Bombay HC Condonates 88-Day Tax Appeal Delay, Says Limitation Runs From Receipt Of ITAT Order Copy, Not Pronouncement

The Applicant/Appellant sought condonation of an 88-day delay in filing an income-tax appeal against the ITAT’s order dated 22 October 2024, which remanded the issue of exemption of long-term capital gains to the Assessing Officer for consideration.

The Applicant stated that it received the signed copy of the ITAT order on 27 February 2025; after initially considering a miscellaneous application under Section 254(2) of the Income Tax Act, it decided to appeal and filed the appeal on 23 September 2025.

The Revenue opposed condonation, arguing that the Applicant knew of the order when it was pronounced and had not sufficiently explained the delay.

Section 254(3) of the Income Tax Act requires the Appellate Tribunal to send a copy of its order to the assessee and the Principal Commissioner or Commissioner; Rule 35 of the Income Tax (Appellate Tribunal) Rules, 1963 provides for communication of the signed order to the parties, while Rule 49 addresses copying fees.

The Court held that, in this procedural context, limitation begins when the aggrieved party receives the order, rather than merely when the order is pronounced.

Under Section 5 of the Limitation Act, delay may be condoned upon proof of sufficient cause, assessed in light of the circumstances of the case.

Maniben Devraj Shah v. Municipal Corporation of Brihan Mumbai, Civil Appeal Nos. 2970–2971 of 2012, decided 9 April 2012, states that the bona fides of the explanation are central: delay may be condoned where there is no negligence and the explanation is bona fide, but not where it is concocted or the applicant is thoroughly negligent.

The Court rejected the Revenue’s contention that limitation ran from pronouncement, reasoning that the statutory and procedural framework contemplated communication of the order to the parties and that the reasons in the order were needed to decide whether and how to appeal.

The envelope showed that the ITAT dispatched the order on 25 February 2025 and the Applicant received it on 27 February 2025; the Court therefore reckoned limitation from receipt, finding that it expired on 27 June 2025.

The Applicant gave a stage-wise account of its consideration of a miscellaneous application, decision to appeal, preparation of papers, and filing; the Court found that the explanation covered the period of delay and that no irreversible or irreparable prejudice to the Revenue had been shown.

It allowed the Interim Application, condoned the delay, directed removal of any office objections within eight weeks, and ordered that the appeal be listed for admission thereafter; there was no order as to costs.