Delhi High Court admits Revenue challenge on demonetisation additions under Section 69A and higher tax rate under Section 115BBE
Background of the proceedings
In PCIT Vs Satish Kumar (Delhi High Court), the Revenue sought to challenge an order of the Income Tax Appellate Tribunal, Delhi Bench “G”, New Delhi, dated 26.09.2025. The Tribunal’s decision was questioned by the Revenue on multiple aspects relating to:
- Treatment of cash deposits during the demonetisation period under
Section 69Aof the Income Tax Act, 1961 - Applicability of the enhanced tax rate of 60% under
Section 115BBE - Temporal operation of the amendment to
Section 115BBEbrought in by the Taxation Laws (Second Amendment) Act, 2016
Before the appeal itself could be considered, the Revenue first had to overcome a procedural hurdle relating to delay in re-filing the appeal.
Application for condonation of delay
Statutory provisions invoked
The Revenue moved an application bearing CM APPL. 31455/2026 for condonation of delay in re-filing the appeal. This application was filed under the following provisions:
Section 5of the Limitation ActSection 151of the Code of Civil Procedure, 1908Section 260(2A)of the Income Tax Act, 1961
The purpose of the application was to seek condonation of a delay of 77 days in re-filing Income Tax Appeal No. ITA 384/2026.
Court’s view on the delay
The Delhi High Court examined the reasons furnished in the condonation application. Without entering into an elaborate discussion in the text of the order, the Court recorded that it was satisfied with the explanation offered.
Accordingly, the Court:
- Condoned the 77-day delay in re-filing the appeal
- Allowed the condonation application, subject to all just exceptions
- Disposed of CM APPL. 31455/2026 after granting the relief sought
This paved the way for the substantive tax appeal (ITA 384/2026) to be taken up for admission.
Admission of the appeal: substantial questions of law
Appeal admitted
Once the delay was condoned, the Division Bench considered whether the Revenue’s appeal raised any substantial questions of law warranting consideration under the Income Tax Act framework.
After evaluating the Tribunal’s order dated 26.09.2025, the Court held that the matter did indeed give rise to several substantial questions of law. Consequently, the appeal was formally admitted.
Notice issued
The Court directed issuance of notice in ITA 384/2026:
- Through all permissible modes
- Made returnable on 06.10.2026
This step signifies that the matter will now proceed to detailed hearing on merits, with both parties being heard on the identified legal issues.
Substantial questions of law framed by the High Court
The Delhi High Court crystallised four distinct legal issues that arise from the Tribunal’s order. These questions will form the core of the future adjudication in this appeal.