LEGAL INITIATIVE FOR FOREST AND ENVIRONMENT TRUST (LIFE TRUST) vs. PCIT CENTRAL 2 DELHI AND ANR.

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W.P.(C)/2342/2026HC DelhiDLHC01006183202624 February 2026Author: HON'BLE MR. JUSTICE VINOD KUMAR,HON'BLE MR. JUSTICE DINESH MEHTA5 pages
AI SummaryAllowed

What did the High Court hold?

The High Court held that the Income Tax Appellate Tribunal (ITAT) was not legally justified in adjourning the petitioner's appeal sine-die simply because the High Court had admitted an appeal in a similar case and framed substantial questions of law. The Court noted that the High Court's order admitting the appeal did not stay the effect or operation of the ITAT's order. Therefore, the ITAT ought not to have adjourned the matter sine-die, especially when the stay petition had been rejected. If the Tribunal chose not to decide on merits, it should have protected the interest of the assessee. The Court found that such an approach by the ITAT aggravated the petitioner-Trust's grievance and led to a sheer wastage of time and energy for all parties involved. Consequently, the High Court set aside the ITAT's order dated January 19, 2026, to the extent it adjourned the case sine-die. The ITAT was directed to decide the appeal in accordance with the law within two months from March 10, 2026. The Court explicitly stated that no observations or findings were made on the merits of the case.

What were the facts?

The petitioner, Legal Initiative for Forest and Environment Trust (LIFE Trust), filed a writ petition seeking a direction for the Income Tax Appellate Tribunal (ITAT) to expeditiously decide its appeal. The ITAT had heard the appeal and reserved its order on September 3, 2025. However, on January 19, 2026, the ITAT adjourned the matter sine-die, citing an appeal admitted by the High Court in a similar case (ITA No. 30/2025) involving M/s Lakhmi Chand Charitable Society, where substantial questions of law were framed. The petitioner argued that despite another Bench of the ITAT allowing a similar appeal on November 12, 2025, and no interim order being granted by the High Court in the admitted appeal, its own appeal was adjourned sine-die, leading to adverse consequences. The petitioner sought a direction for the ITAT to decide the appeal within a month and for a stay on recovery.

What were the issues?

1. Whether the Income Tax Appellate Tribunal (ITAT) was legally justified in adjourning the petitioner's appeal sine-die on January 19, 2026, after reserving the order on September 3, 2025, solely because a High Court appeal (ITA No. 30/2025) in a similar case was admitted and substantial questions of law were framed, despite no stay order being granted by the High Court and another ITAT Bench having allowed a similar appeal on November 12, 2025? (Question of law and fact, concerning the ITAT's procedural discretion and adherence to principles of natural justice). Assessee's Contentions: - The ITAT should have decided the appeal on merits as no interim order was granted by the High Court in the admitted appeal. - The adjournment sine-die was unjustified, especially when a similar appeal was allowed by another ITAT Bench. - Rule 34(5)(c) of the Income Tax Appellate Tribunal Rules, 1963, mandates judgment delivery within sixty days, extendable by thirty days, implying an obligation to decide expeditiously. - Adjourning the matter sine-die, after rejecting the stay application, led to serious adverse consequences for the petitioner-Trust. Revenue's Contentions: - The period prescribed under Rule 34(5)(c) of the Income Tax Appellate Tribunal Rules, 1963, is directory and not mandatory, as held by this Court in various judgments. - While another case (Ram Saran) was allowed, the High Court admitted and framed questions of law in ITA No. 30/2025 only on December 4, 2025, after the ITAT's decision in the other case.

Which sections of the Income-tax Act were involved?

Section 260,Section 127,Section 12AB(4),Section 112A,Section 12AA

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
W.P.(C) 2342/2026 Page 1 of 5 $~2 * IN THE HIGH COURT OF DELHI AT NEW DELHI % Date of Decision : 24.02.2026 + W.P.(C) 2342/2026, CM APPL. 11291-11292/2026 & CM APPL. 12599/2026 LEGAL INITIATIVE FOR FOREST AND ENVIRONMENT TRUST (LIFE TRUST) .....Petitioner Through: Mr. Chander Uday Singh, Sr. Adv. Mr. Abishek Jebaraj, Ms. A. Reyana Shruti and Ms.Katayani, Advs. versus PCIT CENTRAL 2 DELHI AND ANR. .....Respondents Through: Mr. Zoheb Hossain, SPL. Counsel, Mr. Vipul Agrawal, SSC, Mr. Sanjeev Menon, Ms. Sakshi Sairwal and Mr. Akshat Singh, JSCs and Ms. Harshita Kotru and Mr. Gaoraang Ranjan, Advs. CORAM: HON'BLE MR. JUSTICE DINESH MEHTA HON'BLE MR. JUSTICE VINOD KUMAR

JUDGMENT

1.

A writ petition with 144 pages, including copies of the previous writ petition and various other documents, has been filed for a small rather innocuous relief, that the Tribunal be directed to expeditiously decide petitioner’s appeal. DINESH MEHTA, J. (ORAL)

2.

Thereafter, the petitioner placed additional documents on record running into 316 pages; the respondents have also filed several documents running into 257 pages, to oppose the relief sought by the petitioner.

3.

While deprecating the practice of the counsel from both the sides of W.P.(C) 2342/2026

unnecessarily burdening the dockets, which consume substantial time of the Court so also the energy, in a case where the grievances which has been canvassed by the petitioner invoking Article 226 of the Constitution of India. We are constrained to observe that a trivial issue which has been expended out of proportion.

4.

The core issue or grievance is; that the Income Tax Appellate Tribunal (hereinafter referred to as ‘the Tribunal’) had heard the appeal of the petitioner Trust and reserved the order on 03.09.2025, however, on 19.01.2026, the Tribunal adjourned the matter sine-die observing that against the identical appeal, which was decided by the Tribunal in the case of Principal Commissioner of Income Tax Central 3 New Delhi v. M/s Lakhmi Chand Charitable Society (annexure P-6 of the petition) and in the case of M/s Lakhmi Chand Charitable Society v. Principal Commissioner of Income Tax Central 3 New Delhi, has been subject to an appeal being ITA No. 30/2025 under Section 260 of the of the Income Tax Act, 1961 and substantial questions of law have been framed therein.

5.

Learned counsel for the petitioner informed that the Tribunal had allowed additional jurisdictional issues to be raised by the petitioner trust and thereafter, the matter was heard extensively on 03.09.2025 and the order was reserved. He added that in the meantime, on 12.11.2025 another Bench of the Tribunal (in which the judicial member who heard petitioner’s appeal was also a member) allowed the appeal filed by another assessee namely, Ram Charan Das Kishori Lal Charitable Trust and surprisingly, when it came to petitioner’s appeal, they have posted the matter again for consideration/clarification on 19.01.2026 and adjourned the matter sine-die, simply because in ITA No.30/2025, on 04.12.2025 this Court had framed the W.P.(C) 2342/2026

following questions, while admitting said appeal:- “(i) Whether on facts and circumstances of the case and in law, Hon’ble ITAT was right in quashing the order passed by PCIT (Central)-3 u/s 112A r.w.s. 12AA & 12AB(4) cancelling the registration of assessee trust by holding that the PCIT (Central) did not have jurisdiction to pass the aforesaid order which vested solely with PCIT (Exemptions)? (ii) Whether on facts and circumstances of the case and in law, the PCIT(Central) would have the powers to pass an order cancelling registration, since the jurisdiction of the assessing officers has been transferred under Section 127 of the Act? (iii) Whether on facts and circumstances of the case and in law, the PCIT(Central) had the power to cancel registration retrospectively w.e.f. AY 2015-16 under Section 12AB(4) despite the said provisions coming into effect from 01.04.2022?”

6.

Learned counsel argued that maybe, the appeal has been admitted against the order passed by the Tribunal in Lakhmi Chand Charitable Society’s case, but since no interim order was granted, it was incumbent upon the Tribunal to have decided the appeal on merits.”

7.

He argued that one fails to comprehend that when another Bench of the Tribunal has been pleased to allow the similar appeal on 12.11.2025, why the Bench in question has taken a different view and adjourned the appellant’s appeal sine-die?

8.

Learned counsel argued that in the present case, when the petitioner’s stay application stood turned down by the Tribunal, adjourning the matter sine-die, serious adverse consequences upon the rights of the petitioner- W.P.(C) 2342/2026

Trust have ensued. He prayed that the direction be issued to the Tribunal to decide the appeal within a month and recovery be stayed.

9.

In order to substantiate his arguments, learned counsel relied upon provisions contained in Rule 34(5)(c) of Income Tax Appellate Tribunal Rules, 1963 and argued that the Tribunal is supposed to deliver a judgment within sixty days of the appeal being heard, which period can be further extended by thirty days.

10.

Mr. Zoheb Hossain, learned Special Counsel for the Department on the other hand, argued that the period prescribed under Rule 34(5)(c) of Income Tax Appellate Tribunal Rules, 1963 is directory and not mandatory, as has been held by this Court in various judgment.

11.

He also argued that though it may be true that in another case, namely Ram Saran (supra), the Tribunal has allowed the appeal but if the facts are into consideration, it can be seen that said appeal was allowed on 12.11.2025, whereas this Court has admitted the appeal and framed question of law only on 04.12.2025. 12. Mr. Zoheb Hossain tried to touch upon the merits of the case and expressed a concern that the petitioner has approached this Court time and again.

13.

Heard learned counsel for the parties.

14.

The short issue and grievance for which, the petitioner has approached this Court is, whether the Tribunal, having reserved the order on 03.09.2025 and adjourned the appeal sine-die simply because ITA No.30/2025 has been admitted and framed questions of law was legally justified in doing so.

15.

On perusal of order dated 04.12.2025, we find that the effect and W.P.(C) 2342/2026

operation of the order of the Tribunal has not been stayed. Hence, we are of the view that simply because appeal has been admitted, the Tribunal ought not to have adjourned the matter sine-die, more so, when the stay petition had been rejected or if it so chose, it should have protected the interest of the assessee.

16.

Such approach of the Tribunal has led to the grievance of the petitioner-Trust also being aggravated. It has led to sheer wastage of the time and energy of the Tribunal and the assessee and its counsel who have argued the matter at length. We are, therefore, persuaded to set aside the order dated 19.01.2026, passed by the Tribunal to the extent it has adjourned the case ‘sine die’.

17.

Petition is, thus, allowed.

18.

The Tribunal is directed to decide the appeal in accordance with law.

19.

We make it clear that we have not made any observations or recorded any finding about the merit of the case, which shall obviously be considered by the Tribunal, while deciding appeal (No. 3241/Del/2023).

20.

The appeal shall be decided within the period of two months from the next date, which we hereby fixed as 10.03.2026, on which date, both the parties shall appear before the Tribunal.

21.

The petitioner-Trust shall however place a copy of this order before the Registrar of the Tribunal, who shall arrange to list the matter on 10.03.2026. DINESH MEHTA, J

VINOD KUMAR, J FEBRUARY 24, 2026/cd

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