CHIRAG CHANDRAKANT MEHTA,MUMBAI vs. PRINCIPAL CIT-27,MUMBAI, MUMBAI
Before: SHRI SANDEEP GOSAIN & SHRI GIRISH AGRAWALAssessment Year: 2015-16
PER GIRISH AGRAWAL, ACCOUNTANT MEMBER: This appeal filed by the assessee against the revision order of ld. PCIT, Mumbai-27 vide order no. ITBA/REV/F/REV5/2023- 24/1063467919(1) dated 27.03.2024 under section 263 of the Income Tax Act, 1961 (hereinafter referred to as the ‘Act’), passed against the assessment order by the Assessing Officer, National Faceless Assessment Centre (NFAC) Delhi, under section 147 read with section 144B of the Act dated 30.03.2022 for A.Y. 2015-16. 2 Chirag Chandrakant Mehta A.Y. 2015-16
At the outset, it is noted that there is a delay of 399 days in filing the present appeal before the Tribunal for which an affidavit for condonation of the said delay is placed on record, duly notarized. The contents of this affidavit filed by the assessee are extracted below for ready reference: “I Chirag Chandrakant Mehta, age- 55, having address at B-6 Sidhpura Industrial Estate, Off L.B.S Road, Amrut Nagar, Ghatkopar (W), Mumbai- 400 019 would like to state as under:- a) I am an Individual. I am also a Director in M/s Jell Pharmaceuticals Private Ltd and a partner in M/s Alka Chemical Industries. During the year under consideration, I have derived Income from Salary, Income from Business and Income from Other Sources.
b) My case for AY 2015-16 was selected for LIMITED scrutiny proceeding for verification of issue of "Increase in Capital" vide Notice u/s 143(2) dated
09.08.2016. After detailed verification the assessment was completed on 08.12.2017 under section 143(3) and return income was accepted.
c) Later on, case was reopened for verification of opening capital of Rs.
2,37,53,300/- vide notice u/s 147 of Income Tax Act, 1961. During reassessment proceeding I had provided the copy of my 7 years capital account, Financials of companies & firm, details of gift received from family members in earlier years in support of opening capital. It is also brought to knowledge of Ld. AO that I am filling my income tax return since A.Y. 1996-
97 and I am also Managing Director of Jell Pharmaceuticals Pvt. Ltd. (PAN
NO: AABCJ2207L) and partner in M/s Alka Chemical Industries. During reassessment proceeding Id. AO verified the details and even issued notice u/s 133(6) to 4 parties and after considering their reply passed reassessment order on 30.03.2022 and accepted the return income.
d) Later on, the Learned Principal Commissioner of Income Tax (PCIT) has proceeded to issue a notice u/s 263 dated 11.03.2024 concerning the same issue relating to the opening capital of Rs. 2,37,53,300/- on assumption that this issue is unverified.
e) I have furnished all the relevant details during 263 proceedings through my Professional Consultant CA Bipinchandra Pandya on 22.03.2024 and 26.03.2024 which comprises of :- i. A statement showing credit and debit to my capital account from FY 2007-
08 to FY 2013-14. 3
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A.Y. 2015-16
ii. Copy of my ITR V from AY 2008-09 to AY 2010-11 with capital account and Balance sheet and Copy of ITR V from AY 2011-12 to AY 2015-16 with computation of income, capital account and Balance sheet.
iii. Copy of ITR V of Alka Chemical Industries (PAN: AAAFA3072C) from AY
2013-14 to AY 2015-16 with computation of total income, Balance sheet,
Profit & Loss Account and Audit report.
iv. Copy of ITR V of Jell Pharmaceuticals Pvt Ltd (PAN: AABCJ2207L) from AY 2013-14 to AY 2015-16 with computation of total income, Balance sheet,
Profit & Loss Account and Audit report.
a) However, the same was not considered by the ld. PCIT in true spirit and the order was passed u/s 263 wherein it was alleged that appellant has declared opening capital of Rs. 2,37,53,300/- but the ld. AO failed to conduct proper enquiry about the source of capital and specially the gift received from father in earlier years. Therefore, the order passed by the Assessing Officer is erroneous and prejudicial to the interest of the revenue.
Accordingly, the assessment order dated 30.03.2022 was set aside and the ld. AO directed to do fresh assessment proceeding. But the ld. PCIT failed to considered that the gift received in earlier year cannot be considered in the year under consideration under section 68 of Income Tax Act, 1961. b) CA Bipinchandra Pandya didn't advise me to file appeal against the order under section 263 of Income Tax Act, 1961 and he continued with assessment proceedings under section 147 r.w.s 263 of the Income Tax Act,
1961 wherein the Ld. AO passed assessment order on 13.03.2025 and made addition of opening capital of Rs. 2,37,53,300/- under section 68 of Income Tax Act, 1961. As my consultant CA Bipinchandra Pandya not doing the appeal work so mandate for filing an appeal before CIT(A) against the order u/s 147 r.w.s. 263 dated 13.03.2025 was assigned to CA Sailesh
Doshi on recommendation of CA Bipinchandra Pandya.
c) Thereafter CA Sailesh Doshi health was compromised, and he suffered from Illness for a certain period, culminating in his unfortunate passing away on 06.06.2025. d) After knowing the death of CA Shailesh Doshi, my Consultant CA
Bipinchandra Pandya alongwith his friend CA Jayehs Ashra approach CA
Himanshu Gandhi on 27.06.2025 for handling my appeal matter pending before the CIT(A).
e) Himanshu Gandhi after verifying the details on 28.06.2025 suggested to file Appeal against the Order u/s 263 before the Hon'ble Income Tax
Appellate Tribunal. That first time I come to know that I can file an appeal against the principal order of PCIT u/s 263. The above facts resulted in not filing an appeal before the Hon'ble Income Tax Appellate Tribunal within
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time and after knowing about this Immediately I started a process of filing of an appeal before Hon'ble ITAT through CA Himanshu Gandhi.
f) Due to above facts the appeal was filed on 04.07.2025 which resulted into delay of 403 days in filling appeal.
g) My case is meritorious one as at the time of passing the original assessment order and reassessment order, proper inquiry was made by the assessing officer in respect of the opening capital.
h) Under the aforesaid circumstances, I submit that the delay in filling appeal was neither intentional nor warranted and if the delay is not condoned then I will suffer irreparable loss and injury. Therefore, the delay caused due to genuine and bona fide reasons, So I request your honour to kindly condone the delay in the interest of justice and equity.
i) I tender my sincere apology to Hon'ble Members and promise to be more vigilant in future.
In view of above and in the interest of justice, I request your honour to kindly condone the delay in filling appeal and decide the matter on merit. I shall remain grateful for this act of kindness.
I, thereby state that whatever is stated above is correct and to the best of my knowledge and I believe the same to be true.
Solemnly affirmed at Mumbai on this 16th day of September, 2025.”
1. From the above as well as from the material on record, it is noted that assessee filed his return of income on 30.09.2015 reporting total income at Rs.23,04,820/-. Assessment under section 143(3) was completed vide order dated 08.12.2017, accepting the returned total income as assessed total income of the assessee. 2.2. Subsequently, it was observed that there is an under assessment of an amount of Rs.2,37,53,300/- towards capital introduced by the assessee which was alleged to be from undisclosed sources. Accordingly, case of the assessee was reopened after recording reasons to believe for issuing notice under section 148 which was issued on 25.03.2021. Assessee filed his return of income in response to notice
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under section 148 on 02.04.2021. Statutory notices were issued under section 142(1) for which assessee furnished his reply on 14.07.2022
and 09.02.2022, which were considered by the ld. AO.
2.3. Also, notices under section 133(6) were issued to four parties from whom replies were received and ld. AO noted in this regard that they were found to be in order. Re-assessment proceedings were thus, completed by passing an order under section 147 read with section 144
(B) whereby returned total income was accepted as assessed total income vide order dated 30.03.2022. Subsequently, on verification of details submitted by the assessee during the course of reassessment proceedings, ld. PCIT observed that there is an increase in capital of Rs.2,37,53,300/- introduced during the A.Y. 2015-16. In this regard, he noted that as per the capital account submitted during the course of assessment proceedings, opening capital as on 01.04.2014 was reported at Rs.2,37,53,300/-. However, in contrast to this, in the return of income filed for the preceding year that is AY 2014-15, assessee reported capital at rupees “nil”. He further, observed that the opening capital as on 01.04.2014 of Rs.2,37,53,300/- is not supported with proper supporting documents especially, in respect of source of gifts received in earlier years. Thus, the increase in capital remained unverified and unexplained.
2.4. Based on these observations, ld. PCIT drew his prima facie consideration that the impugned reassessment order is prejudicial to the interest of revenue, and erroneous within the meaning of section 263. 3. A show cause notice under section 263 was issued on 11.03.2024
providing assessee an opportunity of being heard in this respect.
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Assessee made his detailed submissions including following documents:
(i) A statement showing credit and debit to capital account of the assessee from FY 2007-08 to FY 2013-14. (ii) Copy of ITR V of the assessee from AY 2008-09 to AY 2010-11 with capital account and Balance sheet. Copy of ITR V of the assessee from AY
2011-12 to AY 2015-16 with computation of income, capital account and Balance sheet f income, capital account and Balance sheet.
(iii) Copy of ITR V of Alka Chemical Industries (PAN: AAAFA3072C) from AY
2013-14 to AY 2015-16 with computation of total income, Balance sheet,
Profit & Loss Account and Audit report.
(iv) Copy of ITR V of Jell Pharmaceuticals Pvt Ltd (PAN: AABCJ2207L) from AY 2013-14 to AY 2015-16 with computation of total income, Balance sheet,
Profit & Loss Account and Audit report.
3.1. After considering the submissions made by the assessee, ld. PCIT observed that assessee had filed only a statement showing credit and debit to capital account for seven years starting from financial year
2007-08. He also noted that in the last four years from F.Y. 2010-11 to 2013-14, assessee claimed to have received aggregate gifts which Assessing Officer did not verify or enquire as to their source nor the assessee furnished any details. According to him, submissions made by the assessee during the course of reassessment proceedings were not supported with proper documentary evidences. Thus, ld. AO failed to make proper enquiry in this regard including that from the third parties.
2. He thus, noted that since the case of the assessee was reopened particularly on the issue relating to increase in capital of 7 Chirag Chandrakant Mehta A.Y. 2015-16
Rs.2,37,53,300/-, ld. AO failed to make proper enquiries in this regard and conduct complete examination rendering the impugned reassessment order as erroneous in so far as it is prejudicial to the interest of revenue. He thus, set aside the impugned reassessment order and directed the ld. AO to pass a fresh order after conducting proper enquiries, investigation and examination by affording reasonable opportunity of being heard to the assessee.
3.3. Assessee did not prefer appeal against the impugned revisionary order passed by ld. PCIT. Consequently to this revisionary order passed under section 263 dated 27.03.2024, ld. AO made an order giving effect to the said revisionary order. Ld. AO based on the directions given by the ld. PCIT undertook the enquiry, investigation and examination in regard to the issue pointed out by him and completed the reassessment by making an addition of Rs.2,37,53,300/- as unexplained credit entries under section 68. In this respect, he held that assessee failed to explain the source of capital introduced which is not supported with proper supporting documents. Order passed by ld. AO giving effect to the revisionary order is dated 13.03.2025 passed under section 147
read with section 263 read with section 144 (B) which is placed on record by the learned Counsel in the course of hearing before us. In this respect, learned Counsel pointed out that first appeal before ld. CIT(A) has been filed by the assessee against this effect giving order which is pending for disposal.
4. From the chronology of proceedings as detailed above, it is evident that assessee made a choice for redressal of his grievance by not contesting on the revisionary order but to go for first appeal against the effect giving order passed based on the directions given in the revisionary order. It is now, after a lapse of 399 days that assessee has 8
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come up in appeal before the Tribunal against the revisionary order passed under section 263 with the prayer for condonation of delay.
Assessee was well within his rights to file the present appeal within the prescribed limitation. However, he chose the other channel of redressal by now pleading ignorance of law. The explanation furnished by the assessee in his affidavit and the plea on ignorance of law does not establish the bona fide to inspire confidence in us for justifying condonation of delay. This present appeal is nothing but taking another chance which reflects exploiting the process of law.
4.1. The conduct of assessee and the averments in the affidavit do not fall under "sufficient cause" required for the condonation of delay.
Phrases like "liberal approach", "justice oriented approach" and cause for the advancement of "substantial justice" cannot be employed to defeat the law of limitation so as to allow stale matters or as a matter of fact, dead matters to be revived and reopened by taking aid of the Limitation Act. The law of limitation is founded on public policy and enshrined in the legal maxim "interest reipublicae ut sit finis litiun", i.e., it is for the general welfare that the period of limitation be put to litigation. Every public policy requires that there should be an end to the litigation, otherwise it would be a dichotomy, if the litigant is made immortal, vis-à-vis the right in parties. Tax statute has provided for limitation for filing appeals before various authorities and the same provides discretionary power to the authorities for condoning delay, provided there is sufficient cause with reasonable explanation, establishing bonafides of the case.
In the present set of facts as elaborated above, and the redressal approach adopted by the assessee at the first instance, the delay of 399
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days in filing the present appeal against the revisionary order is not within the stipulated timeline and does not fall within the canons of "sufficient cause". Accordingly, as discussed above, we do not find any reason to condone the delay of 399 days in filing the present appeal before the Tribunal, to admit the appeal for its adjudication. Thus, the appeal so filed is dismissed, on account of the aforesaid delay, without its admission for adjudication.
5.1. In the result, appeal of the assessee is dismissed.
Order pronounced in the open court on 18th December, 2025. (Sandeep Gosain)
Accountant Member
Dated: 18th December, 2025
saumya, Sr.P.S.
Copy to :
1. The Appellant
2. The Respondent
3. DR, ITAT, Mumbai
4. Guard File
5. CIT
BY ORDER
(Dy./Asstt.