PRINCIPAL COMMISSIONER OF INCOME TAX-04 vs. M/S IFCI LTD

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ITA - 499 / 2022HC Delhi02 December 20223 pages
For Petitioner: VIBHOOTI MALHOTRA
AI SummaryRemanded

What did the High Court hold?

The Tribunal held that the Assessing Officer's disallowance under Section 14A was unsustainable in the absence of recorded dissatisfaction with the assessee's claim. The appeal is listed for further hearing.

What were the facts?

The assessee earned substantial dividend income and offered a suo motu disallowance. The Assessing Officer invoked Rule 8D and made a higher disallowance, which was challenged by the revenue. The Tribunal ruled against the revenue.

What were the issues?

Whether the disallowance made by the Assessing Officer under Section 14A is sustainable, and its impact on book profit computation under Section 115JB.

Which sections of the Income-tax Act were involved?

Section 14A,Section 115JB

AI-generated summary — verify with the full judgment below

ITA 499/2022 Page 1 of 3

$~32 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 499/2022

PRINCIPAL COMMISSIONER OF INCOME TAX-04 ......Appellant Through: Mr Puneet Rai, Sr. Standing Counsel with Ms Adeeba Mujahid, Adv.

versus

M/S IFCI LTD

.....Respondent Through: Mr Abhishek Maratha, Sr. Standing Counsel.

CORAM:

HON'BLE MR JUSTICE RAJIV SHAKDHER

HON'BLE MS JUSTICE TARA VITASTA GANJU

O R D E R %

02.12.2022 [Physical Hearing/Hybrid Hearing (as per request)] CM Appl.52149/2022 1. Allowed, subject to just exceptions. CM Appl.52150/2022 2. This is an application filed on behalf of the appellant seeking condonation of delay in re-filing the appeal. 2.1 According to the appellant/revenue, there is delay of 55 days. 3. For the reasons given in the application, the delay is condoned. 4. The application is disposed of in the aforesaid terms. ITA 499/2022 5. Via this appeal, challenge is laid to the order dated 08.10.2020 passed by the Income Tax Appellate Tribunal [in short “Tribunal”]. 6. The short issue which arises for consideration is: whether This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 27/03/2026 at 14:24:25

ITA 499/2022 Page 2 of 3

disallowance made by the assessing officer under Section 14A of the Income Tax Act, 1961 [in short “Act”] in relation to expenses said to have been incurred with regard to exempt income is sustainable. 7. The Tribunal has ruled against the revenue. 8. The record shows, that the respondent/assesseehad earned dividend income in the relevant Assessment Year (AY) i.e., AY 2010-2011 amounting to Rs. 63,82,22,092/-. 9. Against the said exempt dividend income, suo motu disallowance of Rs. 10,00,000/- was offered by the respondent/assessee. 10. The assessing officer, however, has invoked Rule 8D of the Act and pegged the disallowance at Rs. 5,14,64,963/-. 10.1 The assessing officer thereafter proceeded to make an addition of Rs. 5,04,64,963/- albeit after adjusting Rs. 10,00,000/- offered by the respondent/assessee as disallowance. 11. The upshot of the Tribunal reasoning is, that in the absence of dissatisfaction recorded by the assessing officer on the claim made by the respondent/assessee against exempted income, the order of the assessing officer could not be sustained. 12. In reaching this conclusion, the Tribunal has inter alia taken recourse to its own decision rendered in ITA 2062/Del/2012 dated 31.08.2020 qua AY 2008-2009. 13. Connected with the aforesaid issue, is the impact that disallowance under Section 14A of the Act would have, in the computation of book profit under Section 115JB of the Act. 14. Issue notice to respondent/assessee via all modes, including e-mail. 15. List the matter on 06.04.2023. This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 27/03/2026 at 14:24:25

ITA 499/2022 Page 3 of 3

16.

In the meanwhile, counsel for the parties will file their written submissions, not exceeding three pages each, at least five days before the next date of hearing. 17. Mr Puneet Rai, who appears on behalf of the appellant will ascertain, as to what was the outcome of the order passed by the Tribunal in AY 2008- 2009 and 2009-2010.

RAJIV SHAKDHER, J

TARA VITASTA GANJU, J

DECEMBER 2, 2022 /r

Click here to check corrigendum, if any

This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 27/03/2026 at 14:24:25

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