COMMISSIONER OF INCOME TAX DELHI-III vs. SUNRAYS PROPERTIES& INVESTMENT CO PVT LTD

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ITA/690/2011HC DelhiDLHC01055449201123 May 2012Bench: HON'BLE MR. JUSTICE SANJIV KHANNA,HON'BLE MR. JUSTICE R.V.EASWAR2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that Rule 8D of the Income Tax Rules, 1962, is not retrospective and applies only from assessment year 2008-2009 onwards. Therefore, it is not applicable to the assessment years in question. This finding is based on the Court's prior decision in Maxopp Investment Ltd. vs. CIT (2002) 247 CTR(Del) 162. In light of this established legal position, the Court found no reason to entertain the present appeals. The appeals were dismissed. No issue was expressly left undecided.

What were the facts?

The Revenue (Commissioner of Income Tax, Delhi-III) filed appeals against the order of the Income Tax Appellate Tribunal (ITAT) concerning assessment years not explicitly stated. The respondent is Sunrays Properties & Investment Co Pvt Ltd. The Assessing Officer had made a disallowance under Section 14A of the Income Tax Act, 1961. The assessee has already filed an appeal before the Appellate Authority against the Assessing Officer's action. The High Court noted that the Assessing Officer had complied with the ITAT's order by repeating the disallowance. The assessee's counsel appeared on advance notice.

What were the issues?

1. Whether Rule 8D of the Income Tax Rules, 1962, is retrospective in its application, and thus applicable to the assessment years in question, or prospective, applying only from assessment year 2008-2009 onwards? Assessee's Contention: The assessee's counsel, appearing on advance notice, stated that the Assessing Officer had already complied with the Tribunal's order by repeating the disallowance under Section 14A and that an appeal by the assessee is pending before the Appellate Authority. No specific argument on the retrospective nature of Rule 8D was recorded. Revenue's Contention: The Revenue is appealing the ITAT's order. The specific arguments of the Revenue regarding the applicability of Rule 8D were not recorded in the judgment.

Which sections of the Income-tax Act were involved?

Section 14A

AI-generated summary — verify with the full judgment below

( % $-7&8 * IN THE HIGH COTIRT OF DELHI AT NEW DELHI + TTA 690120TT + ITATOOI2OIT COMMISSIONER OF INCOME TAX DELHI-III ..... Appellant Through: Mr. S anj eev Rajpal, Advocate. VETSUS SUNRAYS PROPERTIES& INVESTMENT CO PVT LTD ..... Respondent Through: Mr.Manu K. Giri, Advocate. CORAM: I{ON'BLE MR. JUSTICE SANJIV KIIANNA HON'BLE MR. JUSTICE R.V.EASWAR ORDER Yo 23.05.2012 Leamed counsel for the respondent-assessee who appears on advance notice states that the Assessing Officer has already complied with the order . b..l- a' passed by the Tribunal ad has repeated the disallowance made under Section 14A of the Income Tax Act, 1961. He submits that the assessee has already preferred an appeal which is pending before the Appellate Authority. We notice that the question of law has abeady been answered by this Court in the case of Maxopp Investment Ltd. vs. CIT (2002) 247 CTR(Del) 162. It has been held that the Rule 8D is not retrospective and will apply from Digitally Signed By:AMULYA Signature Not Verified

q 2 ,ql assessment year 2008-2009 onwards and is not applicable to the assessment years in question. In view of the aforesaid decision, we do not see any reason to entertain the present appeals and the same are dismissed. a--(/t- SANJIV KIIANNA, J fu-.,-, R.V.EASWAR, J MAY 23,2012 Bisht

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