INOX INFRASTRUCTURE LIMITED,DELHI vs. ASSESSMENT UNIT, INCOME TAX, NEW DELHI

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “A”, DELHI

BEFORE SH. SUDHIR KUMAR, JUDICIAL MEMBER AND SH. MANISH AGARWAL, ACCOUNTANT MEMBER

ITA No.732/DEL/2026 Assessment Year- 2017-18

Inox Infrastructure Limited Vs. Assessment Unit Income 612-618, 6th Floor Narain Tax, New Delhi Manzali, 23 Barakhambha Road, New Delhi 110001 PAN No.AABCI6543A (APPELLANT) (RESPONDENT)

Appellant by Sh. Sanjeev Jain, CA Respondent by Sh. Ajay Kumar Arora, Sr. DR

Date of hearing: 05/05/2026 Date of Pronouncement: 22/05/2026 ORDER PER SUDHIR KUMAR, JUDICIAL MEMBER: This appeal by the assessee is directed against the order of the Commissioner of Income Tax (Appeals), Delhi [hereinafter referred to as “CIT(A)”] vide order dated 17.11.2025. 2. The assessee has raised the following grounds in appeal:- 1. On the facts and in the circumstances of the case and in law the learned Commissioner of Income Tax(Appeals) [CIT(A)] erred in confirming the penalty of Rs.6,23,520/- levied by the Assessing Officer u/s 270A of the Income Tax Act, 1961 which is unjustified and contrary to the provisions of law.

income u/s 139 of the Income Tax Act, 1961(in short “the Act”)

for A.Y. 2017-18 on 04-10-2017, declaring total income of Rs.

31,28,140/-. Subsequently the case of the assessee was

selected for Limited Scrutiny under CASS. The Assessing Officer

completed the assessment after making the additions of

Rs.9,44,729/- on account of disallowance under section 14A of

the Act read with Rule 8D of the IT Rules, 1962 and assessed

the total income at Rs. 40,72,870/-. Penalty proceedings were

also initiated against the assessee. Aggrieved the order the

assessee preferred the appeal before the Ld. CIT(A), which was

partly allowed. The Ld. CIT(A) has observed in his order as

under:

“4.7 It is clear that the appellant has not been able to clarify

its claims regarding the expenditure claimed by it, and the

contentions put forward by it are not completely valid.

Despite this, the AO is advised to ensure that the

disallowance u/s 14A r.w.r. 8D is calculated accurately and

in accordance with the Proviso to the Rule 8D, wherein it has

been clarified that the disallowance shall not exceed the

total expenses of the appellant for the year.”

levied the penalty of Rs.6,23,520/-. Aggrieved the order of the

Assessing Officer the Assessee filed the appeal before the Ld.

CIT(A), who dismissed the appeal of the assessee. Being

aggrieved the order of the Ld. CIT(A), the assessee is in appeal

before the Tribunal.

under reporting of income by miss reporting income of

Rs.9,44,729/- because the assessee has claimed the

disallowance under 8D of the Income Tax Rules, 1962 which

cannot exceed the total expenditure claimed by the assessee. He

also submitted that the Ld. CIT(A) has directed the Assessing

Officer to ensure that the disallowance to be restricted to the

total expenditure incurred by the assessee during the year in

accordance with the proviso to Rule 8D. He further submitted

that assessee has offered and worked out the disallowance

under section 14A as per rule 8D and disallowance made 1% of

the average investment i.e. Rs. 32,00,000/-

have heard both the parties and gone through the material

available on record. It is evident from the records that the

appeal of the assessee was partly allowed by the Ld. CIT(A) and

the Ld. CIT(A) has directed the AO to ensure that the

disallowance be restricted to the total expenditure. The

disallowance be recalculated by the Assessing Officer, therefore

the penalty levied by the Assessing Officer deserve to be

deleted, and thus, we delete the same.

Order pronounced in the open court on 22.05.2026.

Sd/- Sd/-

(MANISH AGARWAL) (SUDHIR KUMAR) ACCOUNTANT MEMBER (JUDICIAL MEMBER) SR BHATNAGGAR Date: 22.05.2026 Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) ` 5. DR: ITAT ASSISTANT REGISTRAR ITAT DELHI