Tribunal allows appeal, remands Section 14A issue for fresh evidence submission. Appeal allowed for statistical purposes.

The Tribunal condoned the delay in filing the appeal, noting the absence of deliberate intent. Regarding the disallowance under Section 14A, the Tribunal remanded the issue for fresh consideration, allowing the assessee to submit additional evidence on the source of funds for investments. The disallowance under Section 14A was set aside for reevaluation due to a lack of identification of expenses attributable to earning exempt income. The appeal was allowed for statistical purposes, emphasizing the importance of substantiating claims in tax assessments.

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Issues:
1. Condensation of delay in filing appeal.
2. Disallowance under section 14A of the Income Tax Act.

Analysis:
1. Delay in Filing Appeal:
The appeal was filed with a delay of 68 days, citing reasons related to the departure of the tax executive managing the representation, misplacement of files, and lack of communication about the impugned order. The Tribunal considered the explanations provided and found no willful act or negligence on the part of the assessee. Citing judicial precedents, the Tribunal condoned the delay, emphasizing the absence of deliberate intent.

2. Disallowance under Section 14A:
The primary issue in the appeal pertained to the disallowance of Rs. 18,11,700 under section 14A of the Act concerning interest and other expenses. The AO proposed the disallowance based on the provisions of section 14A r.w.r. 8D, noting dividend income earned by the assessee. The assessee contended that investments were made from surplus funds, not borrowed funds, and were liquidated as needed for operational expenses. However, the AO proceeded with the disallowance without considering the assessee's submissions.

3. Additional Evidence and Remand:
The assessee sought to admit additional evidence related to the source of funds for investments, highlighting the lack of consideration by the AO and CIT(A). The Tribunal admitted the additional evidence and remanded the issue to the AO for fresh consideration, emphasizing the need to evaluate the plea that investments were made from surplus business funds, not borrowed funds.

4. Fresh Consideration and Directions:
Regarding the disallowance under section 14A r.w.r. 8D(2)(iii), the Tribunal observed a lack of identification of expenses attributable to earning exempt income. Consequently, the disallowance was set aside to the AO for reevaluation, with directions for the assessee to substantiate that none of the other expenses could be linked to earning exempt income. The appeal was allowed for statistical purposes.

In conclusion, the Tribunal addressed the delay in filing the appeal and the disallowance under section 14A meticulously, emphasizing the need for a fresh assessment based on the submissions and additional evidence provided by the assessee. The judgment highlighted the importance of substantiating claims and considering all relevant factors in tax assessments.

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