VASUPUJYA ENTERPRISES PVT. LTD.,KOLKATA vs. D.C.I.T.,CIRCLE-1(2), KOLKATA

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘D’ BENCH, KOLKATA [Virtual Court Hearing] (Before Shri P.M. Jagtap, Hon’ble Vice President, Kz & Shri Satbeer Singh Godara, Hon’ble Judicial Member) ITA No. 2503/Kol/2019 Assessment Years: 2012-13 Vasupujya Enterprises Pvt. Ltd……...…...........................................................……………….…......Appellant 35, C.R. Avenue Kolkata – 700 012 [PAN : AAACV 8958 M] Vs. Deputy Commissioner of Income Tax, Circle-1(2) Kolkata……….....................……........Respondent Appearances by: Shri Ravi Tulsiyan, F.C.A., appeared on behalf of the assessee. Shri Imokaba Jamir, CIT D/R, appearing on behalf of the Revenue. Date of concluding the hearing : June 10th, 2020 Date of pronouncing the order : June 10th, 2020 ORDER Per P.M. Jagtap, VP, Kz:-

This appeal filed by the assessee is directed against the order of the Learned Commissioner of Income Tax (Appeals) – 17, Kolkata, (hereinafter the “ld.CIT(A)”), dt. 16/01/2019, passed ex-parte, whereby he dismissed the appeal of the assessee. 2. The assessee in the present case is an investment company which filed its return of income for the year under consideration on 20/09/2012 declaring total income at Nil and claiming carry forward loss of Rs.85,93,269/-. In the said return, dividend income of Rs.40,49,933/- received during the year under consideration was claimed to be exempt by the assessee company. No disallowance on account of expenses incurred in relation to the said exempt income, however, was offered to tax by the assessee as required under the provisions of Section 14A of the Income Tax Act, 1961 (‘Act’). The Assessing Officer, therefore, invoked Rule 8D of the Income Tax Rules, 1962 (‘Rules’) and worked out the expenses incurred in relation to the earning of exempt income at Rs.1,41,36,211/-. He, however, restricted the disallowance u/s 14A of the Act to the extent of business expenses/loss claimed by the assessee to the extent of Rs.86,48,075/-. During the year under consideration, the assessee company had raised share capital of Rs.4,78,000/- with a share premium of Rs.4,73,22,000/-. In order to verify the same, summons u/s 131 of the Act were issued by the Assessing Officer to the share subscriber companies. The same, however, remained uncomplied

2 ITA No. 2503/Kol/2019 Assessment Years: 2012-13 Vasupujya Enterprises Pvt. Ltd Vasupujya Enterprises Pvt. Ltd. with. The assessee company also failed to produce the directors of the share with. The assessee company also failed to produce the directors of the share with. The assessee company also failed to produce the directors of the share subscriber companies for examination/verification before the Assessing Officer examination/verification before the Assessing Officer inspite of specific opportunity afforded in this regard. From the details and inspite of specific opportunity afforded in this regard. From the details and inspite of specific opportunity afforded in this regard. From the details and documents furnished by the assessee, the Assessing Officer found that the share documents furnished by the assessee, the Assessing Officer found that the share documents furnished by the assessee, the Assessing Officer found that the share subscriber companies were having no net wor subscriber companies were having no net worth and they were not carrying on any th and they were not carrying on any business activity. Keeping in view all these adverse findings recorded by him, the business activity. Keeping in view all these adverse findings recorded by him, the business activity. Keeping in view all these adverse findings recorded by him, the Assessing Officer treated the entire share capital and share premium amount Assessing Officer treated the entire share capital and share premium amount Assessing Officer treated the entire share capital and share premium amount aggregating to Rs.4,78,00,000/ aggregating to Rs.4,78,00,000/- claimed to be received by the assessee during the e assessee during the year under consideration as unexplained cash credits and addition to that extent was year under consideration as unexplained cash credits and addition to that extent was year under consideration as unexplained cash credits and addition to that extent was made by him u/s 68 in the assessment completed u/s 143(3) of the Act vide order dt. made by him u/s 68 in the assessment completed u/s 143(3) of the Act vide order dt. made by him u/s 68 in the assessment completed u/s 143(3) of the Act vide order dt. 30/03/2015. 3. Against the order passed by the Assessing Officer Against the order passed by the Assessing Officer u/s 143(3), the assessee u/s 143(3), the assessee preferred an appeal before the ld. CIT(A) and since there was no compliance on the preferred an appeal before the ld. CIT(A) and since there was no compliance on the preferred an appeal before the ld. CIT(A) and since there was no compliance on the part of the assessee to the notices issued by him fixing the said appeal for hearing part of the assessee to the notices issued by him fixing the said appeal for hearing part of the assessee to the notices issued by him fixing the said appeal for hearing from time to time, the ld. CIT(A) dismissed the appeal of the a from time to time, the ld. CIT(A) dismissed the appeal of the assessee vide is appellate ssessee vide is appellate order dt. 16/01/2019, passed order dt. 16/01/2019, passed ex-parte, thereby confirming the addition u/s 68 and thereby confirming the addition u/s 68 and the disallowance u/s 14A r.w.r. 8D the disallowance u/s 14A r.w.r. 8D, made by the Assessing Officer. Aggrieved by the Aggrieved by the order of the ld. CIT(A), the assessee has preferred this appeal order of the ld. CIT(A), the assessee has preferred this appeal before the Tribunal. before the Tribunal. 4. We have heard the arguments of both the sides and perused the relevant We have heard the arguments of both the sides and perused the relevant We have heard the arguments of both the sides and perused the relevant material available on record. At the outset it is noted that there is a delay of 200 days material available on record. At the outset it is noted that there is a delay of 200 days material available on record. At the outset it is noted that there is a delay of 200 days on the part of the assessee in filing this appeal before the Tribunal. on the part of the assessee in filing this appeal before the Tribunal. In this regard, the In this regard, the assessee has filed an affidavit explaining the reasons for the said delay as well as for assessee has filed an affidavit explaining the reasons for the said delay as well as for assessee has filed an affidavit explaining the reasons for the said delay as well as for the non-compliance on the part of the assessee before the ld. CIT(A) during the course compliance on the part of the assessee before the ld. CIT(A) during the course compliance on the part of the assessee before the ld. CIT(A) during the course of appellate proceedings as under: of appellate proceedings as under:- “3. That an appeal was That an appeal was filed before the Ld. C.I.T.(A)-17, Kolkata agitating the 17, Kolkata agitating the disallowances/additions made in the assessment order. The appellate order u/s. disallowances/additions made in the assessment order. The appellate order u/s. disallowances/additions made in the assessment order. The appellate order u/s. 250 of the Act was passed on 16.01.2019 in Appeal No.4811CIT(A) 250 of the Act was passed on 16.01.2019 in Appeal No.4811CIT(A) 250 of the Act was passed on 16.01.2019 in Appeal No.4811CIT(A)-17/KoVI7-18, sustaining the disallowances/additions made sustaining the disallowances/additions made in the assessment order and thus in the assessment order and thus dismissing the appeal. dismissing the appeal. 4. That the income That the income-tax matter of the company was being independently looked tax matter of the company was being independently looked after by the Accountant of the company. Therefore, the management of the after by the Accountant of the company. Therefore, the management of the after by the Accountant of the company. Therefore, the management of the company was not aware about passing of the said company was not aware about passing of the said appellate order. He was appellate order. He was irregular in his services and ultimately left the job of the company without irregular in his services and ultimately left the job of the company without irregular in his services and ultimately left the job of the company without taking any step or even intimating the same to the management. Therefore, the taking any step or even intimating the same to the management. Therefore, the taking any step or even intimating the same to the management. Therefore, the

3 ITA No. 2503/Kol/2019 Assessment Years: 2012-13 Vasupujya Enterprises Pvt. Ltd Vasupujya Enterprises Pvt. Ltd. management was not practically aware of passing of the said appellate order management was not practically aware of passing of the said appellate order management was not practically aware of passing of the said appellate order and thus to further take appropriate step in this matter. nd thus to further take appropriate step in this matter. 5. That a new Accountant thereafter took charge in his place, who was also not That a new Accountant thereafter took charge in his place, who was also not That a new Accountant thereafter took charge in his place, who was also not aware of the said appellate order. It was only on 11.09.2019 when submitting e aware of the said appellate order. It was only on 11.09.2019 when submitting e aware of the said appellate order. It was only on 11.09.2019 when submitting e- reply to the notice of the Ld. A.O. in reply to the notice of the Ld. A.O. in relation to A.Y. 2017-18 in respect of another 18 in respect of another group company M/s. Invesco Finance Pvt. Ltd., the present Accountant found the group company M/s. Invesco Finance Pvt. Ltd., the present Accountant found the group company M/s. Invesco Finance Pvt. Ltd., the present Accountant found the appellate order of that company uploaded in the website of the Department on appellate order of that company uploaded in the website of the Department on appellate order of that company uploaded in the website of the Department on 11.03.2019. 6. That, the Accountant could not, howeve That, the Accountant could not, however, find out any such order of the r, find out any such order of the appellant-company being up loaded in the Department's website. Considering company being up loaded in the Department's website. Considering company being up loaded in the Department's website. Considering that the appellate order might have been received by the previous Accountant that the appellate order might have been received by the previous Accountant that the appellate order might have been received by the previous Accountant and after a thorough search, the hard copy of the appellate order in r and after a thorough search, the hard copy of the appellate order in r and after a thorough search, the hard copy of the appellate order in respect of the present petitioner the present petitioner-company was ultimately traced in the mixed bundle of company was ultimately traced in the mixed bundle of papers. It was, therefore not known when the said order was actually served on papers. It was, therefore not known when the said order was actually served on papers. It was, therefore not known when the said order was actually served on the petitioner-assessee. On the above facts, the actual date of service of the order assessee. On the above facts, the actual date of service of the order assessee. On the above facts, the actual date of service of the order is not known as the Accountant at the relevant time had already left the service known as the Accountant at the relevant time had already left the service known as the Accountant at the relevant time had already left the service of the company without passing over any information about receipt of any such of the company without passing over any information about receipt of any such of the company without passing over any information about receipt of any such order. Therefore, having no other instant remedy and to reduce the delay in order. Therefore, having no other instant remedy and to reduce the delay in order. Therefore, having no other instant remedy and to reduce the delay in filing the appeal, the date filing the appeal, the date 11.03.2019 is considered for counting the period of 11.03.2019 is considered for counting the period of delay in the instant case, on which date order of the other group company M delay in the instant case, on which date order of the other group company M delay in the instant case, on which date order of the other group company M/s. Invesco Finance Pvt. Ltd. was uploaded to the Department's Website. Invesco Finance Pvt. Ltd. was uploaded to the Department's Website. Invesco Finance Pvt. Ltd. was uploaded to the Department's Website. 7. That, on the above facts, therefore, a petition for condonation of delay is being That, on the above facts, therefore, a petition for condonation of delay is being That, on the above facts, therefore, a petition for condonation of delay is being filed before the Hon'ble Tribunal considering the date 11.03.2019 as receipt filed before the Hon'ble Tribunal considering the date 11.03.2019 as receipt filed before the Hon'ble Tribunal considering the date 11.03.2019 as receipt date. That being so, the appeal before this Hon'ble Tribunal should have been date. That being so, the appeal before this Hon'ble Tribunal should have been date. That being so, the appeal before this Hon'ble Tribunal should have been filed within 10.05. filed within 10.05.2019. However, the appeal has been filed before this Hon'ble 2019. However, the appeal has been filed before this Hon'ble Tribunal on 26.11.2019, resulting in a delay of 198 days beyond the prescribed Tribunal on 26.11.2019, resulting in a delay of 198 days beyond the prescribed Tribunal on 26.11.2019, resulting in a delay of 198 days beyond the prescribed due date. 8. That, the new Accountant came to know only on 11.09.2019 about the impugned That, the new Accountant came to know only on 11.09.2019 about the impugned That, the new Accountant came to know only on 11.09.2019 about the impugned appellate order dated 16.0 appellate order dated 16.01.2019 when he was e-filing a reply to notice for A.Y. filing a reply to notice for A.Y. 2017-18 in respect of other group company. He was also busy with Tax Audit 18 in respect of other group company. He was also busy with Tax Audit 18 in respect of other group company. He was also busy with Tax Audit Report of the company for F.Y.2018 Report of the company for F.Y.2018-19 and other companies of the group and e 19 and other companies of the group and e- filing of the same. filing of the same. 9. That, thereafter on appr That, thereafter on approval from the management, the Accountant consulted oval from the management, the Accountant consulted the Lawyer about the Lawyer about the future course of action in respect of the said order of Ld. he future course of action in respect of the said order of Ld. C.I.T.(A), who advised that the T.(A), who advised that the order is an appealable order independently and rder is an appealable order independently and hence we need to file an appeal before the hence we need to file an appeal before the Hon’ble Tribunal. 10. That having come to know of our duty to file an appeal, as aforesaid, the That having come to know of our duty to file an appeal, as aforesaid, the That having come to know of our duty to file an appeal, as aforesaid, the relevant papers in relation to the above matter were handed over to our Lawyer relevant papers in relation to the above matter were handed over to our Lawyer relevant papers in relation to the above matter were handed over to our Lawyer for preparation and filing of the appeal before this Hon'ble Tribunal, which has for preparation and filing of the appeal before this Hon'ble Tribunal, which has for preparation and filing of the appeal before this Hon'ble Tribunal, which has been filed on 26.11.2019 and in the process this delay of 198 days beyond the been filed on 26.11.2019 and in the process this delay of 198 days beyond the been filed on 26.11.2019 and in the process this delay of 198 days beyond the prescribed due date has been occurred. prescribed due date has been occurred. 11. That, there was no mala fide intention behind not filing the appeal within the That, there was no mala fide intention behind not filing the appeal within the That, there was no mala fide intention behind not filing the appeal within the prescribed time, because in that case the petitioner prescribed time, because in that case the petitioner-company would be the mpany would be the sufferer by paying additional income- er by paying additional income-tax on such an income which is not taxable tax on such an income which is not taxable at all under the Act. at all under the Act. 12. That the unintentional delay of 198 days in filing the appeal before the Hon'ble That the unintentional delay of 198 days in filing the appeal before the Hon'ble That the unintentional delay of 198 days in filing the appeal before the Hon'ble Tribunal is for good and sufficient reason and th Tribunal is for good and sufficient reason and there was no intentional motive in ere was no intentional motive in

4 ITA No. 2503/Kol/2019 Assessment Years: 2012-13 Vasupujya Enterprises Pvt. Ltd Vasupujya Enterprises Pvt. Ltd. filing the appeal belatedly, inasmuch as that would result in serious risk and the filing the appeal belatedly, inasmuch as that would result in serious risk and the filing the appeal belatedly, inasmuch as that would result in serious risk and the company would not have gained in any manner whatsoever. company would not have gained in any manner whatsoever. 13. That to meet the cause of substantial justice, technical considerations should That to meet the cause of substantial justice, technical considerations should That to meet the cause of substantial justice, technical considerations should not be preferred and the assessee be preferred and the assessee-company has thus filed a condonation petition company has thus filed a condonation petition before the Hon'ble Tribunal along with appeal papers in Memorandum of before the Hon'ble Tribunal along with appeal papers in Memorandum of before the Hon'ble Tribunal along with appeal papers in Memorandum of Appeal, praying condonation of such unintentional delay and admission of the Appeal, praying condonation of such unintentional delay and admission of the Appeal, praying condonation of such unintentional delay and admission of the appeal for adjudication on me appeal for adjudication on merits.”

4.1. Keeping in view the reasons given by the assessee as above in the affidavit Keeping in view the reasons given by the assessee as above in the affidavit Keeping in view the reasons given by the assessee as above in the affidavit filed during the course of appellate proceedings before the Tribunal, we are satisfied filed during the course of appellate proceedings before the Tribunal, we are satisfied filed during the course of appellate proceedings before the Tribunal, we are satisfied that there was a sufficient cause for the delay of 200 days on the part of the a that there was a sufficient cause for the delay of 200 days on the part of the a that there was a sufficient cause for the delay of 200 days on the part of the assessee in filing of this appeal before the Tribunal as well as for the non in filing of this appeal before the Tribunal as well as for the non-compliance on the compliance on the part of the assessee during the course of appellate proceedings before the ld. CIT(A). part of the assessee during the course of appellate proceedings before the ld. CIT(A). part of the assessee during the course of appellate proceedings before the ld. CIT(A). Even the ld. D/R has not raised any objection in this regard. He, however, Even the ld. D/R has not raised any objection in this regard. He, however, Even the ld. D/R has not raised any objection in this regard. He, however, has contended that the matter may be sent back to the ld. CIT(A) for disposing off the contended that the matter may be sent back to the ld. CIT(A) for disposing off the contended that the matter may be sent back to the ld. CIT(A) for disposing off the appeal of the assessee on merit. The delay of 200 days on the part of the assessee in appeal of the assessee on merit. The delay of 200 days on the part of the assessee in appeal of the assessee on merit. The delay of 200 days on the part of the assessee in filing of this appeal is accordingly condoned and filing of this appeal is accordingly condoned and setting aside the impugned order aside the impugned order passed by the ld. CIT(A), we remit the matter back to the ld. CIT(A) , we remit the matter back to the ld. CIT(A) for disposing off for disposing off the appeal of the assessee afresh on merit after giving the assessee proper and the appeal of the assessee afresh on merit after giving the assessee proper and the appeal of the assessee afresh on merit after giving the assessee proper and sufficient opportunity of being heard. As undertaken by the ld. Counsel for the sufficient opportunity of being heard. As undertaken by the ld. Counsel for the sufficient opportunity of being heard. As undertaken by the ld. Counsel for the assessee, the assessee shall make due compliance before the ld. CIT(A) and shall the assessee shall make due compliance before the ld. CIT(A) and shall the assessee shall make due compliance before the ld. CIT(A) and shall extend all possible cooperation in order to enable the ld. CIT(A) to dispose off the extend all possible cooperation in order to enable the ld. CIT(A) to dispose off the extend all possible cooperation in order to enable the ld. CIT(A) to dispose off the appeal afresh on merits expeditiously. appeal afresh on merits expeditiously.

Order pronounced in the open court on Order pronounced in the open court on the 10th day of June June, 2020.

Sd/- Sd/- [S.S. Godara] [P.M. Jagtap] Judicial Member Vice President Dated : 10.06.2020 {SC SPS}

ITA No. 2503/Kol/2019 Assessment Years: 2012-13 Vasupujya Enterprises Pvt. Ltd Vasupujya Enterprises Pvt. Ltd.

Copy of the order forwarded to: 1. Vasupujya Enterprises Pvt. Ltd Vasupujya Enterprises Pvt. Ltd 35, C.R. Avenue Kolkata – 700 012