SE FREIGHT AND LOGISTICS INDIA PRIVATE LIMITED,MUMBAI vs. CIRCLE 14(1)(2), MUMBAI

PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by assessee is directed against the order of ld. CIT(A) dated 08.10.2025 for Assessment Year (AY) 2017-18. The assessee has raised following grounds of appeal: “1. That on facts and circumstances of the case and in law the learned CIT (Appeals) has erred in sustaining the disallowance of ₹ 67.12.067 u/s. 14A r.w.r. BD ignoring judicial, logical and justifiable submission made by the appellantwithout appreciating the fact that the learned AO had not provided any basis or working of disallowance made by him except mechanical reliance on Rule 8D for making the disallowance. 2. That on the facts and circumstances of the case, the learned CIT (A) has erred in confirming the disallowance u/s 14A of the Income-tax Act, 1961 without appreciating the fact that the appellant has not earned any exempt income during the relevant previous year and that as per recent consistently held judicial

SE Freight and Logistics India Private Limited ITA No. 2210/Mum/2026 (AY: 2017-18) pronouncements of various High Courts & ITAT no disallowance u/s 14A is warranted if no exempt income is earned. 3. That on the facts and circumstances of the case and in law, the learned CIT (A) has erred in sustaining addition u/s 14A even for calculating book profits u/s 115JB of the Act, which is not permissible under Income Tax Act and only specified adjustments as specified under the section can be made and thus. while calculating book profits addition u/s 14A cannot be made. 4. The appellant craves leave to add, amend, alter, substitute, modify the above grounds of appeal, if necessary while providing written submissions and personal presentation to be made at the time of hearing.” 2. Rival submissions of both the parties have been heard and record perused. The learned Authorised Representative (ld. AR) of the assessee submits that there is a delay of 42 days in filing present appeal before Tribunal. The delay in filing appeal is neither intentional nor deliberate. The assessee has filed affidavit of Nandini Jain, who is working as Assistant Manager of Freight and Logistics. The ld. AR of the assessee submits that delay is occurred due to frequent change in staff handling the taxation matter. Otherwise, there is no negligence on the part of assessee. The assessee has good case on merit and is likely to succeed, if his case is considered on merit. On merits, the ld. AR of the assessee submits that Assessing officer (AO) while passing the assessment order made additions / disallowances under section 14A of Rs. 67,12,067/-. During the financial year under consideration, the assessee has not earned any exempt income. This fact was brought in the notice of AO. It is settled position under law that when there is no exempt income, no disallowance under section 14A is warranted. The AO has not disputed the fact that there is no exempt income. Before ld. CIT(A), the assessee in its 2

SE Freight and Logistics India Private Limited ITA No. 2210/Mum/2026 (AY: 2017-18) submission categorically stated that there is no exempt income. The submissions of assessee is scanned / part of the impugned order of ld. CIT(A). The ld. CIT(A) despite taking reply on record, conveniently ignored such submission and confirmed the action of AO. 3. On the other hand, the learned Senior Departmental Representative (ld. Sr. DR) for the Revenue on the plea of condonation of delay submits that bench may take call in accordance with law. On the merits of the case, the ld. Sr. DR for the Revenue submits that lower authorities have followed instruction of Central Board of Direct Taxes (CBDT). Thus, he supports the order of lower authorities. 4. We have considered the rival submissions of both the parties and have gone through the orders of lower authorities carefully. Firstly, we are considering the plea of condonation of delay in filing appeal before Tribunal. We find that there is delay of 57 days in filing appeal before this Tribunal as worked out by registry. Before us, the assessee has filed affidavit of Assistant Manager, Freight and Logistic of assessee-company. We find that assessee has explained that due to frequent change of staff handling the taxation matter. Though, the reasons explained by the ld AR of the assessee is not convincing, yet keeping in view of the fact that delay is only of 57 days. Therefore,considering the principal of natural justice and the fact that assessee is interested in pursuing their appeal on merit. Hence, delay of 57 days in filing appeal is condoned. Now, adverting to merits of the case.

SE Freight and Logistics India Private Limited ITA No. 2210/Mum/2026 (AY: 2017-18) 5. We also find that the ld AR of the assessee has filed detailed written submissions on record without seeking permissions of the bench. Such practice is not permissible unless otherwise directed or such written submissions are filed with the permission of bench. 6. We find that AO whilefiling return of income declared income at Rs. 17.76 Crore and book profit under section 115JB at Rs. 36.36 Crore. The AO passing the assessment order recorded that assessee has made huge investment which may yield exempt income. The AO invoked the provision of section 14A r.w.r. 8D and worked out the disallowance under section 14A of Rs. 67,12,067/- and enhanced book profit to that extent. The AO while computing disallowance under Rule 8D referred the decision of Delhi Tribunal in Cheminvest Limited Vs ITO (317 ITR 86 (AT), which has been reversed by Delhi High Court. The order of AO was confirmed by ld. CIT(A). We find that before lower authorities, the assessee consistently taken a stand that there is no exempt income during the relevant financial year. Such fact is not disregarded / rejected by lower authorities. Rather, the ld CIT(A) has relied upon the CBDT Circular No. 05 of 2014. We find that in a series of decision; it has been held that when there is no exempt income no disallowance under section 14A is warranted. Such position has been affirmed in a series decision that is by Delhi High Court in Cheminvest Vs CIT (2015) 378 ITR 33 (Delhi), PCIT vs Era Infrastructure (India) Ltd. (2022) 141 taxmann.com 289 (Delhi HC) and by Gujarat High Court in CIT vs Corrtech Energy Private Ltd. (2014)

SE Freight and Logistics India Private Limited ITA No. 2210/Mum/2026 (AY: 2017-18) 45 taxmann.com 116 (Gujarat HC). Thus, respectfully following the decisions of Higher courts that when there is no exempt income, no disallowance under section 14A is warranted. Hence, AO is directed to delete the entire disallowance under section 14A. considering the facts that we have directed the AO delete the disallowance under section 14A, thus, all other grounds of appeal raised by the assessee have become academic. In the result, the grounds of appeal raised by the assessee are allowed. 7. In the result, appeal of the assessee is allowed. Order was pronounced in the open Court on 14/07/2026.

/- S/- Sd/- /- Sd/- Sd/- OM PRAKASH KANT PAWAN SINGH ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, Dated: 14/07/2026 Biswajit Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Mumbai; and (5) Guard file.

By Order

Assistant Registrar ITAT, Mumbai