Bombay High Court Pulls Up ITAT Over Failure To Pronounce Reserved Judgments Within 90-Day Deadline

The Bombay High Court has pulled up the Income Tax Appellate Tribunal (ITAT) over the repeated practice of releasing matters reserved for judgment without pronouncing orders.

A Division Bench of Acting Chief Justice Ravindra V. Ghuge and Justice Gautam A. Ankhad observed that Rule 34(5)(c) of the Income Tax (Appellate Tribunal) Rules, 1963, requires the tribunal to pronounce its judgment within 60 days of concluding the hearing and, in exceptional circumstances, within a further period of 30 days.

Expressing shock over repeated departures from the rule, the bench remarked:

"Our judicial conscience is shocked by the above stated information. It cannot be countenanced that a matter closed for judgment, is released without a judgment even when Rule 34 mandates a decision within 90 days. How far would the litigants tolerate the rigours of litigation, when a Appeal is released on multiple occasions."

The bench was hearing a petition filed by a taxpayer whose appeal before the ITAT had been heard and reserved for judgment three times. On two occasions, however, the tribunal released the matter without pronouncing judgment, requiring the taxpayer to argue the appeal afresh each time.

Counsel for the taxpayer submitted that the appeal was first heard by a bench comprising Judicial Member Rahul Chaudhary and Accountant Member Vikram Singh Yadav, which reserved judgment on July 1, 2025.

As no order was pronounced within the timeline prescribed under Rule 34 of the Income Tax (Appellate Tribunal) Rules, 1963, the appeal was released on October 7, 2025.

The appeal was then heard afresh by another bench comprising President Justice (Retd.) C.V. Bhadang and Accountant Member Vikram Singh Yadav, which reserved judgment on November 26, 2025. That bench also did not pronounce its judgment within 90 days, following which the matter was released on February 27, 2026.

The matter was subsequently heard for a third time by a bench comprising Judicial Member Beena Pillai and Accountant Member Arun Khopdia, which reserved judgment on May 13, 2026. Apprehending that the appeal would once again be released without a decision after the expiry of the 90-day period on August 13, 2026, the taxpayer approached the high court. During the hearing, counsel appearing for the Income Tax Department submitted that there had been instances where matters were closed for judgment and released even three or four times.

Taking serious note of the issue, the bench directed the tribunal to deliver its judgment in the taxpayer's appeal on or before August 13, 2026. It also directed the taxpayer and the Income Tax Department to place a copy of the order downloaded from the Bombay High Court's official website before the tribunal.

The court also issued general directions to all ITAT Benches to strictly comply with Rule 34. It directed that whenever a matter is heard and closed for judgment, the tribunal must also fix a date for pronouncement within 60 days. Where exceptional or extraordinary circumstances justify additional time, the judgment must nevertheless be delivered on or before the 90th day.

The bench further directed the prothonotary and senior master of the Bombay High Court to circulate the order to all Income Tax Appellate Tribunals for compliance.

For Petitioner: Dr. Dhruv Janssen Sanghavi, along with Mr. Anirudh Srinivasan, is instructed by Prajyot Sawardekar.

For Respondent No. 2: Mr. Subir Kumar along with Ms. Ashita Aggarwal