INVESCO FINANCE PVT. LTD.,KOLKATA vs. I.T.O.,WARD-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. 2504/Kol/2019 Assessment Years: 2012-13 Invesco Finance 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. 30/01/2019, 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 a loss of Rs.51,41,925/-. In the said return, dividend income received during the year under consideration was claimed to be exempt by the assessee. However, no disallowance on account of expenses incurred in relation to the said exempt income was offered by the assessee as required by the provision 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 exempt income at Rs.76,24,666/-. He, however, restricted the disallowance u/s 14A of the Act to the extent of expenses actually incurred by the assessee at Rs.51,97,829/-. During the year under consideration, the assessee company had raised share capital of Rs.99,69,020/- with share premium of Rs.48,84,81,980/-. In order of 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 with. Even the assessee company failed to produce the directors of the share subscriber companies

2 ITA No. 2504/Kol/2019 Assessment Years: 2012-13 Invesco Finance Pvt. Ltd. for examination/verification before for examination/verification before for examination/verification before the Assessing Officer despite the Assessing Officer the Assessing Officer despite despite specific specific specific opportunities being afforded in this regard. opportunities being afforded in this regard. The Assessing Officer, therefore, treated The Assessing Officer, therefore, treated the share capital and share premium aggregating to Rs.49,84,51,000/ the share capital and share premium aggregating to Rs.49,84,51,000/- - as unexplained cash credit and addition to that extent was made by him to the total income of cash credit and addition to that extent was made by him to the total income of cash credit and addition to that extent was made by him to the total income of assessee u/s 68 of the Act. In the assessment comp u/s 68 of the Act. In the assessment completed u/s 143(3) of the Act vide leted u/s 143(3) of the Act vide order dt. 26/03/2015. 3. Against the order passed by the Assessing Officer u/s 143(3), the assessee Against the order passed by the Assessing Officer u/s 143(3), the assessee Against the order passed by the Assessing Officer 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 issu part of the assessee to the notices issued by him fixing the said appeal for hearing ed by him fixing the said appeal for hearing from time to time, the ld. CIT(A) dismissed the appeal of the assessee vide from time to time, the ld. CIT(A) dismissed the appeal of the assessee vide from time to time, the ld. CIT(A) dismissed the appeal of the assessee vide his appellate order dt. 30/01/2019 30/01/2019, passed ex-parte, thereby confirming the addition u/s thereby confirming the addition u/s 68 and the disallowance u/s 14A r.w.r. 8D 68 and the disallowance u/s 14A r.w.r. 8D, made by the Assessing Officer by the Assessing Officer. Aggrieved by the order of the ld. CIT(A), the assessee has preferred this appeal before the by the order of the ld. CIT(A), the assessee has preferred this appeal before the by the order of the ld. CIT(A), the assessee has preferred this appeal 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 no material available on record. At the outset it is noted that there is a delay of 200 days ted that there is a delay of 200 days on the part of the assessee in filing this appeal before the Tribunal. In this regard, the on the part of the assessee in filing this appeal before the Tribunal. In this regard, the on the part of the assessee in filing this appeal before the Tribunal. 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 compliance on the part of the assessee before the ld. CIT(A) during the course assessee before the ld. CIT(A) during the course of appellate proceedings as under: of appellate proceedings as under:- “3. That an appeal was filed before the Ld. C.I.T.( 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 250 of the Act was passed on 30.01.2019 in Appeal No. 147CIT(A) 147CIT(A)-17/Kol/17-18, sustaining the disallowances/additions made in the assessment order an sustaining the disallowances/additions made in the assessment order an sustaining the disallowances/additions made 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 appellate order. He was company was not aware about passing of the said appellate order. He was company was not aware about passing of the said appellate order. He was irregular in his services and ultimately left the job of the company without egular in his services and ultimately left the job of the company without egular 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 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 app and 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 relation to A.Y. 2017-18, the present Accountant found the appellate order Accountant found the appellate order and downloaded it from the website on it from the website on 11.09.2019. Thereafter on thorough search, the hard copy of the said order was 11.09.2019. Thereafter on thorough search, the hard copy of the said order was 11.09.2019. Thereafter on thorough search, the hard copy of the said order was

3 ITA No. 2504/Kol/2019 Assessment Years: 2012-13 Invesco Finance Pvt. Ltd. ultimately traced in the mixed bundle of papers. It was, therefore not known ultimately traced in the mixed bundle of papers. It was, therefore not known ultimately traced in the mixed bundle of papers. It was, therefore not known when the said order was actually served on the petitioner order was actually served on the petitioner-assessee assessee. 6. 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, on which date filed before the Hon'ble Tribunal considering the date 11.03.2019, on which date filed before the Hon'ble Tribunal considering the date 11.03.2019, on which date the said order was uploaded to the we the said order was uploaded to the website. That being so, the appeal before this so, the appeal before this Hon’ble Tribunal should have been filed within 10.05.2019. However, the appeal ble Tribunal should have been filed within 10.05.2019. However, the appeal ble Tribunal should have been filed within 10.05.2019. However, the appeal has been filed before this Hon'ble Tribunal on 26.11.2019, resulting in a delay of has been filed before this Hon'ble Tribunal on 26.11.2019, resulting in a delay of has been filed before this Hon'ble Tribunal on 26.11.2019, resulting in a delay of 198 days beyond the prescribed due date. 198 days beyond the prescribed due date. 7. That the new Accountant came to know only on 11.09.2019 about the impugned the new Accountant came to know only on 11.09.2019 about the impugned the new Accountant came to know only on 11.09.2019 about the impugned appellate order dated 30.01.2019 when he was e appellate order dated 30.01.2019 when he was e-filing a reply to notice for A.Y. filing a reply to notice for A.Y. 2017-18. He was also busy with Tax Audit Report of the company for F.Y.2018 18. He was also busy with Tax Audit Report of the company for F.Y.2018 18. He was also busy with Tax Audit Report of the company for F.Y.2018- 19 and other comp 19 and other companies of the group and e-filing of the same. 8. That thereafter on approval from the management, the Accountant consulted That thereafter on approval from the management, the Accountant consulted That thereafter on approval from the management, the Accountant consulted the Lawyer about the future course of action in respect of the said order of Ld. the Lawyer about the future course of action in respect of the said order of Ld. the Lawyer about the future course of action in respect of the said order of Ld. C.I.T.(A); who advised that the order is an appealable order in A); who advised that the order is an appealable order in A); who advised that the order is an appealable order independently and hence we need to file an appeal before the Hon'ble Tribunal. hence we need to file an appeal before the Hon'ble Tribunal. 9. 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 f for preparation and filing of the appeal before this Hon’ble Tribunal, which has 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 occurred. prescribed due date has occurred. 10. That, there was no mala fide intention behind not filing the appeal within the hat, there was no mala fide intention behind not filing the appeal within the hat, there was no mala fide intention behind not filing the appeal within the prescribed time, prescribed time, because in that case the petitioner-company would be the company would be the sufferer by paying additional income tax. er by paying additional income tax. On such an income which is not n such an income which is not taxable at all under the Act. taxable at all under the Act. 11. That the unintentional delay of 196 days in filing the appeal before the H at the unintentional delay of 196 days in filing the appeal before the H at the unintentional delay of 196 days in filing the appeal before the Hon'ble Tribunal is for good and sufficient reason and there was no intentional motive in for good and sufficient reason and there was no intentional motive in for good and sufficient reason and there was no intentional motive in filing the appeal filing the appeal belatedly, inasmuch as that would result in serious risk and the elatedly, 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. 12. That to meet the cause That to meet the cause of substantial justice, technical considerations should not 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 Appeal, praying condonation of such unintentional delay and admission of the and admission of the appeal for adjudication on merits. appeal for adjudication on merits. 13. That the above statement is true to the best of my knowledge and belief. That the above statement is true to the best of my knowledge and belief. That the above statement is true to the best of my knowledge and belief.”

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 appel filed during the course of appellate proceedings before the Tribunal, we are satisfied late proceedings before the Tribunal, we are satisfied that there was a sufficient cause for the delay of 200 days on the part of the assessee that there was a sufficient cause for the delay of 200 days on the part of the assessee 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). the course of appellate proceedings before the ld. CIT(A). 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, has Even the ld. D/R has not raised any objection in this regard. He, however, has 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

4 ITA No. 2504/Kol/2019 Assessment Years: 2012-13 Invesco Finance Pvt. Ltd. appeal of the assessee on merit. T appeal of the assessee on merit. The delay of 200 days on the part of the assessee in he 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 the appeal of the assessee afresh on merit after giving the assessee proper and 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 assessee, the assessee shall make due compliance before the ld. CIT(A) and shall assessee, the assessee shall make due compliance before the ld. CIT(A) and shall extend all possible cooperation in order to enabl extend all possible cooperation in order to enable the ld. CIT(A) to dispose off the e 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}

Copy of the order forwarded to: 1. Invesco Finance Pvt. Ltd 35, C.R. Avenue Kolkata – 700 012 2. Deputy Commissioner of Income Tax, Circle Deputy Commissioner of Income Tax, Circle-1(2) Kolkata 3. CIT(A)- 4. CIT- , 5. CIT(DR), Kolkata Benches, Kolkata. 5. CIT(DR), Kolkata Benches, Kolkata.