PCIT Vs ILJIN Automotive Pvt Ltd (Madras High Court)
Madras HC: Revenue’s Appeal Against ITAT Order Quashing Section 154 Proceedings Becomes Infructuous After Fresh Rectification Orders – Question of Law Left Open
In PCIT v. ILJIN Automotive Pvt. Ltd., the Madras High Court considered the Revenue’s petition seeking condonation of 113 days’ delay in filing an appeal against the Chennai ITAT’s order dated 26.05.2025.
The assessee’s assessments for AYs 2016-17, 2017-18 and 2018-19 had originally been completed under section 143(3). Thereafter, the AO initiated rectification proceedings under section 154. The assessee’s appeals were dismissed by the CIT(A), but the ITAT allowed the assessee’s appeal on 26.05.2025.
The issue sought to be raised by the Revenue before the High Court concerned the ITAT’s action in quashing the section 154 proceedings on account of non-issuance/delayed issuance of notice. However, subsequent developments materially changed the position. Pursuant to the ITAT’s order, the Department issued notices afresh and passed three separate rectification orders under section 154(3) on 23.09.2025, 24.09.2025 and 26.09.2025. The assessee had already challenged those fresh orders before the CIT(A), where the appeals were pending.
The High Court therefore held that, in view of the subsequent fresh rectification orders and pending appellate proceedings, nothing remained to be adjudicated in the Revenue’s proposed appeal against the earlier ITAT order. Consequently, there was no purpose in condoning the 113-day delay merely to take up an appeal that had effectively become academic.
Importantly, the High Court did not decide whether the ITAT was correct in quashing the original section 154 proceedings for non-issuance or delayed issuance of notice. It expressly left that question of law open, dismissed the Revenue’s delay-condonation petition and consequently rejected the tax appeal.
Key takeaway: Where subsequent fresh section 154 orders have already been passed and are independently under challenge before the CIT(A), an appeal concerning the validity of the earlier rectification proceedings may become academic/infructuous. Crucially, the Madras High Court did not affirm the ITAT’s legal proposition regarding defective or delayed notice under section 154—the question of law was expressly left open.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
The civil miscellaneous petition seeks to condone the delay of 113 days in preferring the tax case appeal assailing the order dated 26.05.2025 passed in I.T.A.No.1495/Chny/2024 on the file of the Income Tax Appellate Tribunal ‘A’ Bench, Chennai.
2. Learned Standing Counsel appearing for the petitioner/revenue submitted that the delay is only meagre, which is also duly explained constituting sufficient cause. He further submitted that since substantial questions of law are involved in the appeal, the delay be condoned and the appeal be adjudicated on its merits.
3. We have considered the submissions made by learned counsel for the petitioner/revenue and perused the materials available on record.
4. The assessee filed return of income for three assessment years, which were selected for scrutiny and resulted in assessment orders under Section 143(3) of the Act. The Assessing Officer then initiated rectification proceedings under Section 154 of the Act for all the three assessment years. All the three appeals preferred by the assessee before the CIT (Appeals) for the assessment years 2016-17, 2017-18 and 2018-19 were dismissed by an order dated 19.03.2024.
5. The appeal filed by the assessee before the ITAT was allowed by an order dated 26.05.2025. Assailing the order of the ITAT, the revenue has preferred the tax case appeal along with a petition to condone the delay of 113 days.
6. It is not in dispute that pursuant to the order of the ITAT, notices were issued to the assessee for all the three assessment years and ultimately, three separate rectification orders were passed under Section 154(3) of the Act on 23.09.2025, 24.09.2025, and 26.09.2025. Assailing the rectification orders, the assessee has already filed three separate appeals before the CIT (Appeals), which are still pending.
7. Learned Standing Counsel for the revenue submitted that since the substantial question relating to the order passed by the ITAT quashing the proceedings under Section 154 of the Act solely on account of non-issuance and delayed notice is to be adjudicated, the appeal has to be taken on file. However, since three separate rectification orders were passed following the order of the ITAT, which are now pending in appeal before the appellate authority, we find that nothing remains to be adjudicated in the present tax case appeal by condoning the delay.
8. Under such circumstances, leaving the question of law open, the petition seeking to condone the delay is dismissed. As a sequel, T.C.A.SR.No.18026 of 2026 stands rejected. There shall be no order as to costs.
