Supreme Court: Courts Have Sometimes Failed Arbitration, With Interference Curing No Disease  ||  Supreme Court: Co-Heir Cannot Sell Other Heirs' Shares as Karta After Intestate Succession  ||  SC: Casual Labourers With Temporary Status are Eligible For Pension Even Without Regularisation  ||  Supreme Court: High Courts Must Record the Nature of Crime and Allegations While Quashing FIRs  ||  Delhi HC Rejected Pernod Ricard’s Plea Against Denial of Wholesale Liquor License over Excise Case  ||  Gujarat HC: Lalita Kumari Ruling Does Not Permit Deceased’s Kin to Invoke Art 226 For FIR Failure  ||  Ker HC: Denying Disability Pension to Army Personnel Based on Unreasoned Medical Opinion is Invalid  ||  Kerala HC Directs Family Courts to Follow Calcutta HC Custody Guidelines Till State Rules Framed  ||  Allahabad HC Allows LIC Employees to Be Engaged as Census Enumerators and Supervisors For Duties  ||  Supreme Court Unveiled Victim Protection Plan For Trafficking Survivors and Urged Legal Reforms    

The Pr. Commissioner of Income Tax – 18 vs. Oil Industry Development Board - (High Court of Delhi) (21 Nov 2022)

Section 14A of IT Act will not apply, if no exempt income is received or receivable during the relevant previous year

MANU/DE/4660/2022

Direct Taxation

Present Income Tax Appeal has been filed challenging the Order passed by the Income Tax Appellate Tribunal ('ITAT') for Assessment Year 2012-13. The Appellant states that, the ITAT has erred in deleting the addition of Rs. 4.65 crores made by the assessing officer under Section 14A of the Income Tax Act, 1961 ('the Act'). He states that, the ITAT has erred in holding that no disallowance can be made under Section 14A of the Act read with Rule 8D of the Income Tax Rule, 1962 in the case wherein no exempt income has been earned during the year under consideration.

A perusal of the paper book reveals that the authorities below have given concurrent finding of fact that the assessee did not earn any dividend income during the year under consideration.

This Court is of the view that the present case is covered by the Division Bench judgment in Cheminvest Ltd. vs. CIT, wherein it has been held that the expression 'does not form part of the total income' in Section 14A of the Act means that there should be an actual receipt of income which is not includible in the total income, during the relevant previous year for the purpose of disallowing any expenditure incurred in relation to the said income. In other words, Section 14A will not apply if no exempt income is received or receivable during the relevant previous year.

Furthermore, this Court in Pr. Commissioner of Income Tax (Central)-2 Vs. M/s Era Infrastructure (India) Ltd., has dealt with the issue of amendment made by the Finance Act, 2022 to Section 14A of the Act. The amendment of Section 14A, which is "for removal of doubts" cannot be presumed to be retrospective even where such language is used, if it alters or changes the law as it earlier stood."

Accordingly, this Court is of the view that no substantial question of law arises for consideration in the present appeal. Accordingly, the same is dismissed.

Tags : ADDITIONS   DELETION   LEGALITY  

Share :        

Disclaimer | Copyright 2026 - All Rights Reserved