ITAT Cannot Dismiss Appeal Over Dress Code Violation During Virtual Hearing: Orissa High Court

Case Reference

Gudari Large Sized Multipurpose Cooperative Society Limited Vs Principal Chief Commissioner of Income Tax (Orissa High Court)

Background and Context

A significant procedural question arose before the Orissa High Court regarding the powers of the Income Tax Appellate Tribunal (ITAT) when an Authorised Representative (AR) appears through virtual mode without adhering to the prescribed dress code under the Standard Operating Procedure (SOP). The matter came up for consideration when the assessee challenged an ITAT order that had dismissed the appeal not on its substantive merits, but solely on the ground that the AR, participating via virtual hearing, was allegedly not dressed in conformity with the SOP governing virtual appearances.

The case presented an important intersection between procedural compliance and the fundamental right to adjudication on merits — a question that carries significant implications for assessees who access the Tribunal through virtual platforms.

The Dispute Before the Orissa High Court

The ITAT's Impugned Order

The Income Tax Appellate Tribunal, Cuttack Bench, passed an order dated 14th August, 2025 in ITA No.414/CTK/2025, dismissing the assessee's appeal during a virtual hearing. The basis for this dismissal was not any deficiency in the legal arguments advanced or any substantive infirmity in the assessee's case. Instead, the Tribunal's order rested entirely on the observation that the Authorised Representative of the assessee had appeared in virtual mode without wearing attire that conformed to the SOP prescribed for virtual hearings.

This was, by any standard, an extraordinary exercise of the Tribunal's powers — one that the Orissa High Court found to be wholly unsupported by any statutory provision.

The Assessee's Challenge

Aggrieved by this dismissal, the assessee approached the Orissa High Court by way of a writ petition under Article 226 of the Constitution of India. The assessee contended that the Tribunal had effectively denied it an opportunity to have its appeal adjudicated on merits, and that no rule or statutory provision empowered the Tribunal to dismiss an appeal on the ground of improper attire of the AR.

Note: The High Court, presided over by the Hon'ble Chief Justice, took up the matter and examined the statutory framework governing the Tribunal's procedure before arriving at its decision.

What Does Rule 24 Provide?

The Tribunal's procedure in cases of non-appearance is expressly governed by Rule 24 of the Income Tax (Appellate Tribunal) Rules, 1963. This rule specifically deals with situations where an appellant fails to appear before the Tribunal on the date of hearing.