ITAT Must Serve Order on Assessee | Not Just CA—Bombay HC

Case Details: Mrs. Neelam Ajit Phatarpekar v. Assistant Commissioner of Income-tax, Circle 2(1) - [2025] 176 taxmann.com 129

Judiciary and Counsel Details

• Bharati Dangre & Nivedita P. Mehta, JJ.
• Dharan Gandhi & Gaurang Panandiker, Advs. for the Applicant.
• Ms Susan Linhares, Sr. Standing Counsel & Ms Swati Wagh Kamat, Standing Counsel for the Respondent.

Facts of the Case

Assessee filed an appeal before the High Court of Bombay with a delay of 40 days. The delay in filing the appeal was caused because the assessee was not aware of the order passed by the ITAT until she was served with a recovery notice for the Assessment Year 2009-2010.

It was stated that a copy of the order against which the appeal was preferred was received by her Chartered Accountant, who had filed his affidavit categorically stating that he was unable to recollect if he had given copies to the assessee. The assessee applied for a certified copy of the order, which she received 40 days after receiving the recovery notice.

High Court Held

The High Court held that the assessee was permitted to be represented in any proceedings before any Income Tax Authorities or the Appellate Tribunal by an authorised representative, which would include a Chartered Accountant. However, from the specific provision in the form of Section 254, the intention of the Legislature can be clearly discerned that the decision of the Appellate Tribunal shall be communicated to the assessee and the Principal Commissioner/Revenue.

Section 354(3) has permitted a copy of the order to be served upon the authorised representative of the assessee. Still, it has stipulated explicitly that the copy of the order shall be sent to the “assessee”, who is permitted to file an appeal, being aggrieved by the order passed by the Appellate Tribunal, to the High Court.

Even Rule 35 cast a mandate on the Tribunal to communicate the order, after it is signed, to the assessee and the Commissioner and by use of the word “cause it to be” which clearly imply that the Tribunal shall ensure the communication of the order to the assessee by any mode of communication, the legislative intent is clear.

Thus, the statutory scheme places a burden on the Tribunal to ensure that the assessee is made aware of the order, so that, within 120 days as prescribed, they can file an appeal before the High Court. In the instant case, the authorised representative of the assessee filed an affidavit stating that he was unable to recall whether the copies were given to the assessee or his legal heirs in 2016.

Since the Tribunal of serving the copies of the order upon the assessee, who has adopted a specific stand before us that it is only upon receipt of the recovery notice, the assessee gained knowledge about the impugned order. Therefore, the delay in filing the appeal was to be condoned.

List of Cases Reviewed

• Sultanpur Kshetriya Gramin Bank v. Joint Commissioner of Income-tax [2012] 20 taxmann.com 800/[2011] 336 ITR 156 (Allahabad) (para 16) distinguished

List of Cases Referred to

• Smt. Sunita Ajit Patil v. ACIT [IT Appeal No.190 (PAN) of 2015, dated 28/06/2016] (para 2)
• Nandram Hunatram v. CIT [1959] 37 ITR 500 (Orissa) (para 8)
• DIT (International Taxation) v. Hyundai Heavy Industries Co. Ltd. [2018] 94 taxmann.com 208/256 Taxman 147/407 ITR 129 (Uttarakhand) (para 8)
• Sultanpur Kshetriya Gramin Bank v. Jt. CIT [2012] 20 taxmann.com 800/[2011] 336 ITR 156 (Allahabad) (para 8).