THE PR. COMMISSIONER OF INCOME TAX -3 vs. FEEDBACK INFRA PVT.LTD.

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ITA/276/2018HC DelhiDLHC01034386201801 May 2018Bench: HON'BLE MR. JUSTICE S. RAVINDRA BHAT,HON'BLE MR. JUSTICE A. K. CHAWLA1 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that no substantial question of law arises from the ITAT's order. The Tribunal had correctly observed that the assessee had not earned any tax-exempt income in the assessment year concerned. Relying on the ratio of this Court's judgment in Cheminvest Ltd. v. Commissioner of Income Tax [2015] 378 ITR 33 (Del), the ITAT had rightly concluded that the disallowance under Section 14A was not in accordance with law. The High Court further noted that this view has been consistently upheld in subsequent decisions. Therefore, the appeal filed by the Revenue was dismissed.

What were the facts?

The Revenue is aggrieved by an order of the Income Tax Appellate Tribunal (ITAT) which held that a disallowance made by the Assessing Officer (AO) under Section 14A of the Income Tax Act, 1961, was unjustified. The ITAT, along with the Revenue's Appellate Authority, observed that for the assessment year in question, the assessee had not derived any tax-exempt income. Consequently, the ITAT applied the ratio of this Court's judgment in Cheminvest Ltd. v. Commissioner of Income Tax and found the disallowance to be unwarranted. The High Court noted that this view has been subsequently endorsed in other decisions.

What were the issues?

1. Whether the disallowance made by the Assessing Officer under Section 14A of the Income Tax Act, 1961, was justified, considering the assessee had not earned any tax-exempt income in the relevant assessment year? (Question of law) Assessee's Contention: The judgment does not record any specific contentions made by the assessee. The ITAT's decision, which is under challenge, was based on the finding that no tax-exempt income was earned. Revenue's Contention: The Revenue is aggrieved by the ITAT's order, which found the disallowance under Section 14A to be unjustified. The Revenue's appeal to the High Court implies a disagreement with the ITAT's conclusion.

Which sections of the Income-tax Act were involved?

Section 14A

AI-generated summary — verify with the full judgment below

$~6 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 276/2018

THE PR. COMMISSIONER OF INCOME TAX -3..... Appellant Through Mr.Ruchir Bhatia, Sr.Standing Counsel.

versus

FEEDBACK INFRA PVT.LTD.

..... Respondent

Through Mr.Aniket D.Agarwal, Adv.

CORAM: HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MR. JUSTICE A. K. CHAWLA

O R D E R %

01.05.2018

In the present appeal, the Revenue is aggrieved by the order of the ITAT which held that the disallowance made by the Revenue Authorities (AO) under Section 14A was unjustified and not in accordance with law. The Revenue’s Appellate Authority and the Tribunal noticed that in given assessment year concerning to the assessee, as a matter of fact, no tax exempt income had been derived so as to attract Section 14A. By applying the ratio of the judgment of this Court in Cheminvest Ltd. v. Commissioner of Income Tax [2015] 378 ITR 33 (Del), the Tribunal held that the disallowance was not justified. This Court notices that this view has been subsequently endorsed in other decisions as well. Therefore, no question of law arises and appeal is accordingly dismissed.

S. RAVINDRA BHAT, J

A. K. CHAWLA, J MAY 01, 2018/ndn

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