Allahabad HC Dismisses Appeal Against ITAT Rectification Order in Delay Matter

The Allahabad High Court, Lucknow Bench, in Abusaad Ahmad vs. Assistant Commissioner of Income Tax Central Circle-1, Lucknow (Income Tax Appeal Nos. 11 & 12 of 2026), delivered its judgment on May 6, 2026. The Division Bench held that issues involving appreciation of evidence, condonation of delay, or applicability of judicial precedents cannot be reopened under Section 254(2) of the Income-tax Act, 1961 unless there exists a “mistake apparent from the record.”

A Bench comprising Justice Shekhar B. Saraf and Justice Abdhesh Kumar Chaudhary upheld the order of the Income Tax Appellate Tribunal (ITAT), which had rejected the assessee’s miscellaneous applications seeking review of dismissal of appeals filed with a delay of 867 days. The Court highlighted that

“A conjoint reading of both terms ‘mistake’ and ‘apparent’ would mean that those mistakes which can be rectified under section 254(2) are ones that are patent, obvious and whose discovery is not dependent on argument or elaboration.”

The assessee had originally filed statutory appeals before the ITAT against orders passed by the Commissioner of Income Tax (Appeals). Along with the appeals, the assessee sought condonation of a delay of 867 days, contending that the appellate orders had been received by his driver and were inadvertently kept in the garage without being brought to his notice. The Tribunal, however, found the explanation unsupported by independent evidence and dismissed the appeals on limitation.

Subsequently, the assessee moved miscellaneous applications under Section 254(2), arguing that the Tribunal failed to consider the driver’s affidavit admitting fault and did not exercise powers under Sections 131 and 255(6) to summon or cross-examine the deponent. The Tribunal rejected the applications, holding that there was no mistake apparent from the record warranting rectification.

Before the High Court, the assessee relied on the Supreme Court ruling in Mehta Parikh and Company Vs. Commissioner of Income Tax, Bombay to argue that the affidavit ought to have been accepted in the absence of cross-examination.

The High Court, however, observed that the scope of Section 254(2) is narrow and confined only to rectification of patent and self-evident errors. It held that questions relating to appreciation of evidence, applicability of precedents, or exercise of investigative powers by the tribunal are debatable issues and cannot be treated as mistakes apparent from the record.

“Only glaring and any mistake apparent on the face of the record and/or order alone, can be rectified and hence anything debatable cannot be a subject matter of rectification.”

The Bench further noted that the assessee had not challenged the original ITAT order dismissing the appeals on limitation and had only challenged the subsequent review rejection order. It held that the Tribunal had rightly concluded that no rectifiable error existed under Section 254(2).

Thus, the High Court dismissed both appeals, holding that no substantial question of law arose for consideration under Section 260A of the Act.

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