Tribunal Cannot Adjourn Appeal Sine Die Merely Because Substantial Questions of Law are Pending in High Court

The Petitioner Trust filed an appeal before the Income Tax Appellate Tribunal (ITAT) against an order regarding its registration.

The ITAT heard extensive arguments on additional jurisdictional issues and reserved its judgment on 03.09.2025.

On 19.01.2026, instead of delivering the judgment, the ITAT adjourned the matter *sine die*.

This adjournment was based on the fact that the High Court, in an unrelated but identical matter (*ITA No. 30/2025, PCIT v. M/s Lakhmi Chand Charitable Society*), had framed substantial questions of law regarding the jurisdiction of PCIT (Central) to cancel registrations.

The Petitioner approached the High Court under Article 226 seeking a direction for the ITAT to decide the appeal expeditiously, noting that no stay had been granted by the High Court in the *Lakhmi Chand* case.

Whether the ITAT was legally justified in adjourning the Petitioner’s appeal *sine die* solely because a similar issue was pending before the High Court in another case, despite no interim stay being in operation?

Whether the timeline for delivering judgments prescribed under the ITAT Rules is mandatory or directory?

The Court considered Rule 34(5)(c) of the Income Tax Appellate Tribunal Rules, 1963, which stipulates that the Tribunal should ordinarily deliver a judgment within sixty to ninety days of hearing.

The Court applied the principle that the mere admission of an appeal by a higher court against a precedent does not operate as a stay on proceedings in other similar matters unless an express stay order is granted.

The Court also exercised its supervisory jurisdiction under Article 226 of the Constitution of India to ensure the exhaustion of statutory remedies without undue delay.

The Court deprecated the conduct of both parties for unnecessarily burdening the record with hundreds of pages for a "trivial issue".

It observed that the ITAT had already concluded hearings and reserved the order; thus, adjourning the matter *sine die* after the reservation of judgment caused "serious adverse consequences" and "sheer wastage of time".

The Bench reasoned that because the High Court had not stayed the operation of the ITAT’s order in the *Lakhmi Chand* case, the ITAT remained obligated to decide the Petitioner's appeal on its own merits.

The Court found the ITAT's approach of waiting for the outcome of *ITA No. 30/2025*—while the Petitioner’s stay application had already been rejected—to be legally unjustified.

The Court held that the pendency of an appeal in the High Court, without a stay, is not a valid ground for the Tribunal to freeze proceedings.

The ITAT was directed to list the matter on 10.03.2026 and decide the appeal (No. 3241/Del/2023) on its merits within two months thereafter.

No findings were recorded on the merits of the underlying tax dispute.