Court dismisses appeal due to delay, upholds ITAT decision on tax effect, stresses timely compliance.

The Court refused to condone the extraordinary delay of 1100 days in filing the appeal, emphasizing timely compliance with procedural requirements. Regarding the merits of the appeal on tax effect and interpretation of law, the Court upheld the ITAT's decision based on a previous judgment, emphasizing the necessity for the AO to provide reasons for rejecting the Assessee's expenditure calculation. As the AO failed to do so, the Court found no substantial question of law for consideration and dismissed the appeal due to the significant delay in re-filing and on merits.

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Issues involved:
1. Condonation of delay in filing the appeal
2. Merits of the appeal regarding tax effect and interpretation of law

Condonation of delay in filing the appeal:
The Court noted a delay of 1100 days in filing the appeal, attributing it to the transition to e-filing and the practice directions issued by the Court. Despite providing ample time and resources for the bar to adapt to e-filing, the Court deemed the delay unacceptable. Consequently, the Court refused to condone the extraordinary delay of 1100 days, emphasizing the importance of timely compliance with procedural requirements.

Merits of the appeal regarding tax effect and interpretation of law:
In analyzing the appeal related to the tax effect arising from an ITAT order, the Court observed that the tax effect was less than the specified amount. However, due to the commonality of the impugned order with other assessment years, the appeal was considered on merits. The central issue raised was whether the AO was justified in not accepting the Assessee's expenditure calculation under Section 14A of the Income Tax Act without recording reasons, as per a previous judgment. The Court upheld the ITAT's decision to rely on the precedent, emphasizing the necessity for the AO to provide reasons for rejecting the Assessee's expenditure calculation. As the AO failed to do so in this case, the Court found no substantial question of law for consideration and dismissed the appeal both on the grounds of the significant delay in re-filing and on merits.

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