File Rectification Application Before ITAT Within 6 Months: Bombay High Court

The Bombay High Court has held that the six-month period for filing a rectification application before the Income Tax Appellate Tribunal (ITAT) under Section 254(2) must be reckoned from the date on which the order sought to be rectified is communicated to the assessee, and not merely from the date on which the order is passed. The Bench of Justice B. P. Colabawalla and Justice Amit S. Jamsandekar has observed that an assessee cannot reasonably be expected to file a rectification application before being served with the Tribunal’s order. Section 254(3) of the Income Tax Act mandates that the Tribunal shall send a copy of its order to the assessee and the Commissioner, reinforcing the importance of communication of the order. The controversy arose from an ITAT order dated 10 December 2024. According to the petitioner, a copy of this order was received only on 24 March 2025. Thereafter, on 16 July 2025, the assessee filed a miscellaneous application under Section 254(2) seeking rectification of the ITAT’s order. However, the Tribunal registry raised an objection that the application was delayed by 15 days, calculating the limitation period from the date of the original order. Eventually, by an order dated 13 October 2025, the ITAT rejected the rectification application solely on the ground of limitation. Aggrieved by this decision, the assessee approached the Bombay High Court, contending that it was impossible to seek rectification without first receiving a copy of the order and that limitation could not begin to run prior to such communication. The High Court examined Section 254 of the Income Tax Act along with Rules 34A and 9 of the Income Tax (Appellate Tribunal) Rules, 1963. It noted that an application for rectification under Section 254(2) must be accompanied by copies of the order sought to be rectified, at least one of which must be a certified copy. The Court concluded that the limitation period for filing a rectification application necessarily begins from the date on which the order is communicated to the assessee, as actual or constructive knowledge of the order is essential for exercising the statutory remedy. The Bombay High Court relied heavily on earlier judgments of the Delhi High Court in Golden Times Services (P) Ltd v. DCIT and Pacific Projects Ltd v. ACIT. In these cases, the Delhi High Court had held that a rigid interpretation of limitation starting from the date of the order, irrespective of its communication, would lead to absurd and unjust results by rendering statutory remedies illusory. The Bench agreed with this reasoning, observing that an interpretation which deprives an aggrieved party of a meaningful opportunity to seek rectification cannot be sustained in law. The ITAT had relied on a previous Bombay High Court decision in Leena Power Tech Engineers (P) Ltd v. DCIT to reject the rectification application as time-barred. However, the Bench clarified that the issue in that case was entirely different and pertained to exclusion of limitation during the COVID-19 period pursuant to Supreme Court directions. Since the question of limitation commencing from the date of communication of the ITAT order was neither argued nor decided in that case, the High Court held that the Tribunal’s reliance on it was misplaced. While holding that the ITAT had clearly erred in treating the rectification application as time-barred, the High Court chose not to remand the matter back to the Tribunal. This was because the assessee had already filed an income tax appeal challenging the original ITAT order. The Court disposed of the writ petition with a clarification that all grounds raised by the assessee on merits in the rectification proceedings would remain open and could be urged in the pending appeal against the original ITAT order. No order as to costs was passed. Case Details Case Title: Accost Media LLP Versus DCIT Case No.: Writ Petition (L) No.35160 Of 2025 Date: 01/12/2025 Counsel For Appellant: P. J. Pardiwalla, Senior Counsel a/w Gunjan Kakkad i/b Mind and Confreres Counsel For Respondent: Arjun Gupta, Advocate Click Here To Read Order Read More: DRT Lacks Jurisdiction in Personal Guarantor Insolvency Once CIRP Is Pending; Bombay HC Orders Transfer to NCLT

File Rectification Application Before ITAT Within 6 Months: Bombay High Court

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