2023 (1) TMI 1434 - HC - Income Tax

Calcutta HC Permits 577-Day Delay in Appeal; Dismisses Revenue's Case for Failing to Record Satisfaction u/r 8D.

PRINCIPAL COMMISSIONER OF INCOME TAX-2 KOLKATA Versus M/s. WEST BENGAL INFRASTRUCTURE DEVELOPMENT FINANCE CORPORATION LTD

The HC of Calcutta allowed a 577-day delay in filing an appeal under Section 260A of the Income Tax Act, 1961. The appeal by the revenue was dismissed ... Disallowance u/s 14A r.w.r. 8D - Mandation to record satisfaction for invoking Rule 8D - HELD THAT:- We had an occasion to consider an identical issue in Keshoram Industries Ltd.[2022 (1) TMI 995 - CALCUTTA HIGH COURT]wherein it was pointed out as to how the power u/s 14A[2] read with Rule 8D could be invoked and it was held that the assessing officer needs to record satisfaction that having regard to the kind of the assessee suo moto disallowance u/s 14A was not correct and it will be in those cases where the assessee in his return has himself apportioned but the assessing officer did not accept the apportionment. In any event, the assessing officer will have to record its satisfaction to the said effect. On perusal of the assessment order passed u/s 143[3] of the Act we find that the assessing officer was not recorded any satisfaction for invoking Rule 8D of the Rules. Decided in favour of assessee. The High Court of Calcutta allowed the condonation of a 577-day delay in filing an appeal under Section 260A of the Income Tax Act, 1961. The appeal by the revenue was dismissed as the assessing officer did not record satisfaction for invoking Rule 8D of the Income Tax Rules regarding disallowance under Section 14A of the Act. The Court upheld the decision of the Commissioner of Income Tax (Appeals) in favor of the assessee. The substantial question of law was answered against the revenue. (Case citation: ITAT/274/2022)