ITO-41(4)(1), MUMBAI V. FARHAT YUSUF SHAIKH, MUMBAI

MA 321/MUM/2025

AI Insights

The case involves the Income Tax Officer (ITO) as the appellant and Farhat Yusuf Shaikh as the respondent, concerning the assessment year 2015-16. The Revenue filed a miscellaneous application seeking rectification of an earlier order which had added an amount of Rs.1,29,00,000 under section 68 of the Income Tax Act, 1961, citing an increase in unsecured loans. The Tribunal found that the application was filed late and noted that the department's request for rectification was essentially a request for a review of the decision, which is not allowed under the provisions of the Act. The Tribunal upheld the findings of the first appellate authority, which had determined that no fresh loans were taken by the assessee and the increase was due to book entries.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 822861 (ITAT-MUMBAI)
• Duration Of Justice: 1 month(s) 8 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 23-12-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2015-2016
• Appeal Filed On: 14-11-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SATYAPRAKASH SINGH
• Assessee Lawyers: KRISHNA KUMAR
• Keywords: Additional evidence; Period of limitation; Rectification of order

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “F” BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY, VICE PRESIDENT AND SHRI PRABHASH SHANKAR, ACCOUNTANT MEMBER MA No. 321/Mum/2025 (Arising out of ITA No. 770/Mum/2025) (Assessment Year: 2015-16) Income Tax Officer-41(4)(1) 8th Floor, Room No. 854A, Kautilya Bhavan, Bandra Kurla Complex, Bandra (E), Mumbai-400 051 Vs. Farhat Yusuf Shaikh B-702, Blossom Park, Opp. Farooq Scholl, S. V. Road, Jogeshwari (W), Mumbai-400102 PAN/GIR No. (Appellant) : (Respondent) Appellant by : Shri Satyaprakash Singh Respondent by : Shri Krishna Kumar Date of Hearing : 19.12.2025 Date of Pronouncement : 23.12.2025 O R D E R Per Saktijit Dey, Vice President: Captioned application has been filed by the Revenue, seeking rectification of order dated 25.03.2025, passed in ITA No. 770/Mum/2025. 2. At the outset, we must observe, the Registry has notified delay of 45 days in filing the present application. When this fact was brought to the notice of ld. Departmental Representative (ld. DR for short), though, he admitted the fact of delay, however, he submitted that the department has filed an application seeking condonation of delay. In this context, reference can be made to sub section (2) of section 254 of the Act, which empowers the Income Tax Appellate Tribunal to rectify the mistake apparent on the face of record in respect of any order passed by it. The said provision, provides a time limit of six months from the end of the month in which the order was passed to rectify the order. Printed from counselvise.com 2 MA No. 321/Mum/2025 (A.Y. 2015-16) ITO vs. Farhat Yusuf Shaikh There is no inbuilt mechanism in the said provision or any other provision under the Act, empowering the ITAT to condone delay in respect of an application filed u/s. 254(2) of the Act. In the instant case, the order of the Tribunal was passed/pronounced on 25.03.2025. Thus, as per the provisions of section 254(2) of the Act, the application should have been filed on or before 30.09.2025. Whereas, the application was actually filed on 14.11.2025. Thus, the present application has not been filed within the prescribed period of limitation u/s. 254(2) of the Act. There being no power conferred under the statute to condone delay, the present application being barred by limitation cannot be entertained. 3. Even otherwise also, for the sake of completeness, we deem it appropriate to decide the issue on merits. On going through the miscellaneous application, it is quite apparent that rectification is sought in respect of ground nos. 2, 3 and 4 raised in the appeal which relates to addition of an amount of Rs.1,29,00,000/- u/s. 68 of Income Tax Act, 1961. 4. A reading of the assessment order makes it clear that the A.O. made the addition finding increase in the closing balance of unsecured loans as on 31.03.2014 and 31.03.2015. However, it was the case of the assessee before ld. first appellate authority that increase in the loan account was due to book entries both on asset side as well as liability side of the balance sheet. Essentially, it was the submission of the assessee that in reality no unsecured loan was actually taken in terms of money either in cash or through cheque. In support of such claim, the assessee had furnished additional evidences which the first appellate authority forwarded to the A.O. for verification and comment. 5. After considering the remand report of A.O., the submissions of the assessee in the context of the evidence available on record, the first appellate authority in paragraphs 5.6 Printed from counselvise.com 3 MA No. 321/Mum/2025 (A.Y. 2015-16) ITO vs. Farhat Yusuf Shaikh to 5.8 has given a factual finding that no fresh loan was taken by the assessee during the year and increase was only due to book entries. When the issue came up for consideration before the Tribunal, being agitated by the Department, the Tribunal again reappreciated the evidences available on record and other relevant facts and materials germane for deciding the issue. ITAT having found the factual finding recorded by the first appellate authority irreversible, concurred with his finding. In the garb of rectification of mistake, the department essentially is seeking a review of the appellate order, which is impermissible under the provisions of Act. If the department is aggrieved on the merits of the decision rendered by ITAT, only course available to the department is to file an appeal before the higher appellate authority and not through the indirect mode of rectification u/s. 254(2) of the Act. Thus, the present application filed by the department being devoid of merit, deserves to be dismissed. Accordingly, it is dismissed. 5. In the result, the miscellaneous application is dismissed. Order pronounced in the open court on 23.12.2025 Sd/- Sd/- (Prabhash Shankar) (Saktijit Dey) Accountant Member Vice President Mumbai; Dated : 23.12.2025 Roshani, Sr. PS Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. The CIT(A) 4. CIT - concerned 5. DR, ITAT, Mumbai 6. Guard File BY ORDER, (Dy./Asstt. Registrar) ITAT, Mumbai Printed from counselvise.com "