ITAT Can’t Adjourn Matters Sine-Die Solely Due to Pending Appeal Without Stay: Delhi HC

The Delhi High Court has held that the Income Tax Appellate Tribunal (ITAT) cannot adjourn a matter sine-die solely on the ground that a similar case is pending before the High Court when no stay has been granted in that case. The Bench of Justice Dinesh Mehta and Justice Vinod Kumar has observed that there was no stay on the Tribunal’s earlier decision in the connected case. The ITAT should not have adjourned the matter sine-die solely because a similar appeal was pending. If it chose not to decide the matter immediately, it ought to have protected the petitioner’s interests. The bench described the situation as leading to “sheer wastage of time and energy” for both the Tribunal and the parties. The dispute arose after the ITAT had heard LIFE Trust’s appeal extensively on September 3, 2025, and reserved its order. However, on January 19, 2026, the Tribunal adjourned the matter sine-die, citing the pendency of a related appeal — ITA No. 30/2025 — before the High Court. That related appeal stems from the Tribunal’s ruling in the case involving Lakhmi Chand Charitable Society, where questions of jurisdiction and retrospective cancellation of trust registration under the Income Tax Act were raised. The High Court had admitted the appeal in that matter and framed substantial questions of law, including Whether the Principal Commissioner of Income Tax (Central) had jurisdiction to cancel registration under Sections 12AA and 12AB(4). Whether powers to cancel registration could vest in PCIT (Central) following transfer of jurisdiction under Section 127. Whether retrospective cancellation under Section 12AB(4) was permissible prior to its coming into effect in April 2022. However, no interim stay was granted in that appeal. Senior Advocate Chander Uday Singh, appearing for LIFE Trust, argued that once the Tribunal had reserved judgment, it was obligated to pronounce the order within the timeline prescribed under Rule 34(5)(c) of the Income Tax Appellate Tribunal Rules, 1963 — which provides for delivery within 60 days, extendable by 30 days. The petitioner contended that the Tribunal had already rejected its stay application. The indefinite adjournment exposed the Trust to coercive recovery proceedings. A similarly placed trust — Ram Charan Das Kishori Lal Charitable Trust — had been granted relief by another ITAT bench on November 12, 2025. The absence of an interim stay in the High Court’s related proceedings meant the Tribunal remained free to decide the appeal. The petitioner further argued that the delay caused serious prejudice and amounted to procedural unfairness. Representing the Income Tax Department, Special Counsel Zoheb Hossain contended that the time limit under Rule 34(5)(c) is directory and not mandatory, citing prior judicial precedents. He also emphasized that the High Court admitted the appeal in the Lakhmi Chand matter after the Tribunal’s November 12 ruling in the Ram Charan case, suggesting that subsequent legal developments justified caution. The High Court disagreed with the Tribunal’s approach. The Bench observed that mere admission of an appeal does not operate as a stay. The order under challenge in the related case had not been stayed. The Tribunal’s sine-die adjournment was legally unjustified. The petitioner’s grievance had been aggravated due to the delay. The Court stated that the Tribunal should either have proceeded to decide the matter or taken protective measures for the assessee. Calling the situation a “sheer wastage of time and energy” for both the Tribunal and the parties involved, the Court set aside the ITAT’s January 19, 2026 order to the extent that it adjourned the case indefinitely. Case Details Case Title: Legal Initiative For Forest And Environment Trust (Life Trust) Versus PCIT Citation: JURISHOUR-158-HC-2026(Del) Case No.: W.P.(C) 2342/2026, CM APPL. 11291-11292/2026 & CM APPL. 12599/2026 Date: 24.02.2026 Counsel For Appellant: Chander Uday Singh, Sr. Adv. Counsel For Respondent: Zoheb Hossain, SPL. Counsel Click Here To Read Order Read More: Lack of Reasoned Order on FTS Classification Invalidates 10% Tax Withholding; Delhi High Court Cuts Rate to 2%

ITAT Can’t Adjourn Matters Sine-Die Solely Due to Pending Appeal Without Stay: Delhi HC

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