The postponement is not carried forward even though the taxpayer is in no way responsible for the delay in hearing the appeal in the Income Tax Appellate Tribunal (ITAT). The Delhi High Court had termed this provision of the Income Tax Act as arbitrary and biased.
A three-member bench of the Supreme Court has recently partially repealed a provision of the Income Tax Act. This provision does not allow the postponement of the tax assessment to extend beyond 365 days. Then even if the taxpayer is not responsible for the delay in hearing. The Supreme Court has upheld the Delhi High Court’s decision to partially repeal this provision.
Explain that the postponement is not carried forward even though the taxpayer is not in any way responsible for the delay in hearing the appeal in the Income Tax Appellate Tribunal (ITAT). The Delhi High Court had termed this provision of the Income Tax Act as arbitrary and biased.
Third provision of section 254 (2A) of Income Tax Act 1961
In fact, the third provision of Section 254 (2A) of the Income Tax Act 1961 does not allow the ITAT to extend the stay order granted by ITAT on the tax assessment made by a taxpayer of the Income Tax Department beyond 365 days. This provision is effective from 1 October 2008. Of course there is no reason for any delay in appeal or hearing on behalf of the taxpayer, even then there is a provision to extend the postponement beyond 365 days. The Delhi High Court repealed the third provision of section 254 (2A) and now the Supreme Court has also approved it. After the fresh order, the postponement order of ITAT will not automatically end after 365 days if there is no delay from the taxpayer.