Income Tax Department not trusted even upon its lawyers – SC slams ITD for delay

Income Tax Department not trusted even upon its lawyers – SC slams ITD on adopting a long process resulting delay in filing appeal

In a recent judgment, the Hon’ble Supreme Court has slammed the Income Tax Department for adopting a long process of filing petition despite having a team of legal experts to advice and to take necessary action. It appears that the Department has not trusted even upon its lawyers.

ABCAUS Case Law Citation:
4876 (2025) (11) abcaus.in SC

In the instant case, the Commissioner of Income Tax (Exemptions) had filed a Special Leave Petition (SLP) before the Hon’ble Supreme Court challenging the order of the Hon’ble High Court dismissing the appeal of the Revenue.

The Hon’ble High Court had observed that a plain reading of the impugned order would reveal that the Tribunal had taken into consideration the decision of the coordinate Bench of the same Tribunal in respect of the same assessee for the previous Assessment Years.

The Hon’ble High Court while dismissing the appeal had opined that the finding arrived at by the Tribunal was purely factual and that since the matter since had been remanded back, the order of remand cannot be considered to be the question of law, much less even a substantial question of law to be framed.

The Hon’ble Supreme Court observed that there was a delay of more than 500 days in filing the special leave petition. Since the Apex Court was not satisfied with the explanation furnished in the delay condonation application, the Department filed a detailed affidavit giving details of the various steps taken by the CIT(E) in the process of filing the petition before the Hon’ble Supreme Court.

The Hon’ble Supreme Court observed that the details given in affidavit indicated that despite the knowledge of the impugned order instead of directing for the filing of the special leave petition, the CIT(E) called for scrutiny report. When the scrutiny report was submitted, a second scrutiny report was called for. Thereafter, since the matter had been delayed, the explanation was called as to why the delay had occurred. Then the papers were submitted to the Panel Counsel for drafting the special leave petition. Once the petition was drafted, it was sent for vetting not only once, but thrice. Once the vetting was completed, it was again marked to the Panel Lawyer for drafting the application for condonation of delay.

The Hon’ble Supreme Court observed that the CIT(E) had followed a long process of filing the special leave petition despite being aware of the fact that the petition has to be filed within the specified timeframe.

The Hon’ble Supreme Court came down heavily on the Income Tax Department and remarked that no one in the Department is taking care to shorten the process of filing the petition so that the special leave petitions may be filed within time. This is despite the fact that the Department has a team of legal experts to advice and to take necessary action.

“It appears that the Department has not trusted even upon its lawyers.” Said the Apex Court. However, as certain other matters on a similar point had already been entertained, Their Lordships condoned the delay and admitted the special leave petition.

However, the Apex Court directed that its order be communicated to the concerned Commissioner of Income Tax and to the other higher authorities of the department for necessary corrective measures.

Download Full Judgment Click Here >>

• Appeal withdrawn against rejection u/s 12AB as assessee was availing benefit u/s 10(23C)(iiiad)
• When delay not mala fide, right of hearing on merit not to be rejected – ITAT
• Exemption u/s 54 allowed despite failure to deposit in Capital Gains Accounts Scheme
• No addition to be made in hands of assessee solely on basis of uncorroborated loose-sheet
• Claim of Leave Encashment exemption u/s 10(10AA)(ii) dismissed beyond Rs. 3 lakhs