End to Endless Delays: Bombay High Court Enforces 90-Day Limit on Income Tax Tribunals
Bench Directs All ITAT Benches Across India to Adhere Strictly to Statutory Timelines
Shocked Judicial Conscience Sparks Nationwide Reform Over Repeated Re-Hearings
By Legal Editor
New Delhi: August 04, 2026:
The administration of tax justice in India faces a critical turning point as judicial enforcement intersects with administrative compliance. In an unprecedented move, the Division Bench of the Bombay High Court—led by Acting Chief Justice Ravindra V. Ghuge and Justice Gautam A. Ankhad—expressed severe displeasure over the recurring failure of the Income Tax Appellate Tribunal (ITAT) to pronounce reserved judgments within the statutory timelines prescribed by law. The decision highlights a long-standing procedural flaw within tribunal adjudication, where matters reserved for orders are released after months of silence, forcing taxpayers and legal counsel into endless cycles of re-arguments.
At the heart of the dispute lies Rule 34 of the Income-Tax (Appellate Tribunal) Rules, 1963. Sub-rule (5) explicitly stipulates that when a tribunal bench concludes a hearing without immediately pronouncing an order, every endeavour must be made to pronounce the judgment within 60 days. In extraordinary circumstances, an extension of up to 30 days is permitted, capping the total outer timeline at 90 days. Despite these statutory bounds, instances where matters were repeatedly reserved, kept pending beyond 90 days, and subsequently "released" back into the list for fresh hearings have plagued litigants.
Expressing shock that its "judicial conscience" was profoundly unsettled, the High Court issued directives prohibiting the arbitrary release of reserved cases and issued general direction nationwide implementation of Rule 34.
The Anatomy of Delay: A Case Study in Litigative Fatigue
The writ petition that triggered this intervention was filed by a Mumbai-based taxpayer, Rajesh R. Hemrajani. The history of the taxpayer’s appeal before the Mumbai Bench of the ITAT serves as a classic illustration of administrative paralysis:
First Round of Arguments: The appeal was originally argued and reserved for judgment on July 1, 2025, before a bench comprising Judicial Member Rahul Chaudhary and Accountant Member Vikram Singh Yadav. No order was delivered. Upon completion of the statutory 90-day period, the matter was released on October 7, 2025, without an order.
Second Round of Arguments: The appeal was re-listed before a reconstituted bench led by Justice (Retd.) C. V. Bhadang (President of the ITAT) and Accountant Member Vikram Singh Yadav. Arguments concluded and the matter was reserved on November 26, 2025. Once again, no judgment was pronounced within the stipulated limit, leading to its release on February 27, 2026.
Third Round of Arguments: The matter was presented before a third bench comprising Judicial Member Beena Pillai and Accountant Member Arun Khopdia, concluding on May 13, 2026.
Facing the prospect of the 90-day window expiring once more on August 13, 2026, without a judgment, the taxpayer approached the Bombay High Court seeking injunctive relief. Counsel representing the Income Tax Department acknowledged before the High Court that such occurrences were not isolated, confirming that matters frequently undergo three to four rounds of full hearings before an order is issued.
Key Statutory Provisions and Judicial Precedents
ITAT Hearing Concludes
│
▼
┌─────────────────────────┐
│ Target: Within 60 Days │ (Rule 34(5)(c) Standard Limit)
└───────────┬─────────────┘
│
▼ (If Extraordinary Circumstances Exist)
┌─────────────────────────┐
│ Outer Limit: 90 Days │ (Strict Exception Limit)
└───────────┬─────────────┘
│
▼
┌─────────────────────────┐
│ Mandatory Pronouncement │ (Release without judgment prohibited)
└─────────────────────────┘
The judgment reinforces statutory compliance under multiple direct tax procedural frameworks:
Rule 34(5) of ITAT Rules, 1963: Governs the procedural framework for pronouncements. Sub-clause (a) allows immediate oral pronouncement; sub-clause (b) mandates fixing a specific date; and sub-clause (c) sets the standard 60-day limit, expandable only to 90 days under exceptional circumstances.
Section 255(5) of the Income Tax Act, 1961: Grants power to the Appellate Tribunal to regulate its own procedure. The High Court clarified that statutory delegation of procedure does not confer arbitrary discretion to ignore procedural timelines intended to safeguard natural justice.
The Shivsagar Veg Restaurant Mandate: The 90-day outer limit was codified into Rule 34 pursuant to directions issued by the Bombay High Court in Shivsagar Veg Restaurant v. ACIT (2009). The court established that delayed judgments erode public trust, lead to memory fade regarding oral arguments, and increase litigation costs.
The Division Bench directed the Prothonotary and Senior Master of the High Court to send copies of the judgment to every ITAT bench operating across India, establishing a mandatory directive for compliance.
Frequently Asked Questions (FAQ)
Searchable Index Format
Questions & Answers
Q1: What is the primary timeframe within which the ITAT must pronounce its judgment after a hearing?
Under Rule 34(5)(c) of the Income-Tax (Appellate Tribunal) Rules, 1963, every endeavour must be made by the bench to pronounce the order within 60 days from the date on which the hearing of the case concluded.
Q2: Can the 60-day timeline be extended by the tribunal?
Yes, but only under exceptional and extraordinary circumstances. If such grounds exist, the bench may fix a future date for pronouncement, provided the total period does not exceed 90 days from the conclusion of the hearing.
Q3: What occurs if a judgment is not delivered within the 90-day period?
Historically, tribunals released reserved matters, requiring a new bench to hear arguments again. However, following the Bombay High Court's ruling, benches are prohibited from arbitrarily releasing matters without judgment and are mandated to deliver orders within the 90-day outer limit.
Q4: Does the ruling apply only to ITAT benches within Maharashtra?
No. The Bombay High Court issued general directions applicable to all ITAT Benches across India. The court ordered its Prothonotary and Senior Master to circulate the order to all tribunal locations nationwide to ensure uniform procedural compliance.
Q5: What legal authority gives tribunals the power to frame these timelines?
The ITAT frames its rules under Section 255(5) of the Income Tax Act, 1961. The 90-day maximum limit under Rule 34 was formally incorporated following the judicial precedent set by the High Court in Shivsagar Veg Restaurant v. ACIT.
Topic — Primary Rule / Act — Core Subject
Pronouncement Timelines — Rule 34(5)(c), ITAT Rules 1963 — Standard & Outer Limits
Consequences of Delay — Judicial Directives — Mandate Against Re-hearings
Exceptional Circumstances — Rule 34(5)(c) Proviso — Conditions for Extension
Jurisdictional Reach — Article 226, Constitution of India — Applicability to All Benches