PR. COMMISSIONER OF INCOME TAX-1 vs. M/S ATHENA ENERGY VENTURES PVT. LTD.

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ITA - 71 / 2023HC Delhi07 February 20233 pages
For Petitioner: SANJAY KUMAR
AI SummaryDismissed

What did the High Court hold?

The High Court condoned the delay in filing the appeal. However, it noted that the issue regarding disallowance under Section 14A was covered against the revenue by previous judgments, and no substantial question of law arose.

What were the facts?

The revenue appealed against an ITAT order that sustained the CIT(A)'s finding that investments in subsidiary companies were for strategic purposes and no dividend income was earned. The appeal was filed with a significant delay.

What were the issues?

Whether the disallowance under Section 14A was justified when investments were made for strategic purposes and no dividend income was earned. Whether the appeal raised a substantial question of law.

Which sections of the Income-tax Act were involved?

Section 14A

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Cases cited in this judgment(2)Show list

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$~30 * IN THE HIGH COURT OF DELHI AT NEW DELHI %

Date of decision: 07.02.2023 + ITA 71/2023

PR. COMMISSIONER OF INCOME TAX-1 ..... Appellant Through: Mr Sanjay Kumar, Sr. Standing Counsel.

versus

M/S ATHENA ENERGY VENTURES PVT. LTD..... Respondent

Through: None. CORAM: HON'BLE MR JUSTICE RAJIV SHAKDHER HON'BLE MS JUSTICE TARA VITASTA GANJU [Physical Hearing/Hybrid Hearing (as per request)] RAJIV SHAKDHER, J.: (ORAL) CM No.5866/2023[Application filed on behalf of the appellant seeking condonation of delay of 180 days in re-filing the appeal] 2. This is an application filed on behalf of the appellant/revenue seeking condonation of delay in re-filing the appeal. 2.1 There is a delay of 180 days. 3. The reason given is that certain information was required from the Income Tax Department to remove the defects. 3.1 Although the reason is not satisfactory, given the fact that the impugned order was passed around the time when Corona Virus was raging in the city we are inclined to take a benevolent view. 4. According the delay is condoned. 5. The application is disposed of in the aforesaid terms. ITA 71/2023 6. This is an appeal directed against order dated 17.02.2021 passed by Digitally Signed By:RAHUL Signing Date:07.03.2023 18:39:03 Signature Not Verified the Income Tax Appellate Tribunal [in short, “the Tribunal”]. 7. The only issue which arises for consideration in the instant appeal concerns the disallowance made by the Assessing Officer (AO) amounting to Rs 3,14,71,557/- under Section 14A of the Income Tax Act, 1961 [in short, “the Act”] read with Rule 8D of the Income Tax Rules, 1962 [in short, “1962 Rules”]. 7. A finding of fact has been returned by the Commissioner of Income Tax Appeals [in short, “CIT(A)”] to the effect that the appellant made investment in subsidiary/associated companies for strategic purposes. 7.1 The CIT(A) has also found that the respondent/assessee has not earned any dividend income which was exempted under the Act. 7.2 The Tribunal has affirmed these findings of fact and thus sustained the order of the CIT(A). 8. The relevant observations are made in paragraph 5 of the impugned order. 9. Mr Sanjay Kumar, who appears on behalf of the appellant/revenue, cannot but accept that this issue is covered against the revenue via judgment of the coordinate bench rendered in Cheminvest Ltd. Vs. CIT 378 ITR 33. 10. As a matter of fact, in the decision rendered on 05.12.2022 in ITA 505/2022, titled Principal Commissioner Of Income Tax, Delhi-4 v. M/S MMTC LTD, the Court even dealt with the amendment brought about under Section 14A of the Finance Act, 2022. 11. The relevant observations made by another coordinate bench of this court which included one of us i.e., Rajiv Shakdher, J read as follows: “8. Mr Ajit Sharma, who appears on behalf of the appellant/revenue, has fairly placed before us a judgment dated 20.07.2022, rendered by a coordinate bench of this Court in ITA No.204/2022, titled Principal Digitally Signed By:RAHUL Signing Date:07.03.2023 18:39:03 Signature Not Verified Commissioner of Income Tax (Central)-2 v. M/s Era Infrastructure (India) Ltd., which has ruled on the amendment which was brought about in Section 14A of the Act via Finance Act 2022. 8.1. The coordinate bench has ruled that the amendment will not operate retrospectively. 8.2. As far as the merits of the matter are concerned, it appears that the coordinate bench in the aforesaid judgment has referred to judgments passed by other coordinate benches rendered in PCIT v. IL & FS Energy Development Company Ltd. 2017 SCC OnLine Del 9893 and Cheminvest Limited v. Commissioner of Income Tax-VI (2015) 378 ITR 33. 8.3. Mr Sharma informs us that the decision rendered by the Division Bench of this court in PCIT v. IL & FS Energy Development Company Ltd. has been assailed by the appellant/revenue by instituting a special leave petition (SLP), which is pending adjudication.”

12.

Given these circumstances, we are of the view that, insofar as this case is concerned, no substantial question of law arises for consideration. 13. We are informed that appellant/revenue has filed a Special Leave Petition vis-a-vis the judgment in PCIT v. IL & FS Energy Development Company Ltd. 13.1 In case, appellant/revenue were to succeed, it would then have liberty to approach the court to re-open the appeal. 14. Appeal is accordingly closed. 14.1 Registry is directed to dispatch a copy of the judgement rendered today to respondent/assessee via all modes including email.

RAJIV SHAKDHER, J

TARA VITASTA GANJU, J

FEBRUARY 7, 2023/r Digitally Signed By:RAHUL Signing Date:07.03.2023 18:39:03 Signature Not Verified

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