Sheetal Dattatray Patil Vs PCIT (ITAT Mumbai Bench)
Ignorance Cannot Rewind the Revision Clock: ITAT Refuses 689-Day Delay Against Section 263 Order After Consequential Assessment Completed a Full Appellate Round
Facts of the Case
The assessee’s original assessment was completed u/s 143(3) r.w.s. 144B on 18.04.2021, determining total income at ₹11,36,910. This included an addition of ₹4,21,960 u/s 56(2)(x).
The PCIT subsequently examined the assessment record & found that the AO had allegedly failed to conduct the required inquiry regarding the complete source of funds used for purchasing an immovable property valued at ₹37 lakh.
Accordingly, the PCIT invoked revisionary jurisdiction u/s 263 & passed an order dated 30.03.2024 setting aside the original assessment for fresh examination.
Pursuant to the revisionary order, the AO completed a consequential assessment after examining the source of investments made by the assessee & the assessee’s spouse, including an amount of ₹24 lakh. The total income was enhanced to ₹50,60,660.
Consequential Assessment Already Appealed
The assessee challenged the consequential assessment before the first appellate authority, which confirmed the addition.
Thereafter, the assessee approached the ITAT in ITA No. 963/Mum/2026. By order dated 13.05.2026, the Tribunal restored the assessment to the AO for de novo adjudication.
Thus, the consequential proceedings flowing from the section 263 order had already travelled through the entire first round of assessment & appellate proceedings. Pursuant to the Tribunal’s remand order, the matter was again pending before the AO for fresh adjudication.
Only thereafter did the assessee file a separate appeal challenging the foundational revisionary order passed u/s 263.
Delay of 689 Days
The appeal against the section 263 order was filed with a delay of 689 days.
The assessee explained that the delay occurred because of limited financial resources & complete unfamiliarity with income-tax law and procedure. It was claimed that the assessee did not know that the order passed u/s 263 had to be challenged separately.
The assessee also claimed a lack of familiarity with notices & communications transmitted through email or uploaded on the Income Tax portal. It was therefore submitted that the appellate remedy against the revisionary order remained unknown.
The assessee sought condonation of the delay & adjudication of the section 263 challenge on merits.
Ignorance Was Not Sufficient Cause
The Tribunal acknowledged that some latitude may be granted where a litigant satisfactorily establishes that the delay resulted from circumstances genuinely beyond his or her control.
However, the expression “sufficient cause” cannot be interpreted so liberally that the statutory limitation period becomes meaningless.
A general assertion of ignorance of law, procedure or the availability of an appellate remedy cannot, by itself, explain an extraordinarily prolonged delay. The explanation must be supported by cogent evidence & must account for the entire period of delay with reasonable diligence and particularity.
In the present case, the assessee’s explanation remained broad & unsupported. It did not provide a satisfactory date-wise account of why no appeal against the PCIT’s order was filed for 689 days.
Conduct in Subsequent Proceedings Was Significant
The Tribunal found the assessee’s conduct in the consequential proceedings particularly relevant.
The assessee had participated in the fresh assessment conducted pursuant to the section 263 order, filed an appeal against that assessment & thereafter approached the Tribunal with legal assistance.
All those proceedings had their genesis in the revisionary order. Therefore, despite being actively advised and pursuing appellate remedies against the consequential assessment, the assessee did not challenge the foundational section 263 order within a reasonable time.
This conduct weakened the contention that the delay arose merely because the assessee was unaware of the legal remedy or electronic communications.
Earlier ITAT Order Could Not Be Indirectly Unsettled
The Tribunal identified another procedural difficulty.
Its earlier order dated 13.05.2026 had already restored the consequential assessment to the AO. That order had attained operative finality between the parties & a second round of assessment proceedings had commenced within the parameters fixed by the Tribunal.
If the highly delayed appeal against the section 263 order were now admitted & the revision itself declared invalid, it would undermine the foundation of the consequential proceedings. It could render the earlier appellate order & the remand proceedings otiose or internally inconsistent.
The ITAT held that judicial propriety & orderly administration of appellate proceedings required respect for the operative directions already issued by a Coordinate Bench.
The present appeal could not be used as a collateral method to reopen or disturb the course of litigation already determined by the earlier Tribunal order.
This factor did not replace the statutory test of sufficient cause, but reinforced why discretionary condonation was inappropriate.
ITAT’s Decision
The Tribunal held that the assessee had failed to establish sufficient cause for the delay of 689 days.
The delay was not condoned & the appeal challenging the section 263 order was dismissed as barred by limitation. The merits of the revisionary jurisdiction were therefore not examined.
The assessee also requested that the remanded assessment be conducted by the jurisdictional AO instead of the Faceless Assessment Unit. The Tribunal declined to adjudicate this request because it did not arise from the section 263 order.
However, it permitted the assessee to seek appropriate clarification or correction of the earlier ITAT order dated 13.05.2026 in accordance with law.
Authors’ Comments
The ruling demonstrates that condonation depends not merely upon the length of delay but upon the quality & completeness of the explanation. Ignorance of the right to appeal rarely succeeds when the taxpayer was simultaneously pursuing connected proceedings with professional assistance.
The crucial procedural mistake was challenging only the consequential assessment while leaving the parent section 263 order untouched. A revisionary order & the assessment passed pursuant to it are separate appealable orders; challenging one does not automatically challenge the other.
The decision offers a practical warning: attack the root when it is appealable-waiting until the branches complete an appellate cycle may make the root legally unreachable.
FULL TEXT OF THE JUDGMENT/ORDER OF ITAT, MUMBAI BENCH
The present appeal has been preferred by the assessee against the order dated 30.03.2024 passed by the learned Principal Commissioner of Income-tax–20, Mumbai, in exercise of his revisionary jurisdiction under section 263 of the Income-tax Act, 1961, for the assessment year 2018–19.
2. At the outset, it is noticed that the appeal has been filed with a delay of 689 days. The learned counsel for the assessee has placed before us a series of orders passed in the assessee’s case and submitted that the delay occurred because the assessee, being a person of limited financial means and wholly unfamiliar with tax laws and procedures, was unaware that the order passed under section 263 was required to be challenged independently. It was further submitted that the assessee was neither conversant with notices and communications transmitted through e-mail and the Income-tax portal nor aware of the appellate remedy available against the revisionary order.
3. The relevant chronology emerging from the record is that the original assessment under section 143(3) read with section 144B was completed on 18.04.2021, determining the total income of the assessee at ₹11,36,910, which included an addition of ₹4,21,960 under section 56(2)(x). Thereafter, the learned PCIT, vide the impugned order dated 30.03.2024, invoked his revisionary jurisdiction under section 263 and set aside the assessment order, observing that the Assessing Officer had failed to make the requisite enquiry regarding the entire source of funds utilised for the purchase of an immovable property valued at ₹37 lakh.
4. Pursuant to the aforesaid revisionary order, the Assessing Officer framed a consequential assessment determining the total income of the assessee at ₹50,60,660 after examining the source of investment made by the assessee and his wife, including the amount of ₹24 lakh. The addition so made was carried in appeal before the first appellate authority, who confirmed the same. The assessee thereafter preferred an appeal before the Tribunal in ITA No. 963/Mum/2026. The Tribunal, vide order dated 13.05.2026, restored the matter to the file of the Assessing Officer for de novo adjudication. Thus, the assessment proceedings consequential to the order passed under section 263 have already travelled through the appellate hierarchy and are presently pending before the Assessing Officer pursuant to the specific directions of the Tribunal.
5. We have considered the explanation furnished for the inordinate delay of 689 days. The only explanation offered is that the assessee was unaware of the legal remedy available against the order passed under section 263 and did not have knowledge of the notices or communications uploaded on the electronic portal or sent through e-mail. While some latitude may ordinarily be shown where a litigant satisfactorily demonstrates that the delay arose from circumstances genuinely beyond his control, the expression “sufficient cause” cannot be construed so liberally as to render the statutory period of limitation otiose. A mere assertion of ignorance of law, procedure or the availability of an appellate remedy, unsupported by any cogent material explaining the entire period of delay, cannot constitute sufficient cause for condonation of such an extraordinarily prolonged delay.
6. It is also significant that the assessee participated in the consequential assessment proceedings, pursued the statutory appeal against the consequential assessment and thereafter approached the Tribunal, where the matter was restored to the Assessing Officer for de novo adjudication. The assessee was, therefore, pursuing remedies with legal assistance in proceedings which had their very genesis in the order passed under section 263. Despite this, no satisfactory explanation has been furnished as to why the foundational revisionary order was not challenged for a period of 689 days. The plea now raised is general and does not explain the delay with the diligence and particularity which an application involving such an inordinate lapse necessarily demands.
7. There is yet another material aspect which cannot be overlooked. The consequential assessment made pursuant to the order under section 263 has already been subjected to appellate scrutiny, culminating in the Tribunal’s order dated 13.05.2026 restoring the matter to the Assessing Officer for fresh adjudication. That order has set in motion a second round of assessment proceedings within the parameters laid down by the Tribunal. If, at this highly belated stage, the present appeal against the foundational order under section 263 were to be entertained and the validity of that order examined, any finding regarding an infirmity or illegality therein would necessarily unsettle the very substratum of the subsequent proceedings and, in effect, tinker with the operative directions already issued by the Tribunal in the second round of litigation. It could render the earlier appellate order and the proceedings undertaken pursuant thereto otiose or internally inconsistent.
8. Judicial propriety and orderly administration of appellate proceedings require that an order of the Tribunal, which has attained operative finality between the parties and pursuant to which proceedings are presently pending before the Assessing Officer, should not be indirectly disturbed through the entertainment of a grossly belated appeal against the anterior order, particularly when the threshold requirement of showing sufficient cause for the delay has not been satisfied. The present appeal cannot be employed as a collateral means of reopening or unsettling the course of proceedings already determined by a coordinate order of the Tribunal. This consideration does not substitute the statutory test governing condonation of delay; it reinforces why discretionary indulgence cannot be extended in the facts and peculiar procedural history of the present case.
9. Accordingly, we are unable to hold that the assessee was prevented by sufficient cause from filing the appeal within the prescribed period. The delay of 689 days is, therefore, not condoned and the appeal is dismissed as barred by limitation.
10. Before parting, the learned counsel submitted that the proceedings restored by the Tribunal should, if permissible, be conducted by the jurisdictional Assessing Officer. The learned Departmental Representative, on the other hand, submitted that under the applicable administrative guidelines, cases involving a complete set-aside are assigned to the Faceless Assessment Unit, whereas cases involving only a partial set-aside are dealt with by the jurisdictional Assessing Officer. This issue neither arises from the impugned order under section 263 nor can it be adjudicated in the present appeal, which has been dismissed as time-barred. We, therefore, refrain from expressing any view thereon. If the assessee considers that any clarification is required in the Tribunal’s order dated 13.05.2026 passed in ITA No. 963/Mum/2026, it shall be open to him to seek an appropriate clarification or correction in accordance with law.
11. In the result, the appeal filed by the assessee is dismissed in the manner indicated above.
Order pronounced court on 04th day of September 2026.
