CA Only Acts as AR, not Automatically Entitled to Receive ITAT Orders Behalf of Assessee Without Specific Authorisation: Bombay HC [Read Order]

In a recent ruling, the Bombay High Court at Goa held that a Chartered Accountant who appears before the Income Tax Appellate Tribunal (ITAT) as an authorised representative is not automatically entitled to receive the Tribunal’s final order on behalf of the assessee, unless specifically authorised.

Mrs. Neelam Ajit Phatarpekar, the applicant, filed two miscellaneous civil applications seeking condonation of a delay of 40 days in filing tax appeals against the ITAT’s order dated 14 September 2016.

She stated that she only became aware of the Tribunal’s decision in April 2024, after receiving a recovery notice for the assessment year 2009-10. She then applied for a certified copy of the order, which was received on 17 May 2024, and filed the appeals shortly thereafter.

The applicant’s counsel argued that she was genuinely unaware of the Tribunal’s 2016 order until 2024 as her late husband passed away in April 2016, who had been handling the tax matters. The order had been passed after his death, and she was not personally served.

The applicant’s counsel submitted that under Section 260A of the Income Tax Act, the limitation period for filing an appeal to the High Court begins only from the date the assessee actually receives the ITAT’s order.

The department opposed the applications, arguing that there was a delay of over eight years, not just 40 days. The revenue counsel pointed out that the couple’s authorised representative, a Chartered Accountant named S.P. Bhandare, had received two copies of the order on 20 September 2016. They argued that this constituted valid service on the assessee and that the delay could not be condoned.

In response, the applicant produced an affidavit from the same Chartered Accountant, who admitted he had received the order in 2016 but stated that he could not recall whether he had ever handed it over to the assessee or her family. The applicant’s counsel submitted that she did not know the order until the recovery notice was issued.

The bench comprising Justice Bharati Dangre and Justice Nivedita P. Mehta pointed out that the Income Tax Act allows assessees to be represented by authorised representatives, including Chartered Accountants, but it specifically requires the Tribunal to communicate its final order directly to the assessee.

The court explained that there is a clear statutory mandate under Section 254 of the Income Tax Act and Rule 35 of the ITAT Rules that a signed order must be sent to both the assessee and the Commissioner. The court disagreed with the revenue’s argument that service on the CA was sufficient.

The court pointed out that, unlike lawyers who act under a vakalatnama and are considered recognised agents under Order 3 Rule 1 of the Code of Civil Procedure, 1908, and may be authorised to receive documents on behalf of a party, a Chartered Accountant only functions as an authorised representative under the Income Tax Act.

The court held that in this case, there was no proof that the order was ever served on the assessee herself. The court condoned the 40-day delay and directed that the two tax appeals be listed for hearing. The applications were allowed.

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