SPR PUBLICATIONS PRIVATE LIMITED,HYDERABAD vs. ITO WARD-3(1), HYDERABAD

आदेश / ORDER PER VIJAY PAL RAO, VICE PRESIDENT:

These two appeals by the Assessee are directed against the two separate Orders of the learned CIT(A) both dated 26.11.2025 arising from penalty Orders passed u/sec.271B and 271(1)(b) of the Income Tax Act [in short "the Act"], 1961, respectively, for the assessment year 2014-2015.

ITA.No.2294/Hyd./2025 – A.Y. 2014-2015:

1) “The order passed by the Ld. CIT (A) under section 250 dated 26- 11-2025 is erroneous both on facts and in law to the extent the order is prejudice to the interests of the appellant.

2) The Ld. CIT (A) has erred in dismissing the appeal holding that it is time-barred.

3) The Ld. CIT (A) has erred in holding that the delay of 501 days in filing the appeal has not been satisfactorily explained by the appellant.

3 ITA.Nos.2294 & 2295/Hyd./2025

4) The Ld. CIT(A) ought to have admitted the appeal and ought to have heard the appeal on the basis of merits rather than dismissing the appeal without appreciating that the delay is due to reasons which are beyond the control of the appellant.

5) Without prejudice to the above, the Ld. CIT(A) erred in confirming the penalty u/s 271B of the Act, without considering the fact that the quantum assessment itself was set aside by the CIT(A) and is pending for fresh adjudication before the AO and such levy is premature and unsustainable.

6) Without prejudice to the above, the Ld. CIT(A) ought to have considered that the AO erred in imposing the penalty for failure of Audit report without appreciating the fact that the assessee could not maintain proper books of accounts.

7) Without prejudice to the above, the Ld. CIT(A) ought to have appreciated the fact that 44AB did not arise when no books of accounts were maintained by the assessee.

8) The appellant may, add OR alter OR amend OR modify OR substitute OR delete and/OR rescind all OR any of the grounds of appeal at any time before OR at the time of hearing of the appeal.”

4 ITA.Nos.2294 & 2295/Hyd./2025 passed ex-parte u/sec.144 of the Act on 28.03.2022 and thereafter, the penalties were also levied vide Orders both dated 21.09.2022. The assessee company is non-operational and has had no business for the last many years. There were no staff members, employees or individuals under assessee’s pay rolls. Therefore, due to inactive status there was no knowledge of any ongoing proceedings. Further, due to non- availability of the staff and particularly, the accountant who is looking after the company accounts the assessee could not participate in the proceedings before the Assessing Officer and therefore, there was no knowledge of initiating the proceedings for levy of penalty. Only when the assessee contacted its Accountant who informed the Director of the assessee company about the orders passed by the Assessing Officer as well as penalty orders the assessee came to know of the same. Thus, the learned Authorised Representative of the Assessee has submitted that when the assessee has closed its business and there were no employee or any other staff to look after the affairs, these orders passed by the authorities below were not in the knowledge of the assessee

5 ITA.Nos.2294 & 2295/Hyd./2025 that has caused the delay in filing the appeals before the learned CIT(A). The learned Authorised Representative of the Assessee has filed copy of the affidavit filed before the learned CIT(A) explaining the cause of delay in filing the appeals. He has further submitted that the quantum appeal was decided by the learned CIT(A) vide even dated Order i.e., 26.11.2025 whereby the matter has been remanded to the record of the Assessing Officer for fresh adjudication therefore, the penalty levied by the Assessing Officer u/sec.271B as well as u/sec.271(1)(b) were also be remanded to the record of the Assessing Officer for reconsideration after the outcome of the remand proceedings in the quantum matter. The learned Authorised Representative of the Assessee has further submitted that the alleged non-compliance of notices issued u/sec.142(1) was due to Covid-2019 pandemic period as all the notices were issued by the Assessing Officer in the year 2021. Further, the learned Authorised Representative of the Assessee has submitted that when there was no business activity then, the question of audit of the books of account does not arise. The Assessing Officer has passed the

6 ITA.Nos.2294 & 2295/Hyd./2025 assessment order on the basis of Form-26AS not representing the turnover of the assessee. Thus, he has pleaded that the delay in filing the appeal before the learned CIT(A) may be condoned and in view of the matter in the quantum appeal remanded by the learned CIT(A), these matters may also be remanded to the record of the Assessing Officer for fresh adjudication.

7 ITA.Nos.2294 & 2295/Hyd./2025

5.1. The learned CIT(A) has declined to condone the delay of 501 days in filing the appeals against the penalty

8 ITA.Nos.2294 & 2295/Hyd./2025 order passed u/sec.271B as well as u/sec.271(1)(b) of the Act. As regards the penalty levied u/sec.271B the assessee has explained that there was no business for the last many years and therefore, the question of audit of the books of account does not arise. This fact was also considered by the learned CIT(A) while passing the order in the appeal against the assessment order and remanded the matter to the record of the Assessing Officer in Para no.5.5 as under:

“5.5. I have considered the submission of the appellant and also the assessment order and find that the impugned assessment order was passed ex-parte u/s 144 for non- compliance from assessee's side for want of all the details, Further, as the documents/explanation put before me was never presented before the Id AO, therefore, in the interest of fairness and justice, it is necessary to set aside the assessment order made under section 144 of the Act, given the totality of facts and to examine the documents so filed before me at the time of appellate proceeding only. Therefore, in view of the power conferred to the CIT(A) by proviso to section 251(1)(a) of Finance (No.2) Act 2024 inserted w.e.f from 1.10.2024 to enable the appellant a proper opportunity of being heard, I hereby set aside the assessment order that was passed u/s 144 r.w.s 147 of the Act. As a result, the assessment order is set aside and the AO is directed to make a fresh assessment after making necessary enquiry. It is

9 ITA.Nos.2294 & 2295/Hyd./2025 obvious that the appellant should be given proper opportunity to explain the source of the cash so deposited in his bank account. The grounds of appeal so taken on the issue are, thus, allowed for statistical purpose.”

5.2. Thus, it is clear that the learned CIT(A) after considering the fact that the assessment order was passed ex-parte u/sec.144 when there was no representation on behalf of the assessee before the Assessing Officer the matter was remanded to the record of the Assessing Officer for examination of the documents filed by the assessee at the time of appellate proceedings and granting proper opportunity of being heard to the assessee. Therefore, the outcome of the remand proceedings in the quantum matter will have a direct bearing on this aspect of the requirement of audit report as well as the compliance of notice u/sec.142(1) issued during the Covid period. Accordingly, in the facts and circumstances of the case and in the interest of justice, we take a lenient view and condone the delay of 501 days in filing the appeals before the learned CIT(A). Hence, the impugned orders of the learned CIT(A) are set aside and since the quantum matter was also remanded to the record of the

10 ITA.Nos.2294 & 2295/Hyd./2025 Assessing Officer for fresh adjudication therefore, these matters are also remanded to the record of the Assessing Officer for reconsideration as per the outcome of the remand proceedings in quantum matter. Needless to say, the assessee be given a proper opportunity of hearing before passing the fresh order.

Order pronounced in the open court on 03.07.2026

Sd/- Sd/- MADHUSUDAN SAWDIA VIJAY PAL RAO ACCOUNTANT MEMBER VICE PRESIDENT

Hyderabad, dated 03rd day of July, 2026.

VBP

11 ITA.Nos.2294 & 2295/Hyd./2025 Copy to: SPR PUBLICATIONS PRIVATE LIMITED, C/O., 6-3-655/2/3, P. MURALI & CO., 1 CHARTERED ACCOUNTANTS, SOMAJIGUDA, HYDERABAD-500082, TELANGANA 2 ITO WARD-3(1), OFFICE OF ITO WARD-3(1), HYDERABAD, TELANGANA 3 THE Pr. CIT, HYDERABAD. 4 THE D.R., ITAT, HYDERABAD A-BENCH, HYDERABAD. 5 GUARD FILE