Section 260A: Service of the ITAT’s order on an assessee’s authorized representative (CA) does not constitute valid service on the assessee

General
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Case note based on the judgment in Neelam Ajit Phatarpekar vs Assistant Commissioner of Income Tax (Bombay High Court, Goa Bench) dated 23rd June 2025:

Case Note: Neelam Ajit Phatarpekar vs ACIT (Bombay High Court at Goa)

Court: Bombay High Court (Goa Bench)
Coram: Justices Bharati Dangre and Nivedita P. Mehta
Date of Judgment: 23rd June 2025
Case Nos.: Misc. Civil Applications No. 491 & 492 of 2024 in Tax Appeals Nos. 2756 & 2754 of 2024

Parties:

  • Applicants:

    • Mrs. Neelam Ajit Phatarpekar (Assessee)
    • Legal heirs of Late Mr. Ajit Phatarpekar (through Mrs. Neelam Phatarpekar and her son)

  • Respondent:

    • Assistant Commissioner of Income Tax, Circle 2(1), Panaji

Facts:

  1. The Applicants sought condonation of a 40-day delay in filing two tax appeals under Section 260A of the Income Tax Act, 1961.
  2. The appeals challenged an ITAT order dated 14.09.2016, which reversed the relief granted to the Applicants by the CIT(A) for AY 2009–2010.
  3. The husband, Mr. Ajit Phatarpekar, passed away during the pendency of the Tribunal proceedings (02.04.2016).
  4. Mrs. Neelam Phatarpekar claimed she only became aware of the Tribunal’s order in April 2024 upon receipt of a recovery notice, after which she applied for the certified copy and filed the appeal.

Respondent’s Objection:

  • The Revenue argued that the delay was actually 2961 days, not 40 days, since the Applicants’ Chartered Accountant, Shri S.P. Bhandare, had received the Tribunal’s order on 20.09.2016.
  • The Revenue contended that service on the authorized representative (CA) amounted to service on the assessee.

Key Legal Issues:

  1. Does service of the ITAT’s order on an assessee’s authorized representative (Chartered Accountant) constitute valid service on the assessee for the purpose of Section 260A?
  2. Should the delay in filing the appeal be condoned under Section 260A(2A)?

Court’s Observations:

  • Statutory Interpretation:

    • Section 254(3) and Rule 35 of the Income Tax (Appellate Tribunal) Rules mandate that the order must be communicated to the assessee.
    • Section 288 permits representation by CAs, but does not authorize them to receive service of final orders on behalf of the assessee.

  • Distinguished from Case Law:

    • The Court disagreed with the Allahabad High Court decision in Sultanpur Kshetriya Gramin Bank v. JCIT where service on a lawyer was held sufficient.
    • It relied instead on Nandram Hunatram v. CIT (Orissa High Court), which held that without express authorization to receive orders, service on legal counsel does not equate to service on the assessee.

  • Factual Finding:

    • The Chartered Accountant affirmed he could not recall if he ever handed over the order to the assessee.
    • The Applicant’s claim of ignorance until April 2024 was found credible.

Decision:

  • The High Court condoned the 40-day delay, holding that:

    • The Tribunal failed to ensure service of the order on the assessee as required by law.
    • The delay was bona fide and justified.
    • Appeals are to be heard on merits.

Order:

  • Delay of 40 days condoned.
  • Tax Appeal Nos. 2754 and 2756 of 2024 to be listed for hearing.