The Income Tax Appellate Tribunal (ITAT) is the final fact-finding authority under the Income Tax Act, 1961. However, its orders can be challenged before higher judicial forums under specific circumstances. Below are the legal remedies available against ITAT orders:
1. Appeal to High Court [Section 260A]
When Can You Appeal?
✔ Only if a “substantial question of law” arises from ITAT’s order.
❌ Not permissible for purely factual disputes (unless findings are perverse).
Conditions
- Must be filed within 120 days(extendable with sufficient cause).
- High Court must admitthe appeal by framing the substantial question of law.
Examples of Substantial Questions of Law
- Misinterpretation of a legal provision(e.g., deduction under Section 80C).
- ITAT ignored a binding Supreme Court judgment.
- Decision is patently illegalor violates natural justice.
Case Law:
- CIT vs. Navodaya Castle (P) Ltd. (2017)– High Court can interfere if ITAT’s findings are illogical.
2. Special Leave Petition (SLP) to Supreme Court [Article 136]
When Can You File?
✔ If the High Court dismisses the appeal.
✔ If the case involves:
-
- National importance(e.g., constitutional validity of a tax law).
- Conflict between High Courts(different interpretations).
- Gross miscarriage of justice.
Time Limit
- 90 daysfrom High Court’s order (delay condonation possible).
Case Law:
- CIT vs. P.V. Kalyanasundaram (2007)– SC rarely interferes unless legal principles are violated.
3. Writ Petition (Article 226/227 of Constitution)
When Can You File?
✔ If ITAT’s order is:
-
- Without jurisdiction(e.g., decided a case beyond its powers).
- Violates natural justice(no proper hearing).
- Arbitrary or perverse(no reasonable person would agree).
❌ Not allowed if an alternative remedy (appeal under Section 260A) exists.
Case Law:
- CIT vs. Chhabil Dass Agarwal (2013)– Writ is exceptional, not routine.
4. Rectification of Mistakes [Section 254(2)]
When Can You Apply?
✔ If ITAT’s order has an obvious mistake (factual or legal).
❌ Cannot be used to re-argue the case.
Time Limit
- Must be filed within 4 yearsfrom the original order.
Example:
- ITAT overlooked a key Supreme Court judgmentwhile deciding.
Case Law:
- S. Balaram vs. CIT (1971)– Only apparent errors can be rectified.
5. Review Petition (Rule 40 of ITAT Rules)
- Rarely entertained.
- ITAT may reconsiderits order if there is a manifest error.
Comparison of Remedies
| REMEDY | APPLICABILITY | TIME LIMIT | KEY CONDITION |
| High Court Appeal | Substantial question of law | 120 days | Legal issue (not factual) |
| Supreme Court (SLP) | Exceptional cases | 90 days | National importance/conflict |
| Writ Petition | Jurisdictional error, violation of rights | No strict limit | No alternative remedy available |
| Rectification | Mistake apparent from record | 4 years | Must be a clear error |
6. Practical Considerations
✅ Departmental Appeals: Must meet monetary limits (e.g., ₹1 crore tax effect for HC appeals).
✅ Stay on Demand: If appealing to HC, file a stay application to avoid recovery.
✅ Legal Strategy: Choose remedy based on nature of error (factual vs. legal).
