ITAT Dismisses Appeal: AR Without Uniform in Virtual Hearing 2026

What Happened?

The Income Tax Appellate Tribunal (ITAT) at Cuttack recently dismissed an appeal filed by an assessee on a procedural ground. The tribunal found that the authorised representative (AR) who appeared on behalf of the assessee in the virtual hearing was not dressed in the prescribed uniform as required under the Standard Operating Procedure (SOP) for virtual proceedings. Instead of hearing the substantive arguments on the appeal, the ITAT rejected the entire appeal based on non-compliance with the dress code requirement. This decision serves as a stark reminder that even procedural formalities cannot be overlooked, regardless of how technically advanced the hearing process becomes.

Background & Legal Context

Since the adoption of virtual hearings by various tax authorities and tribunals, especially post-2020, the Department of Income-Tax has issued Standard Operating Procedures (SOPs) to regulate conduct during online hearings. These SOPs are not mere suggestions—they carry legal weight and are binding on all participants.

Under the Income Tax Act, 2025, Section 254 deals with appeals before the ITAT. While the Act itself does not explicitly mandate formal dress codes, the tribunal's authority to regulate its own proceedings is derived from the procedural rules and standing orders issued by the ITAT. The Tribunal Procedure Rules and the SOP issued by CBDT for virtual hearings specifically prescribe that representatives appearing before the tribunal must maintain professional conduct, which includes wearing prescribed formal attire.

• Section 254, Income Tax Act 2025: Governs appeals before ITAT and the tribunal's authority to regulate proceedings
• CBDT SOP for Virtual Hearings: Mandates professional appearance during video-conferenced proceedings
• Tribunal Procedure Rules: Establish standards of decorum and conduct before the ITAT
• Applicable to: All authorised representatives, chartered accountants, advocates, and other professionals appearing before the tribunal

The rationale behind this requirement is to maintain the dignity of the tribunal and ensure that proceedings conducted virtually are treated with the same respect and formality as in-person hearings. The tribunal is essentially saying that just because the hearing is online does not mean professional standards should be relaxed.

What Does This Mean for You?

For Taxpayers and Their Representatives:

If you are an assessee planning to file an appeal before the ITAT or any tax tribunal, and you intend to appear through an authorised representative, be extremely cautious about compliance with all procedural requirements, including dress code. The Cuttack ruling demonstrates that tribunals will not overlook formal non-compliance, even if your substantive case is strong.

• Your AR must wear formal business attire — typically a jacket, formal shirt, and tie for men; and a saree, salwar-kameez, or formal dress for women. Check the specific SOP issued by your respective ITAT bench.
• The hearing platform matters — Whether it is Cisco Webex, Microsoft Teams, or any other platform used by the tribunal, the dress code applies uniformly.
• Technical glitches won't save you — If your AR is not in proper uniform, claiming that the camera was not working or the connection was poor will not help. The tribunal expects you to ensure compliance before joining the virtual hearing.
• Risk of appeal rejection — Unlike substantive grounds of appeal which can be argued and decided on merits, procedural defects like improper dress code can lead to outright dismissal without the tribunal even considering your arguments on the merits of the case.
• No opportunity to cure the defect — Once the appeal is dismissed on this ground, you may have to file a fresh appeal, which involves additional cost, time, and effort.

For Chartered Accountants and Advocates:

If you are a professional representing clients before the ITAT, this ruling is a critical wake-up call. You must:

• Obtain a copy of the specific SOP applicable to the ITAT bench where you will appear
• Communicate clearly with your client about all dress code and procedural requirements
• Conduct a test run of the virtual hearing setup at least 15 minutes before the scheduled hearing to ensure camera, lighting, and appearance are all in order
• Keep a formal blazer or appropriate attire ready even if you are appearing from home
• Ensure your background is professional (neutral wall, good lighting, no distracting elements)

Assessment Years Affected: This ruling applies to appeals pending before ITAT for Assessment Years 2025-26, 2026-27, and all future years. If you have pending appeals, review your hearing schedule immediately.

What Should You Do Now?

Immediate Action Items:

• Check your upcoming ITAT hearing dates: If you have an appeal scheduled, contact your representative immediately and confirm the dress code requirements specific to your ITAT bench (Cuttack, Delhi, Mumbai, Bangalore, Chennai, Kolkata, etc.)
• Obtain the SOP document: Request your CA or advocate to provide you with the latest Standard Operating Procedure for virtual hearings issued by CBDT. This is available on the official ITAT website or CBDT portal.
• Brief your representative thoroughly: If you are represented by a CA or advocate, send them a written reminder at least 3 days before the hearing confirming all procedural requirements, including dress code.
• Conduct a mock hearing: For important appeals, request your representative to join a test call with you where they appear in the prescribed uniform so you can verify that everything looks professional on camera.
• Plan ahead for home appearances: If your representative will appear from home, ensure they have proper lighting, a neutral background, and formal attire arranged in advance. Do not rely on last-minute arrangements.
• Keep documentation ready: Maintain copies of the SOP, hearing notice, and any correspondence regarding procedural requirements for your records. If any issue arises later, you will have proof that you complied.
• Consider in-person appearances: If virtual hearing compliance seems challenging, check whether your ITAT bench offers the option of in-person hearings. While not always available, it may eliminate ambiguity regarding appearance standards.

For Future Appeals:

When filing new appeals for Assessment Years 2026-27 and beyond, ensure that your appeal memo and all correspondence with the tribunal clearly indicates your intention to appear virtually and your commitment to comply with all SOPs. Some tribunals appreciate such proactive communication.

Key Takeaways

• Dress code is binding: The ITAT's Standard Operating Procedure for virtual hearings requires formal attire. Non-compliance can result in appeal dismissal, even if your substantive case is strong.
• Procedural compliance is non-negotiable: Tax tribunals do not distinguish between substantive and procedural grounds in their jurisdiction to regulate conduct. Both violations can be fatal to your appeal.
• Virtual does not mean informal: The fact that a hearing is conducted online does not relax the dignity and decorum required before judicial and quasi-judicial bodies. Professionalism must be maintained at all times.
• Representatives bear the responsibility: If you are represented by a CA or advocate, they must take personal responsibility for ensuring compliance. Ignorance of the SOP is not a valid excuse.
• Plan ahead to avoid dismissal: With the Cuttack ruling, assesses and their representatives must invest time in understanding and complying with all procedural requirements to protect their substantive rights in appeal proceedings.

Need expert help with this? EaseValue CAs in Jaipur — WhatsApp 63677 44602