Limitation For ITAT Rectification Runs From Date Of Receipt Of Order, Not Date Of It's Passing: Bombay High Court
The Bombay High Court has held that the limitation period for filing a rectification application under Section 254(2) of the Income Tax Act begins when the assessee receives the ITAT order, and not merely from the date on which the order is passed. The Court ruled that the Income Tax Appellate Tribunal (ITAT) had completely misdirected itself in rejecting a rectification plea by Accost...
The Bombay High Court has held that the limitation period for filing a rectification application under Section 254(2) of the Income Tax Act begins when the assessee receives the ITAT order, and not merely from the date on which the order is passed. The Court ruled that the Income Tax Appellate Tribunal (ITAT) had completely misdirected itself in rejecting a rectification plea by Accost Media LLP as time-barred.
A Division Bench of Justice B.P. Colabawalla and Justice Amit S. Jamsandekar delivered the ruling while hearing a writ petition filed by the assessee Accost Media Ltd., challenging the order of the ITAT refusing to entertain a rectification application.
The case in hand related to whether the assessee's rectification application under Section 254(2) was filed within the limitation period. The ITAT had rejected the application as time-barred by counting six months from the date the order was passed. However, the assessee argued that it could not file any rectification plea until it actually received a copy of the order.
The issue was whether limitation should run from the date of passing the ITAT order or from the date the order was communicated to and received by the assessee.
The Bombay High Court held that limitation begins from the date of receipt, making the application timely.
However, the Tribunal dismissed the application as being beyond six months “from the end of the month in which the order was passed,” treating the limitation as expired.
Aggrieved, the assessee preferred a writ petition before the High Court.
The Bench observed that the Limitation starts from date of communication of the order holding that the ITAT failed to consider the scheme of Rule 34A of the ITAT Rules (Rectification Applications), Rule 9 of the ITAT Rules (Appeals Procedure) and Section 254(3) of the Income Tax Act (mandatory communication of ITAT orders)
Section 254(3) of the Act states that the Appellate Tribunal shall send a copy of any order passed under this section to the assessee and to the Principal Commissioner or Commissioner.
The Bench emphasized that an assessee cannot file a rectification application without receiving a certified copy of the order.
The Court relied on two Delhi High Court judgments Golden Times Services (P) Ltd v. DCIT [(2020) 113 taxmann.com 524 (Delhi)] and Pacific Projects Ltd v. ACIT [(2021) 125 taxmann.com 94(Delhi)] wherein it was held that limitation under Section 254(2) cannot run against a party who has not yet received or had knowledge of the order.
In view of the above, the Court allowed the writ in favour of the assessee.
Case Title: Accost Media LLP Vs. Deputy Commissioner of Income Tax, Circle 27(1), Mumbai & Ors.
Case No: Writ Petition(L) No. 35160 of 2025
Appearance for Petitioner: Mr. P. J. Pardiwalla, Senior Counsel a/w Gunjan Kakkad i/b Mind and Confreres
Appearance for Respondents: Mr. Arjun Gupta