Mangalkamna Suppliers Pvt. Ltd, Kolkata V. CIT(A), NFAC, IT, Kolkata

ITA 534/KOL/2023

AI Insights

The case involves Mangalkamna Suppliers Pvt. Ltd., the appellant, contesting an order from the National Faceless Appeal Centre, Delhi, which disallowed certain expenses under Section 14A read with Rule 8D of the Income Tax Act, 1961, for the Assessment Year 2015-16. The primary contention was that no exempt income was earned during the year, and thus, the disallowance was uncalled for. The Tribunal noted a procedural delay in filing the appeal, which was condoned after assessing the reasons provided by the assessee. The Tribunal decided not to grant an adjournment despite a request from the assessee and proceeded to hear the case based on the submissions of the Departmental Representative and the materials on record.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 132680 (ITAT-KOLKATA)
• Duration Of Justice: 1 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-07-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: SMC
• Next Hearing Date: 12-07-2023
• Assessment Year: 2015-2016
• Appeal Filed On: 29-05-2023
• Other Referred Cases: PCIT Vs. Era Infrastructure (India) Ltd.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BRAJ KISHORE SINGH
• Keywords: Opportunity of being heard; Earning of tax free income; Set aside
• Section: 144; 14A; 250

Judgement Text

| आयकर अपीलीय अिधकरण ᭠यायपीठ, कोलकाता | IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, KOLKATA BEFORE DR. MANISH BORAD, HON’BLE ACCOUNTANT MEMBER I.T.A. No. 534/Kol/2023 Assessment Year: 2015-16 Mangalkamna Suppliers Pvt. Ltd. 441, Rabindra Sarani Ground Floor Kolkata - 700005 [PAN : AAGCM9574Q] V s CIT(A), NFAC, Income Tax अपीलाथᱮ/ (Appellant) ᮧ᭜ यथᱮ/ (Respondent) Assessee by : None Revenue by : Shri Braj Kishore Singh, JCIT, CIT D/R सुनवाई कᳱ तारीख/Date of Hearing : 13/07/2023 घोषणा कᳱ तारीख /Date of Pronouncement: 24/07/2023 आदेश/O R D E R PER DR. MANISH BORAD, ACCOUNTANT MEMBER : The present appeal is directed at the instance of the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter the “ld. CIT(A)”) dated 27/03/2023, passed u/s 250 of the Income Tax Act, 1961 (“the Act’), for Assessment Year 2015-16. 2. The Registry has pointed out that there is a delay of 3 (three) days in filing the present appeal before the Tribunal. The assessee has filed a petition for condonation stating the reasons for the said delay. After perusing the same, we are convinced that the assessee was prevented by sufficient cause from filing the appeal in time. Accordingly, we condone the delay and proceed to admit the appeal for hearing. 3. None appeared on behalf of the assessee when the case was called out for hearing. The Director of the assessee company has filed I.T.A. No. 534/Kol/2023 Assessment Year: 2015-16 Mangalkamna Suppliers Pvt. Ltd. 2 an application for adjournment. However, on perusal of the grounds of appeal, we find that the only issue that arises for our consideration in this appeal is regarding the disallowance u/s 14A r.w.r. 8D. Therefore, in our opinion, this case is not fit for grant of adjournment and the same is being disposed off after hearing the ld. D/R and perusing the material available on record. 4. We have heard the ld. D/R and perused the material placed before us. Vide Ground No. 5, the assessee has submitted that, there is no exempt income earned generated during the year or likely to be generated from the investments made and hence the disallowance u/s 14A r.w.r. 8D, is uncalled for. The ld. Assessing Officer has passed an ex-parte order u/s 144 of the Act. The Hon’ble Delhi High Court in the case of PCIT Vs. Era Infrastructure (India) Ltd. (ITA 204/2022) judgment dt. 20/07/2022, has held that the amendment made in Section 14A of the Act by Finance Act, 2022, will be applicable prospectively and also held that disallowance u/s 14A of the Act should not exceed the exempt income earned by the assessee during the year. 5. Accordingly, we set aside the issue to the file of the Assessing Officer with a direction to examine the issue of disallowance u/s 14A of the Act in the light of the judgment of the Hon’ble Delhi High Court in the case of Era Infrastructure (supra) after providing the assessee sufficient opportunity of being heard. In case the assessee is able to prove that no exempt income was earned during the year then, under I.T.A. No. 534/Kol/2023 Assessment Year: 2015-16 Mangalkamna Suppliers Pvt. Ltd. 3 these circumstances, the ld. Assessing Officer is directed not to make any disallowance u/s 14A of the Act and in case otherwise, the ld. Assessing Officer can decide the issue in accordance with law, considering the settled judicial precedent of the Hon’ble Delhi High court. 6. In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced in the Court on 24 th July, 2023 at Kolkata. Sd/- (DR. MANISH BORAD) ACCOUNTANT MEMBER Kolkata, Dated 24/07/2023 *SC SrPs आदेश कᳱ ᮧितिलिप अᮕेिषत/Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant 2. ᮧ᭜यथᱮ / The Respondent 3. संबंिधत आयकर आयुᲦ / Concerned Pr. CIT 4. आयकर आयुᲦ)अपील (/ The CIT(A)- 5. िवभागीय ᮧितिनिध ,आयकर अपीलीय अिधकरण, कोलकाता/DR,ITAT, Kolkata, 6. गाडᭅ फाईल /Guard file. आदेशानुसार/ BY ORDER, TRUE COPY Assistant Registrar आयकर अपीलीय अिधकरण ITAT, Kolkata