SANJAY NAYAR, MUMBAI vs. ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-19(3), MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH MUMBAI BEFORE SHRI SAKTIJIT DEY, VICE PRESIDENT & SHRI MAKARAND VASANT MAHADEOKAR, ACCOUNTANT MEMBER ITA No. 3370/Mum/2026 (Assessment Year: 2021-22) Sanjay Omprakash ACIT Circle -19(3) Nayar Piramal Chambers, 10, floor 5, 17C, Vs. Mumbai-400 012 Rushilla CHS M L Dhanukar Marg, Cumballa Hill, Mumbai-400 026 PAN/GIR No. ACMPN4670P (Applicant) (Respondent) Assessee by Shri N. A. Patade, Ld. AR Revenue by Shree Kumar C., Ld. DR Date of Hearing 22.06.2026 Date of Pronouncement 29.06.2026 आदेश / ORDER PER MAKARAND VASANT MAHADEOKAR, AM: The present appeal arise out of the order dated 27.01.2026 passed by the learned Addl./JCIT(A)-1, Delhi [hereinafter referred to as "the CIT(A)"] under section 250 of the Income-tax Act, 1961 [hereinafter referred to as "the Act"] for Assessment Year 2021-22. The impugned appellate order emanates from the intimation

2 ITA No. 3370/Mum/2026 Sanjay Omprakash Nayar dated 08.07.2022 issued by the Centralized Processing Centre ("CPC") under section 143(1) of the Act. Facts of the Case 2. Briefly stated, the facts are that the assessee is an individual and resident. During the year under consideration, the assessee earned income from generation of solar power through four eligible undertakings and claimed deduction under section 80-IA of the Act. The assessee filed his return of income for Assessment Year 2021-22 declaring total income of Rs.1,19,18,36,410/- after claiming deduction under section 80-IA amounting to Rs.1,59,31,404/-. 3. The return of income was processed by the CPC under section 143(1) of the Act vide intimation dated 08.07.2022. While processing the return, the CPC noticed that in Schedule VIA, deduction claimed under section 80-IA exceeded the amount reflected in Form No.10CCB. Accordingly, by invoking the provisions of section 143(1)(a)(ii) of the Act, the CPC restricted the deduction under section 80-IA from Rs.1,59,31,404/- to Rs.28,59,074/- and consequently made an adjustment of Rs.1,30,72,330/-. As a result, the total income was recomputed at Rs.1,20,49,08,740/- as against the returned income of Rs.1,19,18,36,410/- and a consequential demand of Rs.69,25,480/- was raised. 4. Before the CPC, the case of the assessee was that profits from four solar power undertakings qualified for deduction under

3 ITA No. 3370/Mum/2026 Sanjay Omprakash Nayar section 80-IA aggregating to Rs.1,59,31,404/-. According to the assessee, Form No.10CCB in respect of one undertaking had been successfully e-filed along with the return of income. However, due to a technical glitch on the Income-tax portal, Form No.10CCB pertaining to the remaining three undertakings could not be uploaded electronically. The assessee claimed that upon instructions received from the CPC helpdesk, the audit reports in Form No.10CCB relating to the remaining three undertakings were submitted through e-mails dated 09.02.2022, 16.02.2022 and 17.06.2022. The assessee also lodged various grievances on the Income-tax portal seeking resolution of the technical issue. 5. The CPC, however, accepted the claim only to the extent supported by the Form No.10CCB available on the system and restricted the deduction under section 80-IA to Rs.28,59,074/-, thereby disallowing the balance claim of Rs.1,30,72,330/-. 6. Aggrieved by the aforesaid adjustment, the assessee preferred an appeal before the learned CIT(A). However, the appeal came to be filed on 09.07.2025 against the intimation dated 08.07.2022, resulting in a delay of about 1,066 days. Along with the appeal, the assessee filed an application seeking condonation of delay under section 249(2) of the Act. 7. In support of the application for condonation of delay, the assessee reiterated that deduction under section 80-IA had been claimed in respect of four solar power undertakings. It was submitted that while Form No.10CCB for one undertaking had

4 ITA No. 3370/Mum/2026 Sanjay Omprakash Nayar been successfully e-filed, the audit reports relating to the remaining three undertakings could not be uploaded because of a technical glitch in the Income-tax portal. The assessee contended that after obtaining guidance from the CPC helpdesk, the audit reports were furnished through e-mails and repeated grievances were raised before the department. It was further submitted that despite such compliance, the CPC restricted the deduction only to the undertaking for which Form No.10CCB was available on record. The assessee also stated that he was subsequently informed that the Forms No.10CCB furnished through e-mails would not be considered and that the appropriate remedy was to file an appeal before the appellate authority. It was thus pleaded that the delay in filing the appeal was neither deliberate nor intentional and deserved to be condoned in the interest of substantial justice. 8. The learned CIT(A) considered the explanation offered by the assessee but found the same to be unsatisfactory. The CIT(A) observed that for condonation of delay, the reasons furnished must be convincing, acceptable and supported by proper explanation. According to the CIT(A), the explanation furnished by the assessee neither inspired confidence nor constituted sufficient cause for condonation of an inordinate delay of approximately 1,066 days. The CIT(A) further observed that the law of limitation is a substantive law, filing of an appeal within the prescribed period is the rule, and condonation of delay is an exception. It was held that judicial discretion to condone delay

5 ITA No. 3370/Mum/2026 Sanjay Omprakash Nayar can be exercised only when genuine and convincing reasons are demonstrated.

1 Re.: Validity of the Order passed by the CIT(A) u/s. 250 of the Act: 1 : 1 The [‘CIT(A)’] erred in not admitting and dismissing the appeal for being time barred by limitation. 1 : 2 The Appellant submits that considering the facts and circumstances of its case and the law prevailing on the subject, the CIT(A) ought to have appreciated the reasons for delay in filing the appeal and has thereby erred in not condoning the delay. 1 : 3 The Appellant submits that the CIT(A) be directed to condone the delay in filing the appeal and consider the merits of the issue for adjudication. Without prejudice to the above,

6 ITA No. 3370/Mum/2026 Sanjay Omprakash Nayar 2. Re.: Validity of the adjustments made to the returned income in terms of the Intimation issued u/s. 143(1) of the Act: 2 : 1 The CPC-Bangalore / Assessing Officer [‘AO’] has erred in making the adjustments to the total income of the Appellant as returned while processing the return of income in terms of section 143(1) of the Act. 2 : 2 The Appellant submits that considering the facts and circumstances of its case and the law prevailing on the subject, the action of the CPC-Bangalore / AO are misconceived, incorrect, erroneous and not in accordance with the law. 2 : 3 The Appellant submits that the CPC-Bangalore / AO be directed to delete the adjustments so made and re-compute its total income and the tax thereon accordingly. 3. Re.: Short granting of deduction u/s. 80-IA of the Act while computing the total income: 3 : 1 The CIT(A) / CPC-Bangalore / AO has erred in short granting the deduction of Rs.1,30,72,330/- u/s.80-IA of the Act while computing the total income. 3 : 2 The Appellant submits that considering the facts and circumstances of its case and the law prevailing on the subject, the Form 10CCB for one undertaking had been e-filed on the income-tax portal, however, due to technical glitch on the income- tax portal, Form No.10CCB for three undertakings was not e-filed but were filed vide email as per communication with the CPC helpdesk vis-à-vis the grievances raised with the Income Tax Department and thus the action of the CPC-Bangalore / AO, affirmed by CIT(A), in short granting deduction u/s.80-IA pertaining to those three undertakings is misconceived, incorrect, erroneous and not in accordance with the law. 3 : 3 The Appellant submits that the CIT(A) / CPC-Bangalore / AO be directed to grant full deduction u/s.80-IA of the Act as claimed in the return of income and to re-compute its total income and tax liability accordingly. 4 Re.: General:

7 ITA No. 3370/Mum/2026 Sanjay Omprakash Nayar 4 : 1 The Appellant craves leave to add, alter, amend, substitute and/or modify in any manner whatsoever all or any of the foregoing grounds of appeal at or before the hearing of the appeal. 11. Before us, the learned Authorised Representative (AR) submitted that during the relevant previous year, the assessee earned business income from generation of solar power through four eligible undertakings and accordingly claimed deduction under section 80-IA of the Act. It was submitted that in terms of section 80-IA(4), the assessee was entitled to deduction at the rate of 100% of the profits and gains derived from the eligible business. 12. The learned AR further submitted that though the date of commencement of operations of the solar power undertakings fell in Assessment Years 2016-17 and 2017-18, the initial assessment year from which deduction under section 80-IA had been claimed was Assessment Year 2019-20. For the year under consideration, namely Assessment Year 2021-22, the assessee claimed deduction under section 80-IA amounting to Rs.1,59,31,404/- in respect of profits derived from the said undertakings. 13. It was further submitted that as required under section 80- IA, the assessee was required to furnish an audit report in Form No.10CCB. According to the assessee, Form No.10CCB in respect of one undertaking was successfully e-filed. However, due to a technical glitch on the income-tax portal, Form No.10CCB relating to the remaining three undertakings could not be

8 ITA No. 3370/Mum/2026 Sanjay Omprakash Nayar uploaded electronically on or before the due date prescribed for filing the return of income. In support of the aforesaid contention, the assessee relied upon screenshots generated from the income- tax portal showing the technical issue encountered during the uploading process. The learned AR submitted that pursuant to instructions received from the CPC Helpdesk, the audit reports in Form No.10CCB relating to the remaining three undertakings were furnished through e-mails dated 09.02.2022, 16.02.2022 and 17.06.2022. It was further pointed out that several grievances were also lodged on the income-tax portal on 27.01.2022, 11.02.2022, 15.02.2022, 14.06.2022 and 17.06.2022. Copies of the audit reports in Form No.10CCB submitted through e-mail as well as copies of the grievances raised before the CPC were placed on record. 14. The learned AR submitted that in the response filed before the CPC, the assessee had specifically explained that profits from all the four solar power undertakings qualified for deduction under section 80-IA and that Form No.10CCB in respect of the remaining undertakings had already been furnished by e-mail after the technical glitch prevented electronic filing. It was thus contended that the deduction under section 80-IA ought not to have been denied merely on account of technical difficulties in uploading the audit reports on the portal, particularly when the audit reports had been prepared and furnished to the Department within a reasonable time and the assessee had

9 ITA No. 3370/Mum/2026 Sanjay Omprakash Nayar continuously pursued the matter by way of grievances and correspondence with the CPC. 15. The learned AR further submitted that the learned CIT(A), without appreciating the substance and surrounding circumstances of the case, declined to condone the delay in filing the appeal and dismissed the appeal in limine. It was contended that the learned CIT(A) proceeded to reject the application for condonation of delay solely by relying upon general principles governing limitation and certain judicial precedents without properly examining the factual background leading to the delay. 16. The learned AR therefore submitted that the impugned order of the learned CIT(A) deserves to be set aside, the delay in filing the appeal before the first appellate authority deserves to be condoned, and the matter may either be adjudicated on merits or restored to the file of the learned CIT(A) or Jurisdictional Assessing Officer for adjudication of the claim of deduction under section 80-IA in accordance with law after considering the Forms No.10CCB and other evidences furnished by the assessee. 17. Per contra, the learned Departmental Representative relied upon the orders of the CPC and the learned CIT(A).However, upon being confronted with the material placed on record regarding the technical difficulties allegedly faced by the assessee in uploading Forms No.10CCB, the subsequent filing of the audit reports through e-mails, the grievances lodged on the income-tax portal and the fact that the learned CIT(A) had dismissed the appeal

10 ITA No. 3370/Mum/2026 Sanjay Omprakash Nayar without adjudicating the issue on merits, the learned Departmental Representative fairly submitted that he would have no serious objection if the matter is restored to the file of the jurisdictional Assessing Officer for examination of the assessee's claim on merits. 18. We have heard the rival submissions and perused the material available on record. The first issue requiring adjudication is whether the delay of about 1,066 days in filing the appeal before the learned CIT(A) deserves to be condoned. 19. The relevant facts relating to the delay are not in dispute. The assessee's case is that Forms No.10CCB relating to three undertakings could not be uploaded on the income-tax portal due to technical difficulties and were thereafter furnished through e- mails, supported by grievance records and correspondence with the CPC. The assessee has consistently maintained that he was bona fide pursuing the matter with the Department under the belief that the issue would be resolved administratively and the deduction claimed under section 80-IA would be duly considered. 20. The learned CIT(A) declined to condone the delay by observing that the reasons furnished by the assessee were not convincing and by relying upon the decision of the Hon'ble Supreme Court in the case of Pathapati Subba Reddy (Died) by LRs. & Ors. vs. The Special Deputy Collector (LA). The learned CIT(A) has emphasized the settled proposition that the law of limitation is a substantive law, that delay cannot be condoned as

11 ITA No. 3370/Mum/2026 Sanjay Omprakash Nayar a matter of right and that sufficient cause must be established before judicial discretion can be exercised in favour of a litigant. 21. There can be no quarrel with the legal propositions relied upon by the learned CIT(A). The Hon'ble Supreme Court, in the decisions relied upon, has indeed reiterated that limitation provisions cannot be ignored on equitable considerations alone and that a litigant seeking condonation of delay must disclose sufficient cause. However, the question whether sufficient cause exists has necessarily to be examined on the peculiar facts and circumstances of each case. The ratio of the aforesaid decision cannot be applied mechanically without appreciating the nature of the dispute, the conduct of the litigant and the surrounding circumstances giving rise to the delay. 22. In the present case, the material placed before us prima facie indicates that the dispute arose on account of denial of deduction under section 80-IA allegedly resulting from non- availability of Forms No.10CCB on the income-tax portal. The assessee has produced evidence showing that grievances were lodged with the Department and that Forms No.10CCB were allegedly furnished through e-mails after the technical difficulties were encountered. Significantly, the claim of the assessee is not that the audit reports were prepared subsequently to overcome a statutory defect. Rather, the case of the assessee is that the audit reports were available and attempts were made to furnish the same, but the electronic filing process was hindered by technical issues. Whether such contention is ultimately correct or not is a

12 ITA No. 3370/Mum/2026 Sanjay Omprakash Nayar matter requiring factual verification. Nevertheless, the contemporaneous grievances, correspondence and supporting documents placed on record cannot be brushed aside as being wholly lacking in bona fides. 23. We further note that the learned CIT(A), after refusing to condone the delay, dismissed the appeal in limine without examining the issue on merits. Consequently, the substantive controversy relating to the assessee's entitlement to deduction under section 80-IA amounting to Rs.1,30,72,330/- has remained unexamined by any appellate authority. The record further reveals that the assessee has consistently asserted before all authorities that the audit reports in Form No.10CCB were available and had been furnished through alternate modes prescribed by the CPC Helpdesk. In these peculiar facts, refusal to condone the delay would result in foreclosure of the assessee's right to have the issue examined on merits, despite the existence of material requiring factual verification. 24. Having regard to the entirety of the facts and circumstances of the case, the nature of the dispute involved, the material placed on record evidencing continuous correspondence with the Department and the fact that the controversy ultimately requires factual verification, we are of the considered view that the assessee has demonstrated sufficient cause warranting condonation of the delay in filing the appeal before the learned CIT(A). Accordingly, the delay in filing the appeal before the

13 ITA No. 3370/Mum/2026 Sanjay Omprakash Nayar learned CIT(A) is condoned and the order of the learned CIT(A) dismissing the appeal on the ground of limitation is set aside. 25. Coming to the merits of the dispute, we find that the deduction under section 80-IA was restricted while processing the return under section 143(1) on the ground that the deduction claimed exceeded the amount reflected in Form No.10CCB available on the system. The assessee, on the other hand, claims that Forms No.10CCB in respect of the remaining three undertakings had already been furnished through e-mails and that several grievances had also been lodged with the Department highlighting the technical difficulties faced in uploading the said forms. The correctness of these factual assertions, the dates on which the audit reports were prepared and furnished, the genuineness of the technical glitches claimed by the assessee and the consequential eligibility of deduction under section 80-IA require detailed factual verification, which has not been carried out by the lower authorities. 26. During the course of hearing, the learned Departmental Representative fairly submitted that he would have no serious objection if the matter is restored for verification of the aforesaid factual aspects. 27. In view of the foregoing discussion, we deem it appropriate to restore the matter to the file of the Jurisdictional Assessing Officer for the limited purpose of verifying the assessee's claim that Forms No.10CCB relating to the three undertakings were

14 ITA No. 3370/Mum/2026 Sanjay Omprakash Nayar available, had been furnished through e-mails and grievances had been lodged owing to technical difficulties encountered on the income-tax portal. The Jurisdictional Assessing Officer shall examine the Forms No.10CCB, the dates of their preparation and furnishing, the grievance records, e-mail communications and all other relevant evidence that may be placed on record by the assessee. Thereafter, the Jurisdictional Assessing Officer shall adjudicate the assessee's claim for deduction under section 80-IA in accordance with law after affording adequate opportunity of being heard to the assessee. 28. We clarify that we have not expressed any opinion on the merits of the assessee's claim under section 80-IA and all issues are left open for examination by the Jurisdictional Assessing Officer. The assessee is directed to extend full cooperation and furnish all evidences as may be called for during the course of the set-aside proceedings. 29. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 29.06.2026.

Sd/- Sd/- (SAKTIJIT DEY) (MAKARAND VASANT MAHADEOKAR) VICE PRESIDENT ACCOUNTANT MEMBER Mumbai, Dated 29/06/2026 Dhananjay, Sr.PS आदेश की प्रतितिति अग्रेतिि/Copy of the Order forwarded to : 1. अपीलाथी / The Appellant

15 ITA No. 3370/Mum/2026 Sanjay Omprakash Nayar 2. प्रत्यथी / The Respondent. संबंधधत आयकर आयुक्त / The CIT(A) 3. आयकर आयुक्त(अपील) / Concerned CIT 4. धिभागीय प्रधतधनधध, आयकर अपीलीय अधधकरण, मुम्बई / DR, ITAT, Mumbai 5. गार्ड फाईल / Guard file. 6. आदेशानुसार/ BY ORDER, सत्याधपत प्रधत //True Copy// 1. उि/सहायक िंजीकार ( Asst. Registrar) आयकर अिीिीय अतिकरण, मुम्बई / ITAT, Mumbai