M/S PARICHITI SOFTWARE PVT. LTD.,KOLKATA vs. I.T.O.,WARD-5(2), KOLKATA

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ITA 1995/KOL/2019Status: DisposedITAT Kolkata31 December 2019AY 2013-142 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal condoned the delay in filing the appeal, citing the principle of substantial justice. It also deleted the Section 14A disallowance as the assessee had not derived any exempt income.

What were the facts?

The assessee's appeal concerned the disallowance of Rs. 26,43,535/- under Section 14A read with Rule 8D. The CIT(A) had refused to condone a 11-day delay in filing the appeal.

What were the issues?

Whether the delay in filing the appeal should be condoned and whether disallowance under Section 14A is applicable in the absence of exempt income.

Which sections of the Income-tax Act were involved?

Section 14A

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Income Tax Appellate Tribunal, “SMC”, BENCH KOLKATA

Before: SHRI S. S. GODARA, JM

For Appellant: Shri Manoj Kataruka, Advocate
Hearing: 24/12/2019Pronounced: 31/12/2019

Appellant by : Shri Manoj Kataruka, Advocate Respondent by : Shri Jayanta Khanra, JCIT, Sr. DR सुनवाईक�तार�ख/ Date of Hearing : 24/12/2019 घोषणाक�तार�ख/Date of Pronouncement : 31/12/2019 आदेश / O R D E R This assessee’s appeal for assessment year 2016-17 arises against the Commissioner of Income Tax (A)-2, Kolkata dated 05.08.2019 passed in case no. 10234/CIT(A)-2/2017-18 involving proceedings u/s 154 of the Income Tax Act, 1961; in short ‘the Act’. Heard both the parties. Case files perused.

2.

It transpires during the course of hearing that the sole issue raised on merits is that of correctness of both the lower authorities’ action disallowing / adding an amount of Rs. 26,43,535/- u/s 14A read with Rule 8D of the Act.

3.

It further emerges that the CIT(A) has refused to condone 11 days’ delay in filing of the lower appeal. The assessee had filed its condonation petition stating reasons of delay which have been rejected in the CIT(A) order. Hon’ble apex court’s landmark decision in COLLECTOR, LAND ACQUISITION VS. Mst. KATIJI (1987) 167 ITR 471 (SC) settled the law long back that the cause of substantial justice must prevail overall technical aspects. I, therefore, go by the M/s. Parichiti Software Pvt. Ltd. very reasoning to condone the impugned delay of 11 days in filing of the lower appeal hereinabove. The CIT(A)’s finding to this effect are reversed.

4.

Next comes the correctness of section 14A read with Rule 8D disallowance of Rs. 26,43,535/-. Suffice to say, the assessee has not derived any exempt income in the impugned assessment year. Hon’ble jurisdictional high court’s decision in CIT vs Ashika Global Securities ITAT 100of 2014, GA 2122 of 2014 dated 11.06.2017 holds that the impugned disallowance provision does not applies in absence of any exempt income. I therefore delete the impugned section 14A disallowance for this precise reason also.

5.

The assessee’s appeal is allowed.

Order is pronounced in the open court on 31.12.2019.

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