'Revenue Blocked': Punjab & Haryana HC Flags Delay In Deciding Appeals By Tax Appellate Authorities, Asks For Reasons For Delays Beyond 1 Yr

The Punjab & Haryana High Court flagged the delay in deciding appeals by Tax Appellate Authorities, observing that Appellate Authorities should endeavour to dispose of the appeals, preferably within one year as per the provisions of the Income Tax Act, 1961.

Justice Arun Palli and Justice Sudeepti Sharma said, "Considering that substantial amount of revenue is involved in these appeals, and that such amount remain blocked during the pendency of the proceedings, it is imperative that the Appellate Authorities should endeavour to dispose of the appeals, preferably within one year as per the provisions of the Act."

Speaking for the bench, Justice Sudeepti Sharma said that where disposal within the period of one year is not done, the reasons for such delay must be explicitly recorded in the zimni orders "so as to reflect whether the delay is attributable to the assessee or the department/revenue. Then also efforts should be made to decide the appeals maximum within a period of two years."

The bench noted that ca onsiderable number of writ petitions are being filed before the High Court seeking directions for the expeditious disposal of appeals under the Income Tax Act, 1961.

"This indicates an inordinate delay in adjudication at the appellate level, which defeats the objective of Section 250 (6A) of the Income Tax Act, 1961," added the Court.

These observations were made while hearing the plea seeking direction to the Commissioner of Income Tax-3 (Appeals), to decide the petitioner's appeal preferred by the petitioner in 2020 in a time-bound manner.

Perusing the records, the Court pointed out that the petitioner filed an appeal against the assessment order dated 30.12.2019 for the assessment year 2018-2019 on 09.01.2020, i.e. almost 5 years back and "till date, there is no progress in the proceedings."

The bench referred to Section 250 of the Income Tax Act and observed that the provision states "that the intention of the legislature since it has been specifically mentioned that in every appeal, the Joint Commissioner (Appeals) or the Commissioner (Appeals), as the case may be, where it is possible, may hear and decide such appeal within a period of one year from the end of the financial year in which such appeal is filed before him."

It is evident that although the expression “where it is possible” has been used, the intent of the legislature unequivocally is in favour of time-bound disposal of appeals, it added.

The Court also noted in recent orders passed by the High Court, it was observed that, "the appeal was filed in the year 2015 i.e. almost about 10 years back and was not decided, which forced the petitioner therein to file CWP No. 6388 of 2025, where this Court was constrained to issue directions for disposal of the appeal that had been pending for nearly a decade within a period of six months."

While noting that in the present case the appeal was filed in the year 2020 i.e. 5 years back and till date, "there is no progress," the Court directed the Commissioner of Income Tax-3 (Appeals), to decide the appeal filed by the petitioner within a period of three months from the date of receipt of copy of the order.

Mr. Sanjay Bansal, Sr. Advocate, with Mr. Sachit Singla, Advocate, and Mr. Gurdeep Singh, Advocate, for the petitioner.

Mr. Vaibhav Gupta, Standing Counsel, for the respondents-Income Tax Department.

Title: KULWINDER PAUL SINGH v. THE CENTRAL BOARD OF DIRECT TAXES AND OTHERS

Click here to read/download the order