Clause 366 of Income Tax Bill 2025: What Majority Decision Means
Clause 366 of the Income Tax Bill, 2025 reaffirms the majority decision clause already present in the existing Income Tax Act under Section 260B. While it may seem like a copy-paste job, this provision plays a crucial role in dispute resolution when income tax appeals are heard by a Bench of two or more judges.
Let’s break it down in simple terms—what the clause says, why it matters, and what taxpayers and professionals should know.
What Does Clause 366 Say?
Clause 366 of the Income-tax Bill, 2025 states:
“If the Members of a Bench differ in opinion on any point, the point shall be decided according to the opinion of the majority, if there is a majority.”
This is verbatim what Section 260B of the Income-tax Act, 1961 currently states.
Legal Background: Section 260B of Income-tax Act, 1961
Section 260B applies when appeals are heard by a Bench of the High Court under Section 260A. It ensures that if judges differ, the final decision follows the majority view.
This provision avoids a deadlock and ensures continuity in appellate tax matters.
Why the Majority Decision Clause Still Matters
Even though the Income-tax Bill 2025 is replacing the Act, this clause remains unchanged for good reason:
- Avoids judicial delays due to differing opinions
- Promotes consistency in appellate decisions
- Clarifies the outcome when there is disagreement among Bench members
- Preserves legal certainty for taxpayers awaiting verdicts
Clause 366 vs Section 260B: No Change, But Still Crucial
| Feature | Clause 366 (2025 Bill) | Section 260B (1961 Act) |
|---|---|---|
| Text | Identical | Identical |
| Applicability | Benches hearing appeals under new law | Benches hearing appeals under Sec. 260A |
| Objective | Resolve Bench disagreement | Resolve Bench disagreement |
| Legal Effect | Maintained | Already in force |
Where This Applies: ITAT and High Court Appeals
- Income Tax Appellate Tribunal (ITAT) benches occasionally refer matters to a third member when there’s a split decision.
- High Court Benches hearing tax appeals rely on the majority opinion, as clarified under Section 260B and now Clause 366.
Example:
In CIT vs. Pankaj Trivedi (Gujarat HC), a difference in views between judges on penalty under Section 271(1)(c) was resolved using the majority principle.
Practical Tip for Tax Professionals
If you’re tracking a High Court tax appeal, always check the Bench composition. In cases of dissent, expect a third judge reference or a majority-based ruling.
Also, advisory teams must align legal strategy with the reasoning of the majority view, since that becomes the binding precedent.
Why Was Clause 366 Included Again?
CBDT retained the clause to ensure legal continuity under the new tax regime. Although it may seem redundant, its presence:
- Removes ambiguity under the new Bill
- Aligns with judicial procedures
- Respects precedents and procedural law
Official Source for Reference
- Income-tax Bill, 2025 – Draft Text (Legislative Department)
- Section 260B of Income-tax Act, 1961 (incometaxindia.gov.in)
Summary
Clause 366 of the Income Tax Bill 2025 mirrors Section 260B of the current Act, ensuring that tax appeals heard by a Bench follow the majority decision when judges differ. This provision plays a critical role in avoiding judicial deadlock and maintaining procedural certainty.
FAQs
Q1. Is Clause 366 a new provision in the 2025 Bill?
No. It’s a restatement of Section 260B from the 1961 Act.
Q2. Who does Clause 366 apply to?
It applies to appellate benches in the High Court or any tribunal-like body interpreting tax appeals under the new Income-tax framework.
Q3. What happens if there is no majority?
If a third judge is needed to break the tie, courts usually follow internal rules to constitute a larger Bench.
Conclusion: Legal Continuity, Not Confusion
The majority decision clause under Clause 366 of the Income Tax Bill 2025 is not just legal boilerplate—it’s a procedural safeguard that keeps appellate tax litigation moving. It ensures fair resolution when judges disagree. For tax professionals, understanding this clause is critical to interpreting appeal outcomes.
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