CAROL PETROLEUM PRIVATE LIMITED ,MUMBAI vs. ITO WARD 9(2)(1), MUMBAI

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ITA 911/MUM/2026Status: DisposedITAT Mumbai14 October 2026AY 2020-215 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that in the interest of justice, the appeal should be restored to the file of the CIT(A). The assessee had not been able to file a detailed petition for condonation of delay before the CIT(A). Therefore, the Tribunal granted the assessee an opportunity to file a petition for condonation of delay before the CIT(A), which would then be considered by the CIT(A) in accordance with law after providing adequate opportunity to the assessee. The Tribunal explicitly stated that the appeal was allowed for statistical purposes. The substantive claim regarding the benefit of Section 115BAA was not decided on merits by the ITAT, as the matter was remanded back to the CIT(A).

What were the facts?

The assessee, Carol Petroleum Private Limited, filed an appeal before the ITAT against the order of the Additional/Joint Commissioner of Income Tax (Appeals)-3, Hyderabad, dated 05.01.2026, for Assessment Year 2020-21. The assessee's appeal before the CIT(A) was dismissed in limine due to a delay of 305 days. The assessee had initially opted for the concessional tax regime under Section 115BAA in its original return filed within the due date. Form 10-IC was filed electronically, but due to a clerical error, AY 2021-22 was selected instead of AY 2020-21, which the income-tax portal did not allow to be corrected. A rectification application under Section 154 was rejected. The delay in filing the appeal before the CIT(A) arose from a misunderstanding by the then representative that rectification proceedings were the exhaustive remedy. The assessee engaged new counsel and filed the appeal before the CIT(A) on 06.12.2023, promptly upon realizing the correct legal position.

What were the issues?

1. Whether the Tribunal should restore the appeal to the file of the CIT(A) to consider the delay in filing the appeal after providing an adequate opportunity to the assessee to file a detailed petition for condonation of delay. Assessee's Contention: The assessee argued that the delay of 305 days in filing the appeal before the CIT(A) was due to a bona fide misappreciation by the then representative that rectification proceedings under Section 154 constituted the appropriate and exhaustive remedy. The assessee highlighted that the option under Section 115BAA was expressly exercised in the original return, Form 10-IC was filed with only an inadvertent AY error, and the assessee acted promptly upon discovering the correct legal position. They relied on judicial authorities that recognize that the substantive benefit under Section 115BAA should not be defeated by a procedural lapse where the assessee's intention is clear and substantial compliance is established. Revenue's Contention: The judgment records no specific argument from the revenue regarding the condonation of delay or the merits of the substantive claim.

Which sections of the Income-tax Act were involved?

Section 115BAA,Section 154

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI

Before: CHALLA NAGENDRA PRASAD & MR. G.M. DOSS

Pronounced: 14/10/2026

PER CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER: This appeal is filed by the assessee against the order of the Ld. Additional/Joint Commissioner of Income Tax (Appeals)- 3, Hyderabad dated 05.01.2026 for the assessment year 2020- 21.

2.

The Ld. Counsel for the assessee, at the outset, submitted that the appeal of the assessee was dismissed by the Ld. CIT(A) 1 without condoning the delay of 305 days. The appeal was dismissed in limine. The Ld. Counsel for the assessee submitted that a detailed petition for condonation of delay could not be filed before the Ld. CIT(A). However, in Form No. 35, the assessee had mentioned that there was a delay. Since the assessee had not filed a detailed petition for condonation of delay, the Ld. CIT(A) dismissed the appeal for non-filing of the condonation petition.

3.

The Ld. Counsel, before us narrated the background on which the assessee filed an appeal with a delay and requested that the matter may be restored to the file of the Ld. CIT(A) to consider the delay after providing adequate opportunity to the assessee. The following submissions were made:

“ISSUE INVOLVED The present appeal arises from the order of the learned CIT(A) dismissing the Appellant's appeal in limine by refusing to condone the delay of 305 days in filing the appeal against the order dated 05.01.2023 passed u/s 154. 2. FACTUAL BACKGROUND The Appellant had expressly opted for the concessional tax regime u/s 115BAA in its ITR-6 filed within the due date on 11.02.2021. Form 10- IC was subsequently actually filed and acknowledged electronically on 13.01.2022. However, due to an inadvertent clerical error, AY 2021-22 was selected instead of AY 2020-21. The income-tax portal did not permit revision/correction or re-filing of the Form.

The CPC consequently denied the benefit of section 115BAA. The Appellant's then Authorized Representative actively pursued the matter by filing a rectification application u/s 154, which was rejected on 05.01.2023. The delay in filing the subsequent CIT(A) appeal arose due to a bona fide misappreciation by the then representative that the rectification proceedings constituted the appropriate and exhaustive remedy. There was no conscious abandonment of the Appellant's claim. Upon the correct legal position coming to the management's notice in December 2023, the Appellant immediately engaged the present counsel and filed the appeal before the CIT(A) on 06.12.2023. Detailed submissions were thereafter filed on 19.02.2024. Thus, the Appellant acted promptly once the correct remedy came to its knowledge. 3. WHY THE DELAY DESERVES CONDONATION The delay is required to be considered in the context of the Appellant's continuous and bona fide conduct: Section 115BAA option was expressly exercised in the original return; Form 10-1C was actually filed, with only an inadvertent AY error: the Appellant pursued rectification proceedings u/s 154; the delay resulted from a genuine misunderstanding of the further appellate remedy by the then representative; and the Appellant acted immediately upon discovering the correct legal position. The case is therefore not one of deliberate inaction or abandonment of a statutory claim. 4. MERITS OF THE SUBSTANTIVE CLAIM The Appellant's substantive entitlement u/s 115BAA is supported by the fact that the option was clearly exercised in the original return and Form 10-IC was in fact filed. The only defect was the inadvertent AY selection, which could not be corrected because of the portal restriction.

The judicial authorities relied upon by the Appellant recognise that the substantive benefit under section 115BAA should not be defeated by a procedural lapse where the Assessee's intention is otherwise clear and substantial compliance is established.” 4. Heard both sides and perused the orders of the authorities below. We find that in the course of the proceedings before the Ld. CIT(A), the assessee could not file a detailed petition for condonation of delay. Therefore, in the interest of justice, we restore this appeal to the file of the Ld. CIT(A), giving the assessee opportunity to file a petition for condonation of delay, which shall be considered by the Ld. CIT(A). The Ld. CIT(A) shall decide the same in accordance with law after providing adequate opportunity to the assessee.

5.

In the result, the appeal of the assessee is allowed for statistical purposes.

Order pronounced in the open court on 14/10/2026

Sd/- Sd/- G.M. DOSS CHALLA NAGENDRA PRASAD ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai Dated: 14/10/2026 Prabhat Copy to: CAROL PETROLEUM PRIVATE LIMITED , 201, 202, KATYANI BUSINESS CENTRE 1 CHAKALA MIDC, MUMBAI-400093, MAHARASHTRA

ITO WARD 9(2)(1), 2 AAYAKAR BHAVAN, MK ROAD,, MUMBAI-400020, MAHARASHTRA

3 THE PCIT / CIT, 4 THE D.R., ITAT, MUMBAI BENCH 5 GUARD FILE

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