Tribunal upholds disallowances under Income Tax Act; assessee's appeals dismissed, option for recall available

The Tribunal dismissed all three appeals filed by the assessee regarding disallowances under Sections 14A and 36(1)(viia) of the Income Tax Act, as well as an addition for interest on seed money. The Tribunal proceeded ex-parte due to the lack of a power of attorney and seriousness on the part of the assessee. Appeals for different assessment years with identical grounds were also dismissed, with the option for the assessee to seek a recall by demonstrating seriousness in prosecuting the appeals through an authorized representative.

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Issues:
- Adjournment application due to lack of power of attorney
- Disallowance under Section 14A of the Income Tax Act
- Disallowance under Section 36(1)(viia) on account of provision of NPA written back
- Addition on account of interest on seed money
- Identical grounds of appeal in multiple assessment years

Adjournment Application and Lack of Power of Attorney:
The judgment addresses an adjournment application moved by CA B K Nohria on behalf of the assessee due to urgent work, requesting a postponement of proceedings. However, the Tribunal notes that despite previous adjournments and requests for a power of attorney, the assessee has not provided the necessary authorization. Consequently, the Tribunal decides to proceed ex-parte due to the lack of seriousness on the part of the assessee.

Disallowance under Section 14A of the Income Tax Act:
The assessee challenged the addition of Rs. 3.5 lakhs under Section 14A of the Act, related to exempt dividend income and interest on loans. The AO applied Rule 8D for disallowance, which was partly upheld by the CIT(A) based on relevant case laws. The Tribunal, after considering the arguments and following the decisions of higher courts, dismisses the appeal, confirming the CIT(A)'s findings regarding the applicability of disallowance and its restriction to the exempt income.

Disallowance under Section 36(1)(viia) on Account of NPA Written Back:
The assessee contested the disallowance of Rs. 4,29,72,691 under Section 36(1)(viia) concerning the provision of NPA written back. The AO made the addition after discrepancies were noted in the P&L account. The CIT(A) upheld the disallowance based on consistency with previous years. The Tribunal finds no fault in the CIT(A)'s decision and confirms the dismissal of the appeal.

Addition on Account of Interest on Seed Money:
The assessee disputed the addition of Rs. 35,60,752 as interest on seed money. The CIT(A) determined that the interest accrued to the assessee and was retained without evidence of transfer to the State Government. As no payment was made to the government, the AO's addition was deemed justified. The Tribunal upholds the CIT(A)'s decision, dismissing the appeal on this ground.

Identical Grounds of Appeal in Multiple Assessment Years:
For appeals pertaining to different assessment years with identical grounds, the Tribunal follows the decision on the first appeal and dismisses the subsequent appeals accordingly. The assessee is granted the liberty to seek a recall of the order upon demonstrating seriousness in prosecuting the appeals through an authorized representative.

In conclusion, all three appeals filed by the assessee are dismissed, and the order was pronounced in Chandigarh on July 26, 2022.

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