ITAT is last fact finding authority and bound to follow directions issues by high court in pith and substances: Rajasthan High Court

The Income Tax Appellate Tribunal (ITAT) has been declared the final fact-finding authority by the Rajasthan High Court, and as such, it must give effect to the High Court’s directives.

Chief Justice Pankaj Mithal and Justice Anoop Kumar Dhand, sitting as a division bench, ruled that the High Court’s remanding order required the Tribunal to confirm the land’s distance from the city’s outskirts and, if necessary, seek assistance from the Revenue Authority. The ITAT simply remitted the case back to the Assessing Authority to record its finding regarding the distance of the land in question from the outskirts of the city of Jaipur without involving the Revenue Authority in any way. It was a flagrant violation of the High Court’s underlying directive.

Case- Pooja Agarwal Versus Commissioner of Income Tax-1


Capital gains on the sale of a certain plot of property, which was agricultural land and was sold to Quality Resorts and Hospitality Limited, became an issue before the authorities. This land was purportedly located outside the municipal limits of Jaipur. The department insisted the area was not farmland because it was within the city borders. Therefore, capital gains taxes can be applied to the revenues from its sale.

A tax appeal brought the case all the way to the High Court. The High Court dismissed the petition and instructed the ITAT to factor in the distance between the parcel in question and the outskirts of Jaipur City in light of the notification issued on January 6, 1994. The court ruled that the ITAT must, if necessary, submit a request to the Revenue Authority above the Deputy Collector level to confirm the land’s distance from Jaipur’s city limits. The case will be heard once again by the ITAT.


The court ruled that instead of sending the matter back to the Assessing Authority, the Tribunal could have recorded the finding on its own regarding the distance of the land from the outskirts of Jaipur City, or it could have requested the Assessing Authority to make the measurements and submit a report for the purposes of recording the findings.

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Judgement reviewed by Deepa Bajaj.

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