HYDROAIR TECTONICS PCD LIMITED,MUMBAI vs. DY. CIT CENTRAL CIRCLE 2(1), MUMBAI, MUMBAI
IN THE INCOME-TAX APPELLATE TRIBUNAL“E” BENCH,
MUMBAI
BEFORE SHRI SAKTIJIT DEY, VICE PRESIDENT
&
SHRI PRABHASH SHANKAR, ACCOUNTANT MEMBER
Hydroair Tectonics PCD
Limited,
501,
Concord
Premises Co-op Society Ltd.,
Plot No. 66A, Sector 11, CBD
Belapur
–400
614,
Maharashtra v/s.
बनाम
Dy. Commissioner of Income
Tax, Central Circle – 2(1),
Room No. 804, Pratishtha
Bhavan,
Maharishi
Karve
Road,
Mumbai
–400
020,
Maharashtra
स्थायी लेखा सं./जीआइआर सं./PAN/GIR No: AAACH9686C
Appellant/अपीलार्थी
..
Respondent/प्रतिवादी
Appellant by :
Shri Subhash Kumar Kedia, AR
Respondent by :
Shri Hemanshu Joshi, (Sr. DR)
Date of Hearing
15.07.2025
Date of Pronouncement
21.07.2025
आदेश / O R D E R
PER PRABHASH SHANKAR [A.M.] :-
The present appeal is preferred by the assessee against the order dated 11.02.2025 passed by the Learned Commissioner of Income-tax,
Appeal, CIT(A)-47, Mumbai [hereinafter referred to as “CIT(A)”]
pertaining to penalty order u/s. 270A of the Income-tax Act, 1961
[hereinafter referred to as “Act”] dated 22.03.2022 as passed by the DCIT, CC-2(1), Mumbai for the Assessment Year [A.Y.] 2018-19. P a g e | 2
A.Y. 2018-19
Hydroair Tectonics PCD Limited
The grounds of appeal are as under:- 1. On the facts and circumstances of the case and the law on the subject, the Ld. Assessing Officer has passed the Assessment Order u/s 144 of the Income Tax Act, and subsequently, the penalty order u/s 270A of the Act was passed, without giving adequate opportunity to the appellant and without considering the Covid-19 situation, the restriction imposed by the Government and the age of both the directors of the company who are senior citizen, the order passed is bad in law and the penalty proceedings so running need to be scraped, cancelled and to be treated as null and void. 2. On the facts and circumstances of the case and the law on the subject, the Ld. CIT(A), wrongly and erroneously not considered the genuinity of the reason in delay in filing of appeal and has without giving any opportunity of being heard on the particular subject of delay in filing of appeal, the appellate order has been passed without considering the merit of the case and the appeal has been dismissed on the grounds of delay in filing of the appeal without appreciating the reason for delay and also without giving any opportunity to the appellant of being heard. 3. On the facts and circumstances of the case, that the Ld. Assessing order be instructed to delete the penalty as the original assessment itself have been made on the basis of wrongful disallowance of “Bad debts written off Rs.185,00,786, adhoc disallowance @20% of “other expenses and miscellaneous expenses”– R.s 12,23,600 and “disallowance under section 40(a)(ia)” Rs.934,390. 4. That the penalty order passed in connection with such assessment order u/s 270A also need to be cancelled and scraped ab-initio or at least be kept in abeyance till the disposal. 5. That the Appellant reserves the right to add, alter, modify or amend any of the ground of appeal during the appellate proceedings, before the appellate authority. 3. Brief facts of the case are that in this case, assessment order was passed ex parte u/s 144 of the Act on account of non-compliance by the assessee to various notices issued during assessment proceedings, determining total income of Rs 2.36 cr as against the returned income of P a g e | 3 A.Y. 2018-19
Hydroair Tectonics PCD Limited
Rs 30.26 lakh. The AO also initiated penalty proceedings u/s 270A of the Act for underreporting of income. Later, penalty was imposed as the assessee did not make any compliance. In the subsequent appeal, the ld.CIT(A) dismissed the appeal on account of delay of 597 days although it was submitted by the assessee that it did not receive the notices issued by the department. He did not consider merits of the case.
4. Before us, the ld.AR has pleaded for condonation of the delay and restoring the penalty proceedings to the ld.CIT(A).It is also intimated that the quantum appeal has been already restored to him after condonation of delay by the hon’ble ITAT vide order in ITA
No.1853/Mum/2025 dated 02.07.2025. 5. In respect of the delay, it is submitted by way of an affidavit by one of the directors Shri Harbhajan Singh, aged 80 years that he along with his wife Raj Kumari Singh, aged about 81 years are both directors of the assessee company since its inception. There is no other director or Key Managerial person except both of them. They directly look after the affairs of the company and are supported by a few staff members to take care of company affairs. It is submitted further that both of them being very old and not having good health were not attending the office very often and are dependent on support staffs. Since from the inception of P a g e | 4
A.Y. 2018-19
Hydroair Tectonics PCD Limited the company the staff members took care of all inward and outward communications including emails messages on consultation with them and they are not directly involved in going through the email messages received by the company and one of the staff members look after that. It is further submitted that due to outbreak of COVID-19 during 2020-21
and 2021-22 they were advised to confine themselves to house and were not attending office during this period. The notice of hearing received on company email was not forwarded to any of them and was not brought to their notice by staff due to not attending office regularly. As such, the notice was not received by them and no action was taken against such notices. It is further submitted that they were not aware about the scrutiny proceedings and its outcome and were not having even the assessment order thereof. So could not decide and file any appeal against such order in due time. During November 2023 only while navigating the Income Tax portal, the Tax Consultant noticed about the scrutiny proceedings and the assessment order and then within a few days they filed an appeal with CIT(A). The delay in filing of appeal was unintentional and beyond their control and he took immediate steps to file an appeal as soon as he came to know about the assessment order. It is requested to condone the delay in filing of appeal It is also assured that such delays will not occur in the future.
P a g e | 5
A.Y. 2018-19
Hydroair Tectonics PCD Limited
On careful consideration of the submissions of the assessee, we are of the considered opinion that the delay in filing of the present appeal was not intentional but due to certain miscommunication only. Such a bonafide mistake needs to be condoned. In this connection reliance could be placed on the landmark decision of hon’ble Supreme Court which inter alia held in Collector, Land Acquisition v Mst. Katiji And Others- 167 ITR 471 (SC) that “ordinarily, a litigant does not stand to benefit by lodging an appeal late……..Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated….Any appeal or any application, other than an application under any of the provisions of Order XXI of the Code of Civil Procedure, 1908, may be admitted after the prescribed period if the appellant or the applicant satisfies the court that he had sufficient cause for not preferring the appeal or making the application within such period…. A litigant does not stand to benefit by resorting to delay. In fact, he runs serious risk.” We therefore, condone the delay. 7. We have also gone through the appeal order passed in the quantum appeal as per dated 02.07.2025(supra). We find that the matter is restored to the P a g e | 6 A.Y. 2018-19
Hydroair Tectonics PCD Limited ld.CIT(A) for fresh adjudication. Accordingly, we deem it to fit to restore the penalty order as well to the file of the ld.CIT(A) for de novo consideration in accordance with law after providing opportunity of heard to the assessee.
8. In the result, the appeal is allowed for statistical purposes.
Order pronounced in the open court on 21.07.2025. SAKTIJIT DEY
PRABHASH SHANKAR
(उपाध्यक्ष/ VICE PRESIDENT)
(लेखाकार सदस्य/ACCOUNTANT MEMBER)
Place: म ुंबई/Mumbai
ददनाुंक /Date 21.07.2025
Lubhna Shaikh / Steno
आदेश की प्रतितलति अग्रेतिि/Copy of the Order forwarded to :
अपीलार्थी / The Appellant 2. प्रत्यर्थी / The Respondent. 3. आयकर आयुक्त / CIT 4. विभागीय प्रविविवि, आयकर अपीलीय अविकरण DR, ITAT, Mumbai 5. गार्ड फाईल / Guard file. सत्यावपि प्रवि //// आदेशानुसार/ BY ORDER,
उि/सहायक िंजीकार (Dy./Asstt.