PRAGATI MARINE SERVICES PVT LTD,BELAPUR, NAVI MUMBAI vs. INCOME TAX DEPARTMENT, NAVI MUMBAI, NAVI MUMBAI

आयकर अपीलीय अिधकरण �ायपीठ मुंबईम�। IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, MUMBAI BEFORE SHRI NARENDER KUMAR CHOUDHRY, JM & SHRI ARUN KHODPIA, AM I.T.A. Nos. 326, 327, 328, 329 & 330/Mum/2026 (Assessment Years: 2013-14, 2014-15, 2015-16, 2016-17 & 2017-18) Pragati Marine Services Income Tax Department Private Limited Navi Mumbai-400614 Vs. 111 Skylark, Plot No.63, CBD Belapur, Navi Mumbai-400614 PAN: AAFCP2486D Assessee- अपीलाथ� / Appellant Revenue-��थ�/ Respondent :

Assessee by : Shri Swapnil Shah Revenue by : Shri Ajay Soneji, Sr. DR : 02.07.2026 Date of Hearing : 22.09.2026 Date of Pronouncement

O R D E R Per Bench: The captioned appeals are filed by the assessee against the separate orders of the Commissioner of Income Tax Appeals, National Faceless Appeal Centre (NFAC), Delhi [in short, “the Ld. CIT(A)”], dated 12.01.2023 for the Assessment Years (AYs) 2013-14, 2014-15 and 2015-16 whereas the date of orders for AY 2016-17 and 2017-18 is 17.01.2023. All the aforesaid orders arise from penalty orders u/s 200A(1) of the Income Tax Act, 1961 [in short, “the Act”] on their respective dates.

ITA Nos. 326-330/Mum/2026 Pragati Marine Services Pvt Ltd. 2. Since the aforesaid five appeals of the same assessee arise against identical issue, on similar facts and circumstances, therefore are heard together and decided under this consolidated order.

ITA Nos. 326-330/Mum/2026 Pragati Marine Services Pvt Ltd. in the absence of any response or effective compliance on the part of the assessee. Aggrieved by the respective orders of the Ld. CIT(A), the assessee has preferred the present appeals before the Tribunal.

ITA Nos. 326-330/Mum/2026 Pragati Marine Services Pvt Ltd. “10.1 In the case of the appellant has merely stated that it has uploaded delayed TDS returns due to financial problems. However, there is nothing filed by the appellant to support its contention in response to the notices issued. In the given circumstances, the contention of the appellant that it has uploaded delayed TDS returns due to financial problems even when TDS was being deducted and is unacceptable. To my mind the reason given by the appellant is not a sufficient cause for delay in upload the TDS returns and late payment of TDS deducted. The impugned order in appeal is in fact the intimation under section 200A(1)/201(1A) of the Act and while examining the correctness of the intimation u/s 200A(1)/201(1A), one has to be guided by the mandate of section of 200A and 201(1A), which, at the relevant point of time, permitted computation of amount recoverable from, or payable to, the tax deductor after making the adjustments on account of "arithmetical errors" and "incorrect claims apparent from any information in the statement" or "default in payment of interest" and "TDS payable or refundable". It is accordingly upheld that levy of fee u/s 234E(u/s 200A after 01.06.2015), interest on late payment and interest u/s 220 are within the scope of permissible adjustment. Accordingly, the case of the appellant fails on merits too.”

ITA Nos. 326-330/Mum/2026 Pragati Marine Services Pvt Ltd. services, including ship management and allied marine operations to various ship owners. The principal capital assets of the Appellant comprise marine vessels and barges deployed for transportation and transhipment of containers and cargo from large ocean-going vessels to ports, jetties and other designated destinations where larger vessels cannot berth due to draft restrictions or operational limitations. These vessels constitute the principal revenue-generating assets of the Appellant and are indispensable for carrying on its business activities. 1.2) GENUINE FINANCIAL HARDSHIP BEYOND THE CONTROL OF THE APPELLANT The delay in filing the present appeals is neither deliberate nor intentional but has occurred solely due to exceptional financial hardship and circumstances entirely beyond the control of the Appellant. In the year 2021, the Appellant suffered a catastrophic business loss when its vessel was permanently lost due to Cyclone Tauktae. Although a valid insurance claim was duly lodged with the insurance company immediately thereafter, the claim has remained unsettled for an inordinately long period. Consequently, the Appellant has been deprived of the insurance proceeds which were indispensable for revival of its business operations and discharge of its financial obligations. The prolonged non-settlement of the insurance claim resulted in severe financial distress. Consequently, the bank accounts of the Appellant were classified as Non- Performing Assets (NPA), attached by the lending institutions and subjected to operational restrictions owing to statutory liabilities and MSME credit obligations. The attachment and freezing of the bank accounts completely paralysed the business operations of the Appellant and rendered it financially incapable of pursuing its statutory remedies within the prescribed period. The present case is a classic instance where the maxim Lex Non Cogit ad Impossibilia the law does not compel a person to do that which he cannot possibly perform-squarely applies. 1.3) DELAY OCCASIONED BY CIRCUMSTANCES BEYOND THE CONTROL OF THE APPELLANT The unprecedented financial crisis placed the Appellant under immense financial pressure and mental stress. The Appellant remained continuously engaged in resolving pressing issues with banks, statutory authorities, creditors and the insurance company. During this period, the Appellant was genuinely unable to arrange the financial resources and professional assistance necessary for preferring the present appeals within the prescribed period of limitation. The delay was thus occasioned by unavoidable and bona fide circumstances and not by negligence, indifference or deliberate inaction. The Appellant derived no advantage whatsoever from such delay, nor was the delay adopted as a strategy to prolong the proceedings. The facts of the present case attract the well-settled maxim Impotentia Excusat Legem, namely that impossibility of performance constitutes a valid legal excuse where compliance has been rendered impossible by circumstances beyond the control of the party. 5

ITA Nos. 326-330/Mum/2026 Pragati Marine Services Pvt Ltd.

Immediately upon restoration of its financial position to the extent necessary to pursue legal remedies, the Appellant acted with utmost diligence and has approached this Hon'ble Tribunal without any further delay. 1.4) ABSENCE OF MALA FIDES The Appellant respectfully submits that the explanation furnished for the delay is reasonable, bona fide and supported by contemporaneous circumstances. The delay is neither intentional nor actuated by any mala fide motive. It is a settled principle of law that where substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to prevail. Procedural law is intended to advance the cause of justice and not to thwart it. The maxim Ubi Jus Ibi Remedium aptly reflects the principle that a litigant possessing a meritorious cause ought not to be denied an opportunity of adjudication merely because compliance with limitation became impossible owing to circumstances beyond his control. The Appellant therefore respectfully submits that the present case deserves a liberal, pragmatic and justice-oriented approach while considering the application for condonation of delay. 1.5) JUDICIAL PRECEDENT SUPPORTING LIBERAL APPROACH Reliance on the Judgment of the Gujarat High Court The Hon'ble Gujarat High Court in Nandlal Namdev Otwani v. Vijay Jayprakash Ahuja considered a case where the applicant pleaded that he could not file the appeal within the prescribed period due to severe financial crisis and lack of funds. Upon considering the material placed on record, the Hon'ble Court accepted financial hardship as constituting sufficient cause for condonation of delay. The Hon'ble Court observed: "Considering the prevalent economic condition of the parties as well as even of the Country, the financial crisis can be considered to be one of the grounds for condonation of delay." (Point No 14, Page 6) The Hon'ble Court further observed: "It cannot be presumed that a person would adopt dilatory tactics except in compelled circumstances or circumstances out of his control." (Point No 14, Page 6) The Hon'ble Court further held: "If the explanation does not smack of mala fides or it is not put forth as part of a dilatory strategy, the Court must show utmost consideration to the suitor." (Point No 8.3, Page 4)

ITA Nos. 326-330/Mum/2026 Pragati Marine Services Pvt Ltd. Applying the aforesaid principles, the Hon'ble Gujarat High Court condoned the delay after holding that the applicant had established sufficient cause and that no prejudice would be caused to the opposite party if the matter was decided on merits. The ratio laid down in the aforesaid judgment applies with full force to the present case. The explanation tendered by the Appellant neither discloses any mala fide intention nor any attempt to gain an unfair advantage by delaying the proceedings. On the contrary, the facts unmistakably establish that the delay occurred solely because circumstances beyond the control of the Appellant rendered timely compliance impossible. This Hon'ble Tribunal may therefore be pleased to adopt a liberal, justice- oriented and pragmatic approach while exercising its discretionary jurisdiction for condonation of delay.” 12. Considering the aforesaid submissions, as set out in the written submissions filed before us, it is stated that the assessee was passing through a period of severe financial hardship and was under considerable financial pressure and mental stress, which, according to the assessee, were circumstances beyond its control. It is submitted that such circumstances constituted sufficient cause for the delay in complying with the statutory requirements as well as in filing the appeals within the prescribed period. In support of the aforesaid proposition, reliance has been placed upon the decision of the Hon’ble Gujarat High Court in the case of Nandlal Namdev Otwani vs. Vijay Jayprakash Ahuja.

ITA Nos. 326-330/Mum/2026 Pragati Marine Services Pvt Ltd. 14. We have considered the aforesaid submissions and the material available on record. Having regard to the overall facts and circumstances of the present case, we consider it appropriate to provide the assessee one further opportunity to represent its case before the Ld. CIT(A). At the same time, we find that the written submissions furnished by the assessee in support of the request for condonation of delay are not accompanied by any documentary evidence substantiating the stated circumstances of financial hardship, financial pressure and mental stress. Accordingly, while restoring the appeals to the file of the Ld. CIT(A), we consider it appropriate to direct the assessee to place on record such supporting material and evidence as may substantiate the circumstances relied upon for explaining the delay, so that the request for condonation may be considered in accordance with law and in the light of the judicial precedents relied upon by the assessee.

ITA Nos. 326-330/Mum/2026 Pragati Marine Services Pvt Ltd. 16. Our aforesaid view is supported by the view taken by Hon’ble Bombay High Court in the case of Commissioner of Income Tax vs. Premkumar Arnjundas Luthra (Huf) [(2016) 69 taxmann.com 407 (Bombay)] wherein the findings of Hon’ble Bombay High Court are as under:

"8. From the aforesaid provisions, it is very clear once an appeal is preferred before the CIT(A), then in disposing of the appeal, he is obliged to make such further inquiry that he thinks fit or direct the AO to make further inquiry and report the result of the same to him as found in Sec. 250 of the Act. Further, Sec. 250(6) of the Act obliges the CIT(A) to dispose of an appeal in writing after stating the points for determination and then render a decision on each of the points which arise for consideration with reasons in support. Sec. 251(1)(a) and (h) of the Act provide that while disposing of appeal the CIT(A) would have the power to confirm, reduce, enhance or annul an assessment and/or penalty. Besides Explanation to sub-s. (2) of s. 251 of the Act also makes it clear that while considering the appeal, the CIT(A) would be entitled to consider and decide any issue arising in the proceedings before him in appeal filed for its consideration, even if the issue is not raised by the appellant in its appeal before the CIT(A). Thus once an assessee files an appeal unders. 246A of the Act, it is not open to him as of right to withdraw or not press the appeal. In fact the CIT(A) is obliged to dispose of the appeal on merits. In fact w.e.f. 1st June, 2001 the power of the CIT(A) to set aside the order of the AO and restore it to the AO for passing a fresh order stands withdrawn. Therefore, it would be noticed that the powers of the CIT(A) are co-terminus with that of the AO i.e. he can do all that A.O could do. Therefore, just as it is not open to the AO to not complete the assessment by allowing the assessee to withdraw its return of income, it is not open to the assessee in appeal to withdraw and/or the CIT(A) to dismiss the appeal on account of non-prosecution of the appeal by the assessee. This is amply clear from the s. 251(1)(a) and (b) and Explanation to Sec. 251(2) of the Act which requires the CIT(A) to apply his mind to all the issues which arise from the impugned order before him whether or not the same has been raised by the appellant before him. Accordingly, the law does not empower the CIT(A) to dismiss the appeal for non-prosecution as is evident from the provisions of the Act."

ITA Nos. 326-330/Mum/2026 Pragati Marine Services Pvt Ltd. active responses, without which, the Ld. First Appellate Authority would be at liberty to decide the issues in accordance with the mandate of law.

Order pronounced in the open court on 22-09-2026.

Sd/- Sd/- (ARUN KHODPIA) (NARENDER KUMAR CHOUDHRY) JUDICIAL MEMBER ACCOUNTANT MEMBER

Mumbai, Dated : 22-09-2026. Ankit K., Sr. PS

Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. DR, ITAT, Mumbai 4. Guard File 5. CIT

BY ORDER,

(Dy./Asstt. Registrar) ITAT, Mumbai