EXTENSIVE TRADING PRIVATE LIMITED,DELHI vs. INCOME TAX OFFICER, WARD -9(1), DELHI, DELHI

PER M. BALAGANESH, A. M.: 1. The appeal in ITA No.625/Del/2025 for AY 2018-19, arises out of the order of the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘ld. NFAC’, in short] in Appeal No. ITBA/NFAC/S/250/2024-25/1066721206(1) dated 15.07.2024 against the order of assessment passed u/s 144 r.w.s. 144B of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 21.04.2021 by the Assessing Officer, NeAC, Delhi (hereinafter referred to as ‘ld. AO’). 2. The only effective issue involved in this appeal is as to whether the Learned NFAC was justified in confirming the disallowance made by the Learned AO under section 14A of the Act in the absence of any exempt income. Extensive Trading (P) Ltd 3. None appeared on behalf of the assessee. We have heard the Learned DR and perused the materials available on record. The Learned DR fairly submitted that there was no exempt income derived by the assessee in the year under consideration, but however, the disallowance of expenses under section 14A of the Act would still operate in view of the CBDT Circular No. 5/2014. We find that the recent decision of Hon’ble Delhi High Court in the case of PCIT vs Era Infrastructure (India) Ltd reported in 141 taxmann.com 289 (Del HC) had held that amendment made by Finance Act, 2022 to section 14A of the Act by inserting a non-obstante clause and Explanation will take effect from 1-4- 2022 and cannot be presumed to have retrospective effect and further held that no disallowance could be made under section 14A of the Act if no exempt income was earned by assessee. Respectfully following the same, the grounds raised by the assessee are allowed. 4. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 14/05/2025. - - (YOGESH KUMAR U.S.) ACCOUNTANT MEMBER

Dated: 14/05/2025
A K Keot