DCIT 5(3)(1), MUMBAI vs. M/S SERCO BPO PVT. LTD., MUMBAI

CO. 136/Mum/2022 M/s Serco BPO Pvt Ltd, Mumbai. Date of Hearing 22.02.2023 Date of Pronouncement 27.02.2023 आदेश / O R D E R

PER PAVAN KUMAR GADALE JM:

1.` Whether on facts and circumstances of the case, the Ld. CIT(A) is correct in holding the reopening as bad in law and allowing the appeal of the assessee by observing that mere information that the appellant received share premium cannot lead to the conclusion that income had escaped assessment as reasons recorded by the AO was flawed.

2. Whether on facts and circumstances of the case, Ld. CIT(A) is correct in allowing the assessees claim with regards to the addition made u/s 68 of the Act. The assessing officer has rightly added the sum of Rs. 32,21,26,938/- as an unexplained cash credit. In this regard, assessee has not brought on record any detail in order to prove the genuineness of this transaction. Hence, AO has appropriately considered this amount as unexplained cash credits in the hands of the assessee u/s 68 of the Act and added back to the total income of the assessee.

CO. 136/Mum/2022 M/s Serco BPO Pvt Ltd, Mumbai.

3. Whereas,the A.O. has received the information from investigation wing that the share premium of Rs. 32,21,48,67,940/- has been received by the assessee in the previous year and the same has been disclosed in the reserves and surplus in the Balance sheet. The AO has dealt on the facts, submissions and observed as under:

7. From the records, it is seen that during F.Y.2008-09 relevant to A.Y.2009-10 assessee has shown receipt of share premium amounting Nil. Whereas information has been received from investigation wing that share premium was Rs.32,21,48,67,940/-. It has been found the that although the assessee has been objecting that the said amount of share premium amount has been shown in the securities premium account in the reserves and surplus of the Balance Sheet filed during the year, the issue of share premium was never been discussed anywhere in the assessment order as well as on the order sheet nothing. Hence it is amply clear that the then A.O. had not applied his mind to this issue and the information received from the Investigation Wing does bear the importance as this issue of share premium is being discussed afresh after giving due opportunity to the assessee to explain its stand. The assessee has nowhere brought on record to prove the nature and the source of this share premium issued during the year. The reference CO. 136/Mum/2022 M/s Serco BPO Pvt Ltd, Mumbai. of the assessee to the jurisdictional High Court judgment in the case of M/s Vodafone India Ltd. which is regarding the issue of shares at premium in case of preference shares issued by the company. In our case the equity shares have been issued at a premium for which necessary justification as to the worth of the company, the rationality, the details of impending projects, the discounted cash flow (DCF) valuation of the shares and the present performance as per these projections has to be considered in totality so as to justify the claim of issue of shares at a premium in true sense. The assessee in its support never submitted any detail on record so as to prove the genuineness of this transaction. Hence it is appropriate to consider an amount of Rs. 32,21,48,679/- as unexplained cash credit in the hands of the assessee company u/s 68 of the Income Tax Act, 1961 and added back to the total income of the assessee. Finally the A.O has assessed the total income of Rs. 123.21.26.938/- and passed the order u/s 143(3) r.w.s 147 of the Act dated 23.03.2015. 4. Aggrieved by the order, the assessee has filed an appeal before the CIT(A), whereas the CIT(A) considered the grounds of appeal, submissions of the assessee, findings of the AO, judicial decisions and the information filed in the course of appellate proceedings and granted relief in respect of receipt of share premium by the assessee from the holding company and has observed at Para 5.4 to Para 6.4.3 CO. 136/Mum/2022 M/s Serco BPO Pvt Ltd, Mumbai. of the order and partly allowed the assessee appeal as under:

5.4 Decision on Ground No.2:

5.4.1 I have considered the contentions of the appellant. I find that in this case an assessment order was passed on28.01.2014 u/s 143(3) rws 144C(1) of the Act. The assessment was reopened on 23.03.2015, i.e., after expiry of more than 4 years from the end of the relevant assessment year.

5.4.2 I find that in the reasons recorded by the AO has stated that the appellant had shown the receipt of share premium during the FY 2008-09 as NIL. In the course of the appellate proceedings, the appellant denied that premium receipt of Rs. 32,21,48,679/- was not disclosed by the appellant in its return of income. The appellant also furnished a copy of the original return of income for AY. 2009-10. As par Schedule 2 of the Balance Sheet of the return, the share premium received was Rs. 32,21,48,679/-. In view of this the AO was requested, by a letter dated 05.12.2017, to furnish his comments in this regard. In response the AO filed a letter dated 6.12.2017. The AO fail to rebut claim of the appellant that the share premium received was disclosed by it. Therefore, in my view the very basis on which the assessment was reopened was wrong. Therefore, I find that the information received from the Investigation Wing was already disclosed by the appellant in its return of income.

5.4.3 Further, the mere information that the appellant received share premium cannot lead to the conclusion that CO. 136/Mum/2022 M/s Serco BPO Pvt Ltd, Mumbai. income had escaped assessment. On this count also, the reasons recorded is flawed.

5.4.4 In view of the foregoing discussions, I hold that the reopening was bad in law. Accordingly, ground of appeal No.2 raised by the appellant is allowed.

6. Ground Nos. 3 & 4:

6.1 In these grounds of appeal the appellant contended that the AO erred in making an addition of 32,21,48,679/- u/s. 68 of the Act to the book profit of the appellant u/s 115JB of the Act.

6.2 Facts relating to Grounds of Appeal No.3 & 4:

6.2.1 The AO made addition of 32,21,48,679/- u/s.68 of the Act as unexplained cash credit. The relevant portion of the assessment order is reproduced below:

7. From the records, it is seen that during F. Y. 2008-09 relevant to A.Y. 2009-10 assessee has shown receipt of share premium amounting to NIL whereas information has been received from the investigation wing that share premium was 232,21,48,67,940/-. It has been found that although the assessee has been objecting that the said amount of share premium has been shown in the securities premium account in the reserves and surplus of the Balance Sheet filed during the year, the issue of share premium was never been discussed anywhere in the assessment order as well as on the order sheet notings. Hence it is amply clear that the then AO has not applied his mind to this issue and the information received from the Investigation Wing does bear the important as this issue of share premium is being discussed afresh after giving due opportunity to the CO. 136/Mum/2022 M/s Serco BPO Pvt Ltd, Mumbai. assessee to explain its stand. The assessee has nowhere brough on record to prove the nature and the source of this share premium issued during the year. The reference of the assessee to jurisdictional High Court judgment in the case of M/s. Vodafone India Ltd. which is regarding the issue of shares at premium in case of preference shares issued by the company. In our case the equity shares have been issued at a premium for which necessary justification as to the worth of the company, the rationality, the details of impending projects, the discounted cash flow (DCF) valuation of the shares and the present performance as per these projections has to be considered in totality so as to justify the claim of issue of shares at a premium in true sense. The assessee in its support never submitted any detail on record so as to prove the genuineness of this transaction. Hence it is appropriate to consider an amount of 232,21,48,679/- as unexplained cash credit in the hands of the assessee company u/s.68 of the Income Tax Act, 1961 and added back to the total income of the assessee.

6.2.2 The computation of the book profit as per the order dated 23/03/2015 is reproduced as under:

Total Income u/s. 115JB (As per order u/s. 143(3) r.w.s. 144C(1) dated 28/01/2014 - 90,99,78,259 Add Disallowed u/s 68 (as discussed in para 7 above) 32,21,48,679 Total Income - 123,21,26,938 6.3 Submissions of the appellant in respect of ground number 3 & 4: Submissions of the appellant dated 28.03.2016 is reproduced below:

CO. 136/Mum/2022 M/s Serco BPO Pvt Ltd, Mumbai. "In the light of the aforesaid reasons, the impugned addition of Rs.32,21,48,679, by way of unexplained cash credit under section 68 of the Act, is absolutely erroneous and the same deserves to be deleted on this ground, itself.

V. Further, the AO could not re-compute the profits in profit and loss account by adding the impugned share premium of Rs.32,21,48,679, for the determination of book profit under section 115JB of the Act.

It may be further stated that the AO failed to correctly appreciate the implications of the provisions of section 115.JB of the Act.

In this connection, it may be stated that a company is required do prepare its profit and loss account in accordance with Part-II of Schedule VI of the Companies Act, 1956. Further, the AO does not have any jurisdiction to go behind the net profits shown in the profit and loss account, except to the extent as provided for in the Explanation I to section 115.JB(2) of the Act.

It may also be stated here that under the relevant clauses (a) to (j) of the aforesaid Explanation 1, the impugned share premium could not be added to the net profits for the purpose of computation of book profits.

The aforesaid stand is supported by the following judgements of the Supreme Court.

2. Malayala Manorama Co. Ltd. Vs CIT [2008] 300 ITR 251 (SC) It was held in this case that while computing the income of a company under section 115J, the AO has only power to examine, whether the books of account are certified by the authorities under the Companies Act. The Assessing Officer, thereafter, has the limited power of making increases and reductions as provided for in the Explanation to section 115J. The AO does not have the jurisdiction to go behind the net profit shown in the profit and loss account, except to the extent as provided for in the Explanation to section 115J of the Act.

It may also be stated here that the relevant provisions of section 115JB are totally in para materia with the relevant provisions of section 115J of the Act.

In the light of the aforesaid reasons also, addition of the impugned share premium of Rs. 32,21,48,679, made by the AO to the book profits for the computation of MAT under section 115JB of the Act, is totally erroneous and bad in law.

6.3.2 Further, during the course of appeal proceedings, the appellant filed by a letter dated 12/12/2016 following new evidences in support of the genuineness of the receipt of share premium of Rs. 32,21,48,679/-:

(a) Confirmation letter, dt. 10.8.2017, in respect of the receipt of the aforesaid share premium.

(b) Copy of relevant extract of bank account of M/S SKR BPO Services Pvt. Ltd. with HSBC Bank, CO. 136/Mum/2022 M/s Serco BPO Pvt Ltd, Mumbai. (c) A copy of return of allotment regarding the aforesaid share, before the Ministry of Corporate Affairs, which was filed by M/s Intelenet Global Services Pvt. Ltd. on 30.1.2009. (d) Copy of Financials in the case of M/s SKR BPO Services Pvt. Ltd. for the FY 2008-09, relevant to AY 2009-10. (e) a copy of the extract of bank account of M/s Intelenet Global Services Pvt. Ltd. with HSBC Bank in respect of receipt of Rs.39,99,99,979, from M/S SKR BPO Services Pvt. Ltd. was attached therewith.

The appellant claimed that in the aforesaid extract of bank account, the deposit of the aforesaid amount of Rs.39,99,99,979, in the bank account of M/s Intelenet Global Services Pvt. Ltd. with HSBC Bank is clearly disclosed and that the aforesaid documents clearly establish the genuineness of the receipt of the aforesaid amount of share premium of Rs.32,21,48,679, by the appellant from M/S SKR BPO Services Pvt. Ltd. 6.3.3 The said new evidences were sent to the AO vide this office letter dated 01/09/2017 and was asked to furnish the comments. The AO by his letter dated 24/10/2017 has furnished his comments on the new evidences submitted by the appellant. The comments of the AO are reproduced as under:

"Vide the above referred letter dated 01.09.2017, your goodself had requested to furnish the comments on the evidences in support of the genuineness of the transaction and also to furnish comments on the assessee company's claim that adequate opportunity was not given CO. 136/Mum/2022 M/s Serco BPO Pvt Ltd, Mumbai. to the assessee company in the course of assessment proceedings to furnish the evidences.

2. As regards furnishing of comments regarding not providing adequate opportunity, it is submitted that vide this office letter dated 09.09.2017 issued under F.No. ACIT-12(2)(2)/Remand Report/2017-18, full comments on the same as observed from the assessment records have been reported therein and the same have not been repeated here to avoid repetition. The same may be referred to. In this regard, it is once again reiterated that as stated in the said letter, adequate opportunity and sufficient time was provided to the assessee company in the course of assessment proceedings to provide the requisite details, however to the reasons best known to the assessee company, it had refrained from furnishing the details. Further, it may be stated that the assessee company has not mentioned at any point of time during the course of assessment proceedings as to what prevented it from furnishing the requisite details. In the circumstances, it may be stated that the additional evidences now being produced before your goodself were available to the assessee company at the time of course of assessment proceedings and the same have not been furnished to the then Assessing Officer to the reasons best known to it. As such, the assessee company's claim that adequate opportunity was not provided to it in the course of assessment proceedings is incorrect and, in my considered opinion, the evidences submitted during the appellate proceedings before your goodself is in appropriate without furnishing the same during the assessment proceedings.

5. Further, from the HSBC bank account of SKR BPO Services, it is observed that an amount of Rs. 89,32,830/- were available as on 11.12.2008 and after receiving fresh deposit of Rs.40,98,63,001/- on 30.12.2008, SKR BPO Services could make payment of Rs.39,99,99,979/- to Intelenet on the very same date i.e.. 30.12.2008. This very fact proves that SKR BPO Services does not have enough credit worthiness to subscribe to the shares of Intelenet at such a premium in which SKR BPO Services had controlling rights. Furthermore, the absence of correspondence between these two companies as SKR BPO Services is already an investor in Intelenet does not appear logical in view of the fact that both SKR BPO Services and Intelenet are separate legal entities in the eyes of law though the Directors are same and SKR BPO Services held 100% shareholding in Intelenet. Any corporate transaction must be in a proper procedural law by making suitable correspondence. It is not explained by the asssesee company as to why Intelenet had not explored contacting other companies to make out better CO. 136/Mum/2022 M/s Serco BPO Pvt Ltd, Mumbai. out of such shares other than SKR BPO Services and no other correspondence in this regard have been furnished by the assessee company, which shows that reasons underlying the share transfer at a premium to SKR BPO Services is other than the one which is shown to appear on the paper.

6. As per the submissions made by the assessee company, services of no investment banker have been availed by both SKR BPO Services and Intelenet. It is surprising to see how a company without knowing the future potential of Intelenet would subscribe for shares at a premium by paying such huge amount and also how the Intelenet had not availed services of any investment banker to explore better investor other than SKR BPO Services. It is not understood how Intelenet would simply issue shares to SKR BPO Services without making any other enquiries regarding other investors for allotment of such shares at better valuations.

CO. 136/Mum/2022 M/s Serco BPO Pvt Ltd, Mumbai. 6.3.4 By this office letter dated 06/11/2017, the appellant was asked to file its comments on the remand report submitted by the AO. The appellant vide letter dated 20/11/2017 has filed its comments on the remand report submitted by the AO, which is reproduced hereunder:

"Regarding reassessment proceedings 1) Thereafter, a notice was issued under section 148 of the Act, dt.27.3.2014. ii) Later on, a notice under section 143(2) was issued. However, vide the aforesaid notice only reasons recorded for reopening the assessment dt.27.3.2014 were supplied to the appellant.

Further, in this connection, it is significant to state that the AO, vide the aforesaid notice under section 143(2) of the Act, did not call for any details for the purpose of reassessment. It is, therefore, quite clear that though the AO raised the issue of tax-treatment of the impugned share premium, yet no query, whatsoever, was raised in regard to the genuineness of the aforesaid share premium iii) Thereafter, detailed objections were filed against the aforesaid notice under section 148, vide appellant's letter, dt. 26.7.2014. Besides, vide another letter dt. 16.1.2015, additional objections were filed against the notice under section 148 of the Act. iv) Thereafter, the AO passed an order under section 147, r.w.s. 148 of the Act, dr.6.2.2015, rejecting the aforesaid objections of the appellant.

CO. 136/Mum/2022 M/s Serco BPO Pvt Ltd, Mumbai. v) Further, the appellant furnished comments on the aforesaid order under section 147 of the Act, vide letter, dt. 12.3.2015. Vide the aforesaid detailed letter a request was made to drop the reassessment proceedings. vi) Thereafter, the AO passed an order under section 143(3), r.w.s. 147 of the Act. dt.23.3.2015, which is under appeal.

From the aforesaid reassessment proceedings, it may be clearly seen that the AO nowhere raised any query regarding the genuineness of the transaction relating to the receipt of the aforesaid share premium to the extent of Rs. 32,21,48,679. In the light of the aforesaid reasons, the comments of the AO in the Remand Report that the appellant did not furnish the relevant pieces of evidence, regarding the genuineness of the transaction of the receipt of the aforesaid share premium, are totally erroneous.

7. In the light of the aforesaid reasons, it is requested that the aforesaid evidence establishing the genuineness of the receipt of share premium of Rs.32,21,.48,679/-, by the appellant, from M/s SKR BPO Services Pvt. Ltd., may be accepted."

6.4 Decision on Ground Nos. 3 & 4:

6.4.1 In the course of the appellate proceedings the appellant filed additional evidence and the AO was requested to comment on the appellants contention that the appellant was not given adequate opportunity to produce the additional evidence. In reply the AO has CO. 136/Mum/2022 M/s Serco BPO Pvt Ltd, Mumbai. merely stated that adequate opportunity and sufficient time were provided to the appellant to provide the requisite details. The AO in his report dated 09.09.2017. furnished the details of opportunities given to the appellant in the course of assessment proceedings. The report of the AO dated 09.09.2017 is reproduced below:

"In this regard, it is to state that the then AO has enquired the specific input in the instant case which was received form DGIT(Inv.), Mumbai subsequently, the reason was recorded and assessment was reopened u/s 147 of the Act. Accordingly a notice u/s 148 of the Act dated 27.03.2014 was served to the assessee company. In response to the said notice, a request was made by the assessee company vide letter dated 02.04.2014 to supply a copy of the reason recorded u/s 148(2) of the Act. The request of the assessee company was acceded and reason recorded for initiating proceedings u/s 148 of the Act was provided to the assessee company wherein it was clearly reflected the issue on which case was reopened/s 147 of the Act.

Thereafter, notices u/s 143(2) of the Act dated 27.04.2017 and 30.07.2017 were issued to the assessee company which was duly served to the Assessee Company. In response, neither the assessee attended nor filed any submission. Subsequently, notices u/s 142(1) of the dated 30.07.2014, 09.10.214 and 11.12.2014 was issued and which was duly served upon the assessee company. It is pertinent to highlight over here that notice dated 11.12.2014 u/s 142(1) of the Act therein clearly mentioned that no adjournment will be granted. Despite it is gathered from the record that neither assessee company attended on the specific date i.e 30.12.2014 nor filed any submission in support of his claim."

CO. 136/Mum/2022 M/s Serco BPO Pvt Ltd, Mumbai. 6.4.2 I find from the report of the AO that adequate opportunities were provided to the appellant in the course of the assessment proceedings to furnish the evidences which have been filed before me. I, therefore, decline to admit the additional evidence. Accordingly, I proceed to decide the ground No. 4 without considering the new evidences filed. 6.4.3 I have considered the submissions of the appellant. I find that the AO has held the sum of Rs. 32,21,48679/- as unexplained cash credit. Thereafter the AO added the sum of Rs.32,21,48,679/- to the book profit of the appellant determined u/s 115JB in the assessment order dated 28.01.2014. This action of the appellant is grossly wrong. As per the Act, for determination of book profit u/s 115JB, no adjustments can be made other than those specified in explanation 1 to section 115JB. Therefore the action of the AO in adding the sum of Rs. 32,21,26,938/- is without any basis. I therefore, delete the addition made to the book profit. Since adjustment in respect of addition made u/s 68 in the computation of book profit for the purpose of section 115JB is not sustainable, there is no need to go into the merits of the findings of the AO that the sum of Rs. 32,21,48,679/- represents unexplained cash credit. Accordingly ground no 3 & 4 are allowed. Aggrieved by the order of the CIT(A), the revenue has filed an appeal and the assessee has filed cross objection with the Honble Tribunal.

“ Sub: Condonation of delay for filing departmental Appeal in the case of M/s Serco BPO Pvt Ltd. Formerly known as intelnet Global Service Pvt Ltd (PAN – AABCV25) (erstwhile PAN – AAACI7387P) for A.Y 2009- 10, – reg. Kindly refer to the above, 2. In this connection, it is stated that the delay in filing appeal is attributed to the following cases S.No Jurisdiction Transfer From To date 1 Old Old-Addl/JCIT 19.06.2002 Rg. 1(2) 2 Old-Addl/JCIT Ward1(2)(1), 04.01.2006 Rg. 1(2) Mumbai 3 Ward1(2)(1), Circle 1(2)(1), 26.02.2008 CO. 136/Mum/2022 M/s Serco BPO Pvt Ltd, Mumbai. Mumbai Mumbai 4 Circle 1(2)(1), Circle 13(2)(1) 08.03.2016 Mumbai Mumbai 5 Circle 13(2)(1) Circle 12(2)(2) 17.09.2016 Mumbai Mumbai 6 Circle 12(2)(2) Circle 4(2)(1) 23.09.2020 Mumbai Mumbai 7 Circle 4(2)(1) Circle 5(3)(1) 06.12.2021 Mumbai Mumbai 3. A perusal of records at all levels (AO's office, Range office and Olo PCIT-5. Mumbai), revealed that this office was not in receipt of the CIT(A) order. Further the PAN history of the case was extracted from ITBA (copy of the printout enclosed). Pursuant to restructuring, PCIT-13, Mumbai was merged with PCIT-5 in August 2020. Thereafter, the case was transferred on 23.09.2020 from Circle 12(2)(2). Mumbai to Circle 4(2)(1). Mumbai and again the PAN was transferred on 06.12.2021 from Circle 4(2)(1), Mumbai to Circle 5(3)(1). Mumbai. As can be inferred from the history of movement of PAN, the jurisdiction over the case under PCIT-5, Mumbai commenced only from 06.12.2021. Intermittently, it could not be ascertained as to where, when and in which office (ie, Commissionerate) the CIT(A) order was served.

4. To further clarify the delay in filing of appeal to ITAT, the chronology of events in the case is as follows:

1. Chronology of events in the instant case is as follows Sr. Date Status of Remarks N. order/Appeals 1 28.01.2014 Order u/s 143(3) r.w.s 144C(1) 2 23.03.2015 Order u/s 143(1) Addition u/s 68 r.w.s 147 passed made to book CO. 136/Mum/2022 M/s Serco BPO Pvt Ltd, Mumbai. by the AO profit u/s 115JB of the Act 3 16.09.2017 Order u/s 154 Rectification rectfying the order made on two u/s 147 of the Act issues. dated 23.03.2015 1. unexplained passed cash credit added in computation to book profit instead of addition as per normal provisions of the Act 2. Set off of unabsorbed deprecation wrongly allowed by the AO 4 29.12.2017 Ld. CIT(A) quashed Dept filed an the order u/s appeal in ITAT on 143(3) r.w.s 147 of 16.09.2022 the Act dated 23.03.2015 5 07.06.2018 Ld. CIT(A) partly Assessee filed allowed the further appeal in assessee appeal ITAT against the order u/s 154 of the Act dated 16.09.2017 6 24.05.2021 ITAT passed an ITAT held that the order on appeal order passed by against CIT(A) CIT(A) dated against the order 29.12.2017 u/s 154 dated quashing the 16.09.2017 order u/s 147 is reversed on an appeal by the revenue then addition made CO. 136/Mum/2022 M/s Serco BPO Pvt Ltd, Mumbai. order u/s 154 shall stands restored. 7 16.09.2022 Appeal filed in Appeal filed after ITAT against the delay of 4 years order of CIT(A) 6 months and six dated 29.12.2017 days 5. In view of the above, the entire delay in filing of appeal to Hon’ble ITAT submitted as above and it is further requested to your goodself that condonation of delay may be granted for the same. 6. The Ld.DR mentioned that the afore said reasons mentioned in the letter are bonofide and the delay was due to change of jurisdiction, due to change of name of the assessee company and also the delay is attributable to Covid period and prayed for condonation of delay in filling the appeal. Contra, the Ld.AR strongly objected the submissions with facts , information and judicial decisions and pleaded to reject the condonation application filed for the delay in filling the appeal.

7. We heard the rival submissions and perused the material on record. The Ld.DR s contentions are that the delay of 1651 days in filling the appeal with the Honble Tribunal is attributable to change in PAN, jurisdiction of the case and transfer from old CO. 136/Mum/2022 M/s Serco BPO Pvt Ltd, Mumbai. jurisdiction to new, movement of file pursuant to restructuring of PCIT and inferences drawn due to Covid period and the delay is reasonable and sufficient cause is explained and hence has to be condoned. We find that the CIT(A) has passed the order dated 29.12.2017 and the revenue has filed a letter explaining the chronology of jurisdiction of the case prior to date of passing of the CIT(A) order on 29-12-2017, which does not serve any purpose in the present case. The Revenue has to explain the delay after expiry of time limit of 60 days from the receipt of order of the CIT(A). We find as per Form No.36 along with the grounds of appeal raised by the revenue at page 2 against the column c –“Date of service or communication of the order – “It was mentioned as 19.01.2018”. The revenue having accepted the date of service of the CIT(A) order has challenged by appeal before the Honble Tribunal and therefore the explanations and reasons for delay should be subsequent to this date and to any prior period.

8. Further the Ld.DR submitted that due to covid period limitations, the delay in filling the appeal was CO. 136/Mum/2022 M/s Serco BPO Pvt Ltd, Mumbai. further extended. Whereas the Ld. AR brought to the knowledge of the bench, crucial dates and extensions on limitation time in the Covid period. It was submitted that covid restrictions are effective from March 2020 and was extended from time to time by the Hon’ble Supreme Court till february 2022 and substantiated the submissions with the judicial decisions. Further the delay in filling the appeal has arised after expiry of 60 days from the receipt of order on 9-01-2018, which was much before the limitation during the covid period effective from march 2020. we considering the fact that the period of delay of covid cannot be considered as a sufficient cause as the delay in filling the appeal happened much prior to covid period and the Ld. DR has to explain the delay after receipt of the CIT(A) order and the date of filing the appeal. Therefore the submissions of the revenue that the covid period is also attributable to delay in filling does not have merits. The Submissions of the Ld.DR are not convincing and not supported with the credible information and sufficient reasons explaining the delay expect relaying on the secondary factors mentioning the dates of jurisdiction changes, CO. 136/Mum/2022 M/s Serco BPO Pvt Ltd, Mumbai. restructuring and transfer of the case by the revenue. We find the delay in filling the appeal is abnormal and the revenue could not explain the delay with sufficient cause or bonofide reasons for condoning the delay. We support our view relying on the judicial decisions of Honble Supreme court , Honble High court and Honble tribunal on the disputed issues of delay in filling the appeal. The Honble Supreme Court in the case of Office of the Chief Post Master General Vs. Living Media India Ltd (348 ITR 7)(SC) has observed as under Head notes:

Section 261 of the Income-tax Act, 1961 Supreme Court Appeals to Whether, where appellant, a Government department, filed appeal with a delay of 427 days and there was no proper explanation offered by Department for delay except mentioning of various dates, it was to be concluded that Department had miserably failed to give any acceptable and cogent reasons sufficient to condone such a huge delay and, therefore, appeal filed by it was to be dismissed being barred by limitation - Held, yes [In favour of assessee. At Para 13. In our view, it is the right time to inform all the government bodies, their agencies and instrumentalities that unless they have reasonable and acceptable explanation for the delay and there was bonafide effort, there is no need to accept the usual explanation that the file was kept pending for several CO. 136/Mum/2022 M/s Serco BPO Pvt Ltd, Mumbai. months/years due to considerable degree of procedural red-tape in the process. The government departments are under a special obligation to ensure that they perform their duties with diligence and commitment. Condonation of delay is an exception and should not be used as an anticipated benefit for government departments. The law shelters everyone under the same light and should not be swirled for the benefit of a few. Considering the fact that there was no proper explanation offered by the Department for the delay except mentioning of various dates, according to us, the Department has miserably failed to give any acceptable and cogent reasons sufficient to condone such a huge delay. Accordingly, the appeals are liable to be dismissed on the ground of delay.

CO. 136/Mum/2022 M/s Serco BPO Pvt Ltd, Mumbai. 253(5), Tribunal may admit an appeal after expiry of relevant period referred to in s. 253(3) if it is satisfied that there was sufficient cause for not presenting the appeal within that period. No doubt, it is specifically provided that appeal can be admitted after the prescribed period if the assessee satisfies the Tribunal that he/she had sufficient cause for not preferring the appeal within period as prescribed in this behalf. Where the time for referring an appeal has expired, a valuable right is secured to the respondent or the opposite party and such right ought not to be lightly disturbed [as held by Hon'ble Supreme Court in the case of Ramlal vs. Rewa Coalfields Ltd. AIR 1962 SC 361, 363]. The appeal preferred or. made after the expiry of the prescribed period can be admitted only if the assessee satisfied the Tribunal that there was sufficient cause for not preferring the appeal within such period. The Tribunal has power to condone the delay only when sufficient cause is shown with a view to advance substantial justice and even after sufficient cause has been shown the party is not entitled to condonation of delay, as a matter of right. If sufficient cause is shown then Tribunal has to enquire, whether in its discretion, it should condone the delay, consideration of bona fides or due diligence is always material. Since all other circumstances are also to be taken into account before applying the provisions of law in this regard and in this case the Department did not file the appeals within due time in this case and cause shown by it does not conclusively show that same is reasonable or sufficient. No doubt, at more than one occasion Hon'ble Supreme Court has specifically held that State cannot be put on the same footing as an individual because individual would be quick in taking the decision whereas Government machinery, there is impersonal mechanism through its & CO. 136/Mum/2022 M/s Serco BPO Pvt Ltd, Mumbai. officers or servants but position here is not the same as it was a case of no action on the part of the Assessing Officer inasmuch as even after obtaining authorization from concerned CIT on 30.08.2010, the appeal was filed on 29.03.2012 and no material or evidence to justify such inordinate delay of 557 days has been adduced except taking general type of plea of oversight and pressure of overwork, Department has sought condonation of delay, which, in our considered view, cannot be held to be a sufficient or reasonable cause for not filing the appeal within stipulated time in the light of facts and circumstances explained and discussed above.

7. As such, considering the totality of facts and circumstances, pleas raised and discussion held in the light of decided cases, as relied upon, we decline to condone the delay caused in filing of the appeal and dismiss the same in limine.

8.As a result, the appeal filed by the Revenue gets dismissed.

For all the above reasons, the application for condonation of delay stands chsmissed and consequently the appeal stands rejected.

11. Further Jurisdictional Honble High Court Of Bombay in the case of CIT(Exemptions)Pune Vs. Lata Mangeshkar Medical Foundation in Income Tax CO. 136/Mum/2022 M/s Serco BPO Pvt Ltd, Mumbai. Appeal (Lodg) No. 2320 of 2017 has observed as under:

14. In the above view, both the Notices of Motion are dismissed. No order as to costs.

CO. 136/Mum/2022 M/s Serco BPO Pvt Ltd, Mumbai. 12.. We Considering the facts, circumstances, ratio of the judicial decisions and discussions in the above paragraphs are not convinced with the explanations of the revenue in respect of inordinate delay in filling the appeal and accordingly dismiss the revenue appeal on limitation.

CO. No. 136/Mum/2022

13. The appeal filed by the revenue is dismissed as discussed in the above paragraphs and consequently, the assessee’s cross objections becomes infructuous and are dismissed.