Serving Order On Chartered Accountant Not Service On Assessee | Bombay High Court Condones Delay In Tax Appeals
Sanchayita Lahkar
The High Court of Bombay at Goa Division Bench of Justice Bharati Dangre and Justice Nivedita P. Mehta held that service of an Income Tax Appellate Tribunal order on an assessee’s Chartered Accountant does not constitute valid service upon the assessee under the statutory scheme. The court directed condonation of a 40-day delay in filing two tax appeals, allowing the matters to proceed on merits. The bench determined that the Tribunal had a statutory obligation to serve the assessee directly, and the delay was justified as the assessee only became aware of the order upon receiving a recovery notice years later.
The applications before the court sought condonation of delay in instituting two tax appeals against an order of the Income Tax Appellate Tribunal (ITAT), Panaji Bench, dated 14 September 2016. The first application was filed by an individual assessee, and the second by her as legal heir of her late husband, also an assessee. The assessees had earlier succeeded in appeals before the Commissioner of Income Tax (Appeals) for the Assessment Year 2009-10. The Revenue challenged this before the ITAT, which allowed the Revenue's appeals, set aside the appellate orders, and restored the assessment order.
During the pendency of the ITAT proceedings, one of the assessees passed away on 2 April 2016. The assessee’s Chartered Accountant represented the matter before the ITAT, and the Tribunal issued its order on 14 September 2016. The ITAT’s endorsement showed two copies of the order were received by the Chartered Accountant on 20 September 2016. The assessee contended she was unaware of the order until April 2024, when a recovery notice was served for the relevant assessment year. She then applied for a certified copy, received on 17 May 2024, and filed the appeals within 40 days thereafter.
The Revenue opposed, asserting the delay was 2961 days, contending the Chartered Accountant was the assessee’s authorised representative and receipt by him amounted to valid service. An affidavit from the Chartered Accountant, dated 17 June 2025, stated he could not recall whether he handed over the copies to the assessee or her family in 2016, and acknowledged that at the time she was grieving her husband's death.
The court considered statutory provisions including Section 260A of the Income Tax Act, prescribing a 120-day limitation from the date the order is "received by the assessee"; Section 254(3) requiring the ITAT to send a copy of its order to the assessee and the Commissioner; Section 288 defining authorised representatives; Rule 35 of the Income-tax (Appellate Tribunal) Rules, 1963 mandating the Tribunal to communicate orders to the assessee; and provisions of the Code of Civil Procedure regarding service.
The court recorded: "Upon the order being passed under Section 254 by the Appellate Tribunal, it shall send a copy of the order to the assessee and even the Rules make it imperative for the Tribunal, after the order is signed to cause it to be communicated to the assessee and to the Commissioner."
The bench further stated: "We, however, disagree with the said proposition [that service on the Chartered Accountant is akin to service on the assessee]... intention of the Legislature can be clearly discerned that the decision of the Appellate Tribunal shall be communicated to the assessee and to the Principal Commissioner/Revenue."
On the Allahabad High Court’s decision in Sultanpur Kshetriya Gramin Bank, the court observed: "We are unable to subscribe to the view expressed above... The Chartered Accountant definitely do not act as an agent of the assessee but he represent the assessee in the proceedings before the Income Tax Officer/Appellate Authority and there is no specific authorisation to a Chartered Accountant as it may be in case of a lawyer."
The court relied on Orissa High Court precedent holding that without express authorisation, receipt of an order by a lawyer could not be the limitation start date.
The bench recorded: "Service upon the Chartered Accountant do not absolve the Tribunal of serving the copies of the order upon the assesse... As the Applicant had no knowledge of passing of the impugned order, only on receipt of the certified copy of the same, she has preferred the Appeals."
The court held that the applicants had justified the delay, stating: "We are convinced with the justification of the Applicant that she was unaware of the impugned order being passed on 14.09.2016 until April 2024 when she was served with the recovery notice for the Assessment Year 2009-2010, thereafter steps were taken by her so as to institute the appeals against the said order which is filed beyond the period of limitation prescribed under Section 260(A)."
Accordingly, the court directed: "The applications are, therefore, made absolute in terms of the prayer clauses by condoning the delay of 40 days from the date of receipt of the impugned order."
The bench further ordered: "The Tax Appeal No. 2754 of 2024 (Filing) and Tax Appeal No.2756 of 2024 (Filing) are directed to be listed for hearing."
Advocates Representing the Parties:
For the Applicants: Mr Dharan Gandhi, Advocate with Mr Gaurang Panandiker, Advocate
For the Respondents: Ms Susan Linhares, Senior Standing Counsel with Ms Swati Wagh Kamat, Standing Counsel
Case Title: Mrs. Neelam Ajit Phatarpekar v. The Assistant Commissioner of Income Tax, Circle 2(1), Panaji & connected matter
Neutral Citation: 2025:BHC-GOA:1087-DB
Case Number: MCA No. 491 of 2024 in Tax Appeal No. 2756 of 2024 (Filing) and MCA No. 492 of 2024 in Tax Appeal No. 2754 of 2024 (Filing)
Bench: Justice Bharati Dangre and Justice Nivedita P. Mehta
