Bombay High Court Raps ITAT for Breaching 90-Day Deadline

• Bombay High Court directed ITAT to adhere strictly to 90-day deadline for pronouncing decisions.
• Court expressed shock at repeated delays by ITAT, which may lead to further litigation and delays.
• Rule 34 of the Income Tax (Appellate Tribunal) Rules, 1963 prescribes a 90-day outer limit for pronouncing decisions.
• Non-compliance with Rule 34 deadline may result in further litigation and delays in resolving tax disputes.
• Lawyers and compliance officers should ensure clients are aware of the 90-day deadline to prevent delays.

A division bench of the Bombay High Court, comprising Acting Chief Justice Ravindra Ghuge and Justice Gautam Ankhad, passed an order on July 31, addressing repeated delays by the Income Tax Appellate Tribunal (ITAT) in pronouncing orders. The court was hearing a petition filed by Rajesh R Hemrajani, a Mumbai-based litigant, whose appeal had been fully argued thrice but remained undecided despite being released twice after the statutory period for pronouncement expired.

The High Court expressed shock at the information, stating that it cannot be countenanced that a matter closed for judgment is released without a decision when Rule 34 of the ITAT Rules mandates a decision within 90 days. The court noted that litigants would not tolerate the rigors of litigation if appeals were released on multiple occasions.

In the present case, the appeal had been finally argued on the third occasion, and the timeline for pronouncement was about to expire. The High Court took a serious note of this aspect, directing all benches of ITAT to strictly adhere to the 90-day outer limit prescribed by Rule 34.

The Bombay High Court's order is significant in light of Rule 34 of the Income Tax (Appellate Tribunal) Rules, 1963, which prescribes a 90-day outer limit for pronouncing decisions. The court's direction to ITAT benches to adhere strictly to this deadline underscores the importance of timely disposal of appeals.

The order also highlights the potential consequences of non-compliance with Rule 34. If ITAT fails to pronounce orders within the stipulated timeframe, it may lead to further litigation and delays in the resolution of tax disputes.

In recent years, there have been instances of ITAT delaying pronouncements, which has led to criticism from litigants and legal experts. The Bombay High Court's order is a stern reminder to ITAT of its obligation to adhere to the prescribed deadline.

The Bombay High Court's order has significant implications for lawyers and compliance officers handling tax appeals. With the court emphasizing the importance of timely disposal of appeals, it is essential for these professionals to ensure that their clients are aware of the 90-day deadline under Rule 34.

Non-compliance with this deadline may lead to further litigation and delays in resolving tax disputes. As a result, lawyers and compliance officers should closely monitor ITAT's pronouncements and take necessary steps to prevent delays in tax appeals.

The order also underscores the need for ITAT to improve its internal processes and ensure that decisions are pronounced within the stipulated timeframe. This will not only reduce litigation but also promote efficiency in the disposal of tax appeals.

Lawyers and compliance officers should watch for potential delays in tax appeals and ensure their clients are aware of the 90-day deadline under Rule 34, as non-compliance may lead to further litigation.

Source: Original reporting via Bar and Bench