SARAH FAISAL HAWA,MUMBAI vs. DY COMMISSIONER OF INCOME TAX CIRCLE 22 1 MUMBAI, MUMBAI

Pursuant thereto, the Assessing Officer, vide Order Giving Effect (OGE) dated 29.03.2023, sustained an addition of Rs.5,00,000/- u/s 68 of the Act for want of satisfactory documentary evidence.

The Assessee thus being aggrieved challenged such addition before the Ld. Commissioner, contending that the amount represented an outstanding liability towards Technology Frontiers (I) Pvt. Ltd. against preferential shares allotted for Rs.75,00,000/-, of which Rs.70,00,000/- had already been paid and the balance was discharged subsequently. However, the Ld. Commissioner affirmed the addition, holding that the Assessee had failed to establish the genuineness of the transaction.

The instant appeal has been filed with a delay of 30 days. Considering the reasons explained by the Assessee in the application, duly supported by a sworn affidavit, and finding the delay to be meagre and the explanation reasonable and sufficient, we, guided by the principles laid down by the Hon'ble Supreme Court in Collector, Land Acquisition v. Mst. Katiji, (1987) 167 ITR 471 (SC), condone the delay in the interest of substantial justice. Thus the delay is condoned.

The Ld. Counsel submitted that the Tribunal's order dated 11.09.2017 was received by the office of the Ld. Principal Commissioner on 30.10.2017, whereas the OGE was passed only on 29.03.2023, much beyond the statutory limitation. The Assessee relied upon the judgment of the Hon'ble Karnataka High Court in DCIT v. Biesse India Pvt. Ltd., [2025] 178 taxmann.com 282 (Karn.).

The Ld. DR, on the other hand, relied upon the Assessing Officer's report dated 17.08.2026, wherein the receipt of the Tribunal's order on 30.10.2017 and expiry of the ordinary limitation on 31.01.2018 were admitted. However, the delay was attributed to administrative exigencies, cadre restructuring and frequent transfers of the concerned officers, with a request for condonation in the interest of Revenue.

Having heard the parties and perused the material available on record, we observe that the receipt of the Tribunal's order dated 11.09.2017 by the Ld. Principal Commissioner on 30.10.2017 is undisputed. Section 153(5) prescribes three months from the end of the month of receipt of the appellate order for passing a consequential order, subject to the statutory provisos. Since the earlier Tribunal directed verification of facts and an opportunity of hearing, the second proviso to section 153(5), read with section 153(3), becomes applicable. Accordingly, even applying the longer period of nine months from the end of the financial year in which the Tribunal's order was received, the limitation expired on 31.12.2018. However, the Assessing

The Hon'ble Karnataka High Court in DCIT v. Biesse India Pvt. Ltd. (supra) affirmed the quashing of a consequential order passed beyond the statutory limitation u/s 153(5) of the Act. In the instant case, even the longer period contemplated under section 153(3) had expired. The administrative exigencies, cadre restructuring and transfers pleaded by the Revenue cannot override the mandatory statutory limitation, nor has any applicable statutory extension or exclusion been demonstrated.

Consequently, we hold that the OGE dated 29.03.2023 is barred by limitation u/s 153(5) read with section 153(3) of the Act and is legally unsustainable. Accordingly, the additional ground raised by the Assessee is allowed, and the OGE dated 29.03.2023, along with the impugned appellate order dated 14.10.2025, insofar as they sustain the addition of Rs.5,00,000/- u/s 68 of the Act, is quashed. The addition consequently stands deleted. The remaining grounds on merits and consequential interest are rendered academic and are left open.

In the result, the appeal of the Assessee stands, allowed on the aforesaid legal aspect.