ITAT Must Hear Cross-Objection on Merits After Admitting Its Own Factual Error in Calculating Delay.

By | November 10, 2025
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ITAT Must Hear Cross-Objection on Merits After Admitting Its Own Factual Error in Calculating Delay.

Issue

Whether the Income Tax Appellate Tribunal (ITAT) can refuse to restore an assessee’s cross-objection, which it had dismissed by incorrectly calculating the filing delay as “8 to 9 months,” even after admitting its mistake and issuing a corrigendum correcting the delay to “31 days.”

Facts

  • Following a search, an assessment order was passed. The Commissioner (Appeals) [C(A)] partly deleted the additions.
  • The Revenue filed an appeal to the ITAT against the C(A)’s order.
  • The assessee filed a cross-objection in response to the Revenue’s appeal.
  • The ITAT rejected the cross-objection, stating that it was filed with a delay of 8 to 9 months and that the assessee had not provided a valid reason for this “inordinate” delay.
  • The assessee filed a Miscellaneous Application (MA), pointing out that the Tribunal had made a gross factual error in its order.
  • The ITAT, realizing its mistake, passed a corrigendum, formally rectifying its order to state that the delay was only 31 days, not 8 to 9 months.
  • However, the ITAT then passed another order dismissing the assessee’s MA for restoration, thereby refusing to hear the cross-objection.

Decision

  • The High Court (implied) ruled in favour of the assessee.
  • It held that the ITAT’s original decision to reject the cross-objection was based on a fundamental factual error (a 9-month delay vs. a 31-day delay), which the Tribunal itself had admitted and corrected via a corrigendum.
  • The court found that the Tribunal’s subsequent order dismissing the MA was legally flawed, as it failed to address the consequences of its own admitted mistake.
  • The order dismissing the Miscellaneous Application was set aside.
  • The ITAT was directed to restore the assessee’s cross-objection and hear it on its merits alongside the Revenue’s main appeal.

Key Takeaways

  • Judicial Admission is Binding: Once a judicial body (like the ITAT) admits to a factual error and issues a corrigendum, it is bound to reconsider its decision that was based on that error.
  • Condonation Must Be Re-evaluated: A decision to deny condonation for an 8-9 month delay is based on a different set of considerations than a 31-day delay. The ITAT was duty-bound to re-evaluate the “sufficient cause” for the much shorter, actual delay.
  • Focus on the Mistake: The ITAT’s role in the Miscellaneous Application was to correct its own mistake, not to find new reasons to dismiss the case, which the court described as going “on a tangent.”
  • Substantive Justice: This ruling ensures that a taxpayer’s substantive right to be heard in a cross-objection is not defeated by a clear, admitted, and significant factual error made by the court or Tribunal itself.
HIGH COURT OF GUJARAT
Bhagwanjibhai N. Delwadia
v.
Assistant Commissioner of Income-tax
BHARGAV D. KARIA and Pranav Trivedi, JJ.
R/CIVIL APPLICATION (FOR CONDONATION OF DELAY) NO. 2330 of 2025
F/TAX APPEAL NO. 11010 of 2025
R/SPECIAL CIVIL APPLICATION NO. 7988 of 2025
JULY  15, 2025
Manish J Shah, Adv. for the Appellant. Ms Maithili D Mehta, Adv. for the Respondent.
ORDER
Bhargav D. Karia,J.- Heard learned advocate Mr. Manish Shah for the petitioner and learned Senior Standing Counsel Ms. Maithili Mehta for the respondent.
2. By this petition under Article 227 of the Constitution of India, the petitioner has challenged legality and validity of the order dated 16.10.2024 passed by the Income Tax Appellate Tribunal, Rajkot Bench, Rajkot (for short ‘the Tribunal’) in Bhagwanjibhai N. Delwadia v. ACIT [Misc. Application No. 8(RJT) OF 2022] arising out of Cross Objection No.1/Rjt/2004.
3. Having regard to the controversy involved which is in narrow compass, with the consent of the learned advocates for the parties, the matter is taken up for hearing.
4. Rule returnable forthwith. Ms. Maithili Mehta, learned Senior Standing Counsel waives service of notice of rule for the respondent.
5. Learned advocate Mr. Manish Shah appearing for the petitioner submitted that the Tribunal has rejected the Misc. Application filed by the petitioner though it is mentioned in the order that there was typographical error in quoting the number of days of delay while rejecting cross-objection filed by the petitioner in the Appeal preferred by the respondent before the Tribunal.
6. The brief facts of the case are as under:
6.1 A search was carried out at the residence and business premises of the petitioner on 16.2.1999.
6.2 An Assessment Order dated 30.3.2001 was passed under Section 158BC of the Income Tax Act, 1961 (for short ‘the Act’).
6.3 Being aggrieved by the Assessment Order the petitioner preferred an appeal before the Commissioner of Income Tax (Appeals) (For short ‘CIT (Appeals)’ who by order dated 31.7.2003 deleted certain additions and partly allowed the appeal filed by the petitioner.
6.4 Being aggrieved by the order passed by the CIT (Appeals), Revenue Department preferred an appeal before the Tribunal being IT (SS)A No.106/Rjt/2003.
6.5 The petitioner received a notice issued by the Tribunal intimating about filing of the appeal by the Revenue. The petitioner thereafter filed a cross-objection in the said appeal being CO No.1/Rjt/2004 belatedly by 31 days. The petitioner, therefore, filed an application in form of an affidavit to condone the delay along with Memo of the crossobjection in Form 36A.
6.6 The petitioner explained the cause for the delay in the affidavit and contended that the petitioner did not have any income earning activity at Rajkot for sometime and he had shifted to Ahmedabad with his family with help of a relative who offered him a job and hence the petitioner could not get the envelope containing the appeal memo in Form 36 and grounds of appeal filed by the revenue department in time and, therefore, the petitioner could not file the cross-objection within the prescribed time.
6.7 The Tribunal, by common order dated 23.1.2009, dismissed the appeal filed by the revenue on merits and also dismissed the cross-objection filed by the petitioner by stating that the cross-objection is filed after 8 to 9 months and the petitioner has not provided any valid reason to condone the delay. The para-4 of the order dated 23.1.2009 reads as under:
“4.The assessee has filed CO on 20.1.2004 i.e. it is out of time by 8 to 9 months. The assessee has filed application for condonation of delay. However, since the delay is considerable and no valid reasons has been given the CO of the assessee is dismissed as being time barred by limitation.”
Except the above observation, there is no finding of the Tribunal regarding the cross objection filed by the petitioner.
6.8 The respondent revenue department being aggrieved by the order passed by the Tribunal dismissing the appeal, preferred an Tax Appeal before this Court, being Tax Appeal No. 1974 of 2009 on 24.6.2009, which came up for hearing on 2.5.2011 before this Court. The petitioner did not file any Tax Appeal at the relevant time after receipt of the order of the Tribunal for dismissal of the crossobjection due to lack of financial resources and contemplated to file cross-objection when the revenue department filed a Tax Appeal before this Court.
6.9 This Court, by order dated 2.5.2011, issued notice for final disposal of the appeal by observing that,” We are prima facie of the opinion that the entire order is a nonreasoned and a non-speaking order.”
On receipt of the notice issued by this Court, the petitioner came to know that by final order dated 18.7.2011, the appeal was allowed by remanding matter to the Tribunal. It was observed by this Court as under:
“7. Under the circumstances, impugned judgement of the Tribunal is set aside. Proceedings are remanded to the Tribunal for fresh consideration and disposal in accordance with law. We have expressed no opinion on the merits or demerits of the rival contentions of the parties.”
6.10 It appears that the petitioner as well as the respondent and the Registry of the Tribunal were under impression that as the matter was remanded back to the Tribunal, the order of dismissal of the cross-objection by the Tribunal is also set-aside and the matter including the cross-objection is remanded to the Tribunal by this Court. Such impression was evident in view of the fact that both the Appeal being IT(SS)A No. 106/Rjt/2003 as well as CO No.1/Rjt/2004 were listed together in the cause-list of the Tribunal as well as in the order-sheet, which is placed on record at Annexure ‘E’ (page-46 & 47) of the petition. The Tribunal passed the following order:
“Both the revenue’s appeal and C.O. of the assesse are fixed for hearing before us. It was pointed out that the present appeals have been fixed as a consequence of the order of the Hon’ble High Court in the first round in ITA No. 106/Rjt/2003 and apparently as per the said order only the revenue’s appeal was directed to be heard again by the ITAT. We have gone through the order of the ITAT and have noted that while C.O. of the assesse was dismissed as been time barred, the Revenue’s appeal was dismissed after dealing with each ground on merits. That subsequently the Revenue went in appeal before the Hon’ble High Court who restored the matter back to the ITAT noting that the ITAT, had confirmed the CIT(A)’s order on various issues without any discussion at all. It appears therefore that it is only the revenue’s appeal which needs to be heard in lieu of the order of the Hon’ble High Court. Ld. Counsel for the assesse stated that since there was no clarity whether both the Revenue’s appeal and the C.O. of the assesse were to be heard or only the Revenue’s appeal, therefore, he was not completely prepared with the case and sought further time to argue the appeal. Accordingly, the appeal is adjourned to 09/05/2022.”
6.11 The petitioner thereafter filed Misc. Application No.8/Rjt/2022 in Cross-objection No.1/Rjt/2004 to restore the cross-objection for consideration of the correct fact as the Tribunal has incorrectly observed that cross objection was out of time by 8 to 9 months and since the delay was considerable and no valid reasons were given by the petitioner, the cross-objections were dismissed.
6.12 The Tribunal by the impugned order dated 16.10.2024, dismissed the Misc. Application filed by the petitioner on the following three grounds:
(i)Section 255(5) of the Act and Rule 12 of the Income Tax Appellate Rules are not relevant to the petitioner’s case.
(ii)The miscellaneous application has been filed after a delay of approximately 13 years without filing petition for condonation of such huge delay.
(iii)The original application for condonation of delay filed with Form 36A is not supported by any evidence to condone the delay of even 31 days.
6.13 Being aggrieved, the petitioner has preferred this petition to quash and set-aside the order dated 16.10.2024 passed by the Tribunal in Misc. Application and to restore the cross-objections filed by the petitioner on file to be heard along with pending appeal pursuant to the remand made by this Court.
7. Learned advocate Mr. Manish Shah for the petitioner at the outset submitted that the petitioner has also preferred Tax Appeal No. 11010 of 2025 along with OJCA No. 2330 of 2025 challenging the order dated 23.1.2009 passed by the Tribunal in CO.No.1/RJT/2004 dismissing the cross-objection and to condone the delay of 5771 days in filing the appeal.
8. It was further submitted that the Tribunal while rejecting the Misc. Application has observed that due to typographical error, the Tribunal had mentioned the delay of 8 to 9 months instead of 31 days. It was further pointed out that after dismissal of the Misc. Application, the Tribunal has issued a corrigendum dated 18.12.2024 to rectify the order dated 23.1.2009 replacing the Para-4 of the said order as under:
“4. The assessee has filed CO on 20.1.2004 i.e. it is out of time by 31 days. The assessee has filed application for condonation of delay. However, since the delay is considerable and no valid reasons has been given the CO of the asseessee is dismissed as being time barred by limitation.”
9. It was submitted that without issuing the corrigendum, the Tribunal has considered that in the impugned order the delay of 31 days is not explained by the petitioner with valid reasons and the petitioner has cooked up a story for condonation of delay which is not supported by any evidence and, therefore, delay of 31 days cannot be condoned. It was submitted that the Tribunal has not given any such reason while rejecting the crossobjections in the order dated 23.1.2009.
10. It was submitted that the petitioner has referred to the provision of Section 253(5) of the Act, which provides for powers of the Tribunal to admit an appeal after the expiry of the relevant period referred to in subsection 3 or sub-section 4 if it is satisfied that there was sufficient cause for not presenting it within that period.
11. It was, therefore, submitted that the Tribunal has not passed any order rejecting the cross-objection under Section 254(1) of the Act and Section 254(2) of the Act provides for rectification of the order passed under Section 254(1) of the Act and, therefore, limitation provided under Section 254(2) would not apply to case of non-admission of either appeal or cross-objection under Section 253(5) of the Act and any mistake committed by the Tribunal therein can be rectified without any bar of limitation of time.
12. Learned advocate Mr. Shah submitted that inspite of pointing out the aforesaid legal proposition before the Tribunal, the Tribunal referred to the provision of Section 255(5) read with Rule 12 of the ITAT Rules and rejected the Misc. Application of the petitioner, ignoring the provisions of Section 253(5). It was submitted that the Tribunal has, therefore, committed a grave error in rejecting the Misc. Application filed by the petitioner to recall the order of dismissal of cross-objections wherein incorrect delay was mentioned and the said order is also without any reason assigned by the Tribunal and it was only stated that the petitioner has not given any valid reason to condone the delay.
13. It was further submitted that the Tribunal has referred to various submissions of the petitioner and arrived at a finding and justification to not to condone the delay in rectification of the Misc. Application, which is not permissible as the Tribunal is only required to consider the mistake committed in the order against which the Misc. Application was filed.
14. It was, therefore, submitted that the impugned order is illegal and liable to be quashed and set-aside.
15. On the other hand, learned Senior Standing Counsel Ms. Maithili Mehta appearing for the respondent submitted, under instructions, that the impugned order may be quashed and setaside and the matter may be remanded back to the Tribunal so as to hear the cross-objection filed by the petitioner to be heard with the pending appeal of the revenue after the remand made by this Court in the year 2011.
16. Having heard learned advocates for the respective parties and considering the chequered history of the case, it is painful to record that the Tribunal instead of considering the facts and appreciating the submissions made by the learned advocate for the petitioner, has gone tangent by referring to the provision of Section 255(5) of the Act ignoring the provision of Section 253(5) of the Act by observing as under:
“11. Now we shall deal above questions one by one as follows.
(i) We do not agree with Learned Counsel for the assessee, to the effect that order was passed by the Tribunal under section 255(5) of the Act, therefore provisions of section 254(2) of the Act, is not applicable to the assessee, under consideration. We note that Tribunal had passed the order dated 23.01.2009, under sub-section (1) of section 254 of the Income tax Act, where the Appellate Tribunal, may after giving both the parties to the appeal, an opportunity of being heard, and pass such orders, thereon, as it thinks fit. We note that Section 255(5) of the Income tax Act, talks about Power of the Tribunal to regulate its own procedure. It states that Appellate Tribunal shall have power to regulate its own procedure and the procedure of Benches thereof in all matters arising out of the exercise of its powers or of the discharge of its functions, including the places at which the Benches shall hold their sittings. Therefore, we do not agree with learned Counsel for the assessee, to the effect that Tribunal has passed the order in the assessee’s case under consideration, under section 255(5) of the Act, rather, Tribunal has passed the order, in the assessee’s case under consideration, under section 254 (1) of the Act.
We note that Rule 12 of Income Tax Appellate Tribunal Rules, deals with rejection or amendment of Memorandum of appeal,if it is not in the prescribed form. Therefore, we find that section 255(5) of the Act, and Rule 12 of Income Tax Appellate Tribunal Rules, deal with procedure of the Income Tax Appellate Tribunal, and therefore, these provisions are not relevant to adjudicate the issue involved in the assessee’s miscellaneous application.
Learned Counsel for the assessee, heavily relied on the decision of Coordinate Bench of ITAT Delhi, in the case of airport authority of India(supra) wherein it was held that the limitation imposed u/s 254(2) of the Act, is not applicable because the Tribunal’s order was not u/s 254(1) but under section 255(5) read with Rule 12 of ITAT Rules; where COD approval is denied prior to the decision of Hon’ble Supreme Court dated 17/02/11 recalling its order in the case of ONGC (supra), the order of Tribunal dismissing the appeal prior to COD approval cannot be recalled; where COD approval was awaited on 17/02/11, the orders of Tribunal dismissing the appeal for want of COD approval have to be recalled particularly when Tribunal had put a rider for recalling of its order on getting COD approval. Therefore, we find that in the case of airport authority of India(supra), the facts are totally different and moreover Tribunal had put a rider for recalling of its order on getting COD approval, which is not the assessee’s case, under consideration.
(ii) The cross objection filed by the assessee is barred by limitation by 31 days only, (one Month only), whereas, the Tribunal has stated in its order, the delay of 8 to 9 months, which relates to length of delay. The length of delay, is not material, what is material is to explain the “sufficient cause”, which the assessee has failed to do so. We find that the assessee even failed to explain the delay of 31 days, (one Month only), in the petition for condonation of delay. No doubt, it is a typo graphical error on the part of the tribunal, in coating the number of days of delay, however, the facts remain that assessee, even not able to explain the delay of 31 days. After going through the petition for condonation of delay, we noticed that assessee had stated a cooked story in the petition of condonation of delay, which is not supported by any evidence. Hence even delay of 31 days cannot be condoned.The important and relevant part of the petition for condonation of delay, filed by the assessee, is reproduced below for ready reference:

“I did not have any income earning activity at Rajkot for quite some time and I was therefore finding it increasingly difficult to feed my family. Under the circumstances a relative residing at Ahmedabad obliged me by offering a job. As a result I have shifted with family to Ahmedabad.

In view of the above, I could get the envelope containing copy of form no. 36 and Grounds of Appeal filed by the department through my neighbour and could arrange to forward the same to my Tax Consultant M/s Sarda & Sarda through my brother in law’s son. This took away quite some time. Moreover M/s Sarda & Sarda prepared cross objections and forwarded the same to me for my signature at Ahmedabad and I returned the same to them at Rajkot after signing. This again took time.”

We note that reasons mentioned by the assessee, in the above petition are not supported by any evidence. How the Tribunal come to know that assessee did not have any income earning activity at Rajkot for quite some time and assessee was therefore finding it increasingly difficult to feed his family. What are the evidences for these activities, everybody can frame these reasons. Who was that relative residing at Ahmedabad who obliged assessee, even name of the Relative is not mentioned in the affidavit. The assessee stated that he could get the envelope containing copy of form no. 36 and Grounds of Appeal filed by the department through his neighbour and could arrange to forward the same tohis Tax Consultant M/s Sarda & Sarda through his brother in law’s son, cannot be believed. On which date M/s Sarda & Sarda prepared cross objections and forwarded the same to assessee, etc are the cooked story, which is not supported, even by evidence, hence cannot be relied. Therefore, we find that assesseefailed to explain the ‘sufficient- cause’ in the petition for condonation of delay, therefore we note that there is no infirmity in the decision of the Tribunal. So far, quoting of number of months and days, in the decision of the Tribunal, are concerned, it is a typographical error on the part of the Tribunal, which can be rectified by issuing a corrigendum, provided the assessee makes a separate application for that purpose. Corrigendum means an error to be corrected, in a printed order of Tribunal, without changing the ratio of the decision of the Tribunal.
(iii) Before this Tribunal, the said miscellaneous application is filed by the assessee, (requesting to recall the crossobjection No.01/RJT/2004), after expiry of a period of 13 years(aprox). The Tribunal had passed the order on 23.01.2009, whereas the assessee filed the miscellaneous application before this Tribunal on 12.07.2022, (almost, after expiry of a period of 13 years-approx.). The assessee, did not file petition for condonation of delay, to condone such huge delay, therefore, we dismiss the assessee’s Miscellaneous Application.
17. From the above observations and the findings arrived at by the Tribunal, it is apparent that the Tribunal has decided the Misc. Application as if the petitioner has filed an the appeal rather than referring to the mistake committed by the Tribunal while rejecting the cross-objection filed by the petitioner.
18. It is also pertinent to note that the Tribunal has recorded in the aforesaid observation that there is an error in mentioning the delay in the order dated 23.1.2009 as there was delay of 31 days whereas the Tribunal has mentioned that there was a delay of 8 to 9 months and Tribunal has thereafter passed an corrigendum dated 18.12.2024 rectifying the order dated 23.1.2009 by correctly stating the delay in Para-4 of the said order, i.e. 31 days instead of 8 to 9 months.
19. It is also shocking that though the corrigendum was issued subsequent to the impugned order dated 16.10.2024, the Tribunal has considered the aspect of delay of 31 days in the order rejecting the Misc. Application as if the Tribunal is deciding as to whether cross-objection is required to be admitted or not and thereby supplementing the reason for rejecting the cross-objection on the ground of delay. Such a approach of the Tribunal is highly deprecated as the Tribunal did not bother to apply the mind when there is sufficient cause explained by the petitioner by filing an affidavit in support of the cross-objections, the Tribunal had an audacity to mention without any basis that “Petitioner has stated a cooked story for condonation of delay, which is not supported by any evidence. Hence, even delay of 31 days cannot be condoned.”
Such observations made by the Tribunal are not emanating from the Misc. Application for rectification filed by the petitioner, but the same are made out of context as on the date of passing of the order dated 16.10.2024, there was mention of delay of 8 to 9 months in the order dated 23.1.2009, which was not corrected by issuing corrigendum by the Tribunal, till 18.12.2024.
20. In view of the above glaring facts, the impugned order dated 16.10.2024 passed by the Tribunal in Misc Application No. 8/Rjt/2022 is hereby quashed and set-aside and the order dated 23.1.2009 passed by the Tribunal is ordered to be recalled. The delay in filing the cross-objections by the petitioner is ordered to be condoned considering the averments made in the affidavit filed by the petitioner and the Tribunal is directed to hear the cross-objection No.1/Rjt/2004 along with the pending Appeal being IT (SS) A No. 106/Rjt/2003 filed by the respondent-revenue. As the Appeal and the cross-objections are pending since 2003-2004, the Tribunal is directed to hear the same and dispose of within a period of 12 weeks from the date of receipt of copy of this Order. Rule is made absolute to the aforesaid extent.
ORDER IN CA NO. 2330 OF 2025 IN F/TAX APPEAL NO. 11010 OF 2025:
In view of the order of even dated passed in Special Civil Application No. 7988 of 2025, the order dated 23.1.2009 which is under challenge in F/Tax Appeal No. 11010 of 2025 would not survive and accordingly the application to condone delay and the Tax Appeal have become infructuous and both Civil Application No. 2330 of 2025 and F/Tax Appeal No. 11010 of 2025 are, therefore, disposed of.