Limitation for filing Rectification Application u/s 254(2)starts from the date order is served

Limitation for filing Rectification Application to ITAT u/s 245(2) starts from the date when the order of which rectification is sought, is served upon the Petitioner – Bombay High Court

In a recent judgment, Hon’ble Bombay High Court has held that limitation for filing the Rectification Application before ITAT under section 245(2) of Income Tax Act would start from the date when the order of which rectification is sought, is served upon the Petitioner.

ABCAUS Case Law Citation:
4918 (2025) (12) abcaus.in HC

In the instant case, the Petitioner/assessee had challenged the order passed by the ITAT in rejecting the Rectification Application filed under Section 254(2) by the Petitioner on the ground that the same was barred by the law of limitation.

The Petitioner had filed the Miscellaneous Application seeking rectification of the order beyond the period of 6 months from the end of the month in which the ITAT’s order was passed.

With respect to notice from the Registry of the Tribunal that the Application was belated, the Petitioner submitted that since the order was received two months after the ITAT order date, it could not have filed any Application for rectification before receipt of the said order. Therefore, the Application was within time.

However, the Rectification Application filed by the Petitioner was rejected as being time barred.

The Hon’ble High Court observed that Rule 34A of the Income Tax (Appellate Tribunal) Rules, 1963 read with Rule 9 thereof clearly stipulate that every memorandum of appeal shall be accompanied by two copies of the order appealed against. Therefore, it was impossible for the Applicant to approach the Tribunal under Section 254(2) without being supplied a copy of the order.

The Hon’ble High Court opined that when one reads these provisions together along with the Rules, it is clear that limitation for filing the Rectification Application would start from the date when the order of which rectification is sought, is served upon the Petitioner.

The Hon’ble High Court held that in the instant case, a Miscellaneous Application under Section 254(2) had been filed well within 6 months from the said date.

The Hon’ble High Court observed that the above view was supported by two decisions of the Delhi High Court in which it was held that date of communication or knowledge, actual or constructive, of the orders sought to be rectified or amended under section 254(2) of the Act becomes critical and determinative for the commencement of the period of limitation.

The Hon’ble High Court clarified that the ITAT in coming to conclusion relied upon a decision of the High Court which was wholly misplaced. The issue before the Court in the aforesaid decision was not whether limitation would start from the date on which the order was communicated to the assessee. Instead, the contention was that the judgment passed by the Hon’ble Supreme Court in suo motu Writ Petition, the period from 15th March 2020 to 28th February 2022 ought to be excluded for calculating the limitation for filing an application under Section 254(2).

Accordingly, the Hon’ble High Court held that ITAT misdirected itself when it held that the Rectification Application filed by the Petitioner was barred by the law of limitation. It was clearly filed within time.

The Hon’ble High Court however, did not send the Rectification Application back to the ITAT and permitted the Petitioner to canvass all the grounds raised in the Petition pertaining to the merits of the matter in the appeal filed challenging the original order.

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