High Court criticizes ITAT’s disregard of judicial directions; directs fresh disposal of appeal on merits
Meetu Kumari | Jun 25, 2025 |
Shocking! HC Sets Aside ITAT Order for Gross Judicial Misconduct
The appellant, a 100% export-oriented unit engaged in software exports, had claimed a deduction under Section 10B of the Income Tax Act for the assessment year 2007–08. However, the claim was denied. Although the appellate authority allowed an alternative deduction under Section 10A for the assessment year 2008–09, it rejected the same for 2007–08. The assessee then appealed to the Income Tax Appellate Tribunal, which dismissed the appeal for non-prosecution.
The assessee claimed that they had not received the hearing notice and filed a restoration application, which was also dismissed as delayed. The assessee then filed a writ petition before the Single Judge, which was dismissed despite the Tribunal’s duty under Section 254 read with Rule 24 to hear the appeal on its merits. On further appeal, a Division Bench restored the appeal and directed the ITAT to hear and dispose of it on its merits within six months.
ITAT’s Decision: The Tribunal, while deciding the appeal rather than rendering a decision on the merits of the case, rejected it once more, this time stating that the delay of the condonation argument was without merit.
Main Issue before the HC: Can the ITAT dismiss an appeal again for delay without a hearing on merits, even after a High Court has remanded the case specifically for such a hearing?
HC’s Ruling: The Court, expressing clear disapproval, held that the ITAT had shown blatant disregard for its earlier directions. It held that the Tribunal’s action in reviving and deciding a delay condonation application that had not been restored, without touching the merits of the appeal, amounted to judicial indiscipline. The Court stated that the conduct of the Bench was not befitting a quasi-judicial body. The impugned ITAT order dated 18.03.2025 was set aside. The Court directed the ITAT to restore ITA No. 375/COCH/2016 and pass a reasoned order on merits within two months. To highlight the significance of such conduct and further directs the Registrar to forward a copy of this judgment to the President of the ITAT to ensure such incidents do not recur.
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