PONNI SUGARS (ERODE) LIMITED,PERUNGUDI CHENNAI vs. DCIT CIRCLE-1(1),LTU, CHENNAI

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ITA 352/CHNY/2023Status: DisposedITAT Chennai22 September 2023AY 2011-123 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the Assessing Officer's satisfaction for applying Rule 8D was sufficient, and the disallowance made by the lower authorities was in conformity with the statutory mandate. Therefore, no interference was required.

What were the facts?

The assessee sought recall of an ex-parte order. The Tribunal recalled the order and restored the appeal. The sole issue was a disallowance under Section 14A.

What were the issues?

Whether the Assessing Officer recorded sufficient objective satisfaction before applying Rule 8D for disallowance under Section 14A.

Which sections of the Income-tax Act were involved?

Section 14A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘B’ BENCH, CHENNAI

Before: HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM & HON’BLE SHRI MANOMOHAN DAS

Heard together (2 matters)

M.A. No.122/Chny/2023
ITA No.352/Chny/2023

Read from the judgment's own cause title. This page is filed under one of them.

आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. By way of this misc. application in MA No.122/Chny/2023, the assessee seeks recall of ex-parte order passed by Tribunal in captioned appeal vide order dated 25-04-2023. The Ld. AR sought invocation of Rule 24 of ITAT Rules, 1963 and submitted that the non- appearance was neither willful nor intentional. The Ld. Sr. DR 2 - submitted that the order has been passed considering the factual matrix of the case.

2.

Since the order under consideration is an ex-parte order, concurring with the submissions of Ld. AR, the said order stands recalled and the appeal is restored back to its original status.

3.

During hearing, Ld. AR as well as Ld. Sr. DR submitted that only issue under appeal is small disallowance u/s 14A and therefore, the appeal may also be taken up for hearing and disposal. Accordingly, with the consent of both the sides, the appeal was taken up for hearing and disposal.

4.

The only point urged by Ld. AR is that an objective satisfaction has not been recorded by Ld. AO before applying Rule 8D. The Ld. Sr. DR supported the impugned order. Having heard rival submissions and upon perusal of case records, the appeal is disposed-off as under. The impugned order has been passed by learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] on 19-01-2023 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s.143(3) of the Act on 26-03-2014. The solitary issue in the appeal is disallowance u/s 14A.

5.

Upon perusal of assessment order, it could be seen that Ld. AO has computed disallowance u/s 14A u/r 8D(2)(iii) for Rs.4.14 Lacs, being 0.5% of average investments. The Ld. CIT(A) directed Ld. AO to adjust the same by reducing suo-motu disallowance of Rs.3.76 Lacs already offered by the assessee. Aggrieved, the assessee is in further appeal before us.

6.

Upon perusal of para-6 of assessment order, it could be seen that Ld. AO, considering the provisions of Sec. 14A of the Act and having 3 - regard to the accounts of the assessee, has held that expenses were to be disallowed u/r 8D. We find that their in no specific format in which the satisfaction was to be recorded. Therefore, the plea of Ld. AR could not be accepted. The disallowance made by lower authorities is in conformity with the statutory mandate. Therefore, no interference is required in the impugned order.

7.

The misc. application stand allowed. The appeal stand dismissed.

Both orders pronounced in the open Court on 22nd September, 2023.

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