366 supplies the High Court bench and decision rule for that appeal; it should not be imported as the universal bench rule for every proceeding merely involving tax.

Where the original Judges have no majority, identify the exact point of law they state as the disagreement. The additional hearing is on that point only, and the final majority includes the Judges who first heard the case.

Limits and separate requirements

A difference of opinion does not itself mean the taxpayer wins or loses, nor does it create an automatic fresh hearing on every issue. Preserve the stated point and the reference order.

The number of Judges under Section 366 does not replace the substantial-question-of-law and other appeal requirements in Section 365. Bench composition and admissibility of an appeal are separate questions.

Step-by-step review

1. Confirm the statutory appeal route and the High Court bench constituted to hear it.

2. Read whether the original Judges reached a majority on the question.

3. If no majority exists, identify the stated point of law and the order sending it to other Judges.

4. Read the resulting opinions together, including the original opinions, to identify the majority on that point.

Hypothetical example

Hypothetical illustration: two Judges differ on one stated legal question in a Section 365 appeal. One other Judge hears that point. The point is resolved by the majority among the three Judges who heard it, including the original two; this is not an unrestricted rehearing of every matter in the appeal.

Records to prepare

Memorandum of appeal and formulated substantial question of law.

Original opinions and the precise stated point of difference.

Reference order, additional opinion and final operative order.

Official amended Act source

• Income-tax Act, 2025 as amended by Finance Act, 2026: Section 366 and related provisions

Step-by-step flow for the High Court bench under Section 366

1. 1

   Has an appeal been filed before the High Court under section 365?

   • No: Section 366 does not apply.
   • Yes: Go to the next step.
2. 2

   Constitute the bench

   Under Section 366(1), the appeal is heard by a bench of not less than two Judges of the High Court.

3. 3

   Is there a majority opinion?

   The appeal is decided by the opinion of the Judges, or of the majority if any.

   • Yes: The appeal is decided according to that opinion.
   • No: Go to the next step.
4. 4

   Refer the point of difference

   Under Section 366(2), the Judges state the point of law on which they differ. The case is then heard on that point only by one or more other Judges of the High Court, and decided by the majority of all Judges who heard it, including those who first heard it.

Practical checklist

Glossary

Point of difference

The point of law on which the original Judges state that they disagree.

Majority opinion

The opinion supported by the majority of the Judges counted under the applicable limb of Section 366.

Frequently asked questions