PRINCIPAL CMMISSIONER OF INCOME TAX, CENTRAL-3, DELHI vs. M/S MALANA POWER COMPANY LTD

PDF · subscribers
ITA/545/2025HC DelhiDLHC01075913202219 January 2026Bench: HON'BLE MR. JUSTICE VINOD KUMAR,HON'BLE MR. JUSTICE DINESH MEHTA2 pages
AI SummaryDismissed

What did the High Court hold?

The Delhi High Court dismissed the appeals filed by the Revenue. The Court noted that the issue concerning whether the disallowance under Section 14A can exceed the amount of dividend received by the assessee had been conclusively decided by previous judgments of the same Court. Specifically, the Court referred to its own judgment in the case of Principal Commissioner of Income-tax Central-1 versus R.J. Corp. Ltd. [2025] 181 taxmann.com 749 (Delhi). The Revenue's counsel was unable to counter this legal position. Consequently, the appeals, along with pending applications, were dismissed in light of the established precedent. The ratio decidendi is that disallowance under Section 14A cannot exceed the dividend income, as per prior High Court rulings.

What were the facts?

The appeals were filed by the Principal Commissioner of Income Tax (Revenue) against the respondents, Bhilwara Energy Ltd. and Malana Power Company Ltd. (Assessees). The assessment years are not explicitly stated in the provided text. The appeals challenge orders passed by the Income Tax Appellate Tribunal (ITAT), though the specific ITAT order or action is not detailed. The core dispute revolves around the disallowance under Section 14A of the Income Tax Act, 1961. The procedural history indicates that the Revenue has appealed the ITAT's decision to the High Court. The High Court noted that the issue had been previously decided by this Court in other judgments.

What were the issues?

1. Whether the disallowance under Section 14A of the Income Tax Act, 1961, can exceed the amount of dividend received by the assessee? (Question of law) Assessee's Contention: The learned Counsel for the respondents (Assessees) submitted that this issue has already been decided by multiple judgments of the Delhi High Court, specifically citing the case of Principal Commissioner of Income-tax Central-1 versus R.J. Corp. Ltd. [2025] 181 taxmann.com 749 (Delhi). Revenue's Contention: The learned counsel for the appellants (Revenue) could not dispute the position of facts and law as presented by the assessees, despite attempts.

Which sections of the Income-tax Act were involved?

Section 14A

AI-generated summary — verify with the full judgment below

$~17, 19 & 20 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 366/2025 and CM APPL. 54343/2025, CM APPL. 54344/2025

PRINCIPAL COMMISSIONER OF INCOME TAX-1 DELHI

.....Appellant Through: Mr. Abhishek Maratha, SSC with Mr. Apoorv Agarwal, JSC.

versus

BHILWARA ENERGY LTD

.....Respondent Through: Mr. Satyen Sethi, Ms. Arta Trana Panda and Mr. Gargi Sethee, Advocates.

+ ITA 545/2025 and CM APPL. 66717/2025 PRINCIPAL CMMISSIONER OF INCOME TAX, CENTRAL-3, DELHI

.....Appellant Through: Mr. Abhishek Maratha, SSC with Mr. Apoorv Agarwal, JSC.

versus

M/S MALANA POWER COMPANY LTD .....Respondent Through: Mr. Satyen Sethi, Ms. Arta Trana Panda and Mr. Gargi Sethee, Advocates.

+ ITA 547/2025 and CM APPL. 66813/2025, CM APPL. 66814/2025

PCIT, CENTRAL-3

.....Appellant Through: Mr. Abhishek Maratha, SSC with Mr. Apoorv Agarwal, JSC.

versus

MALANA POWER COMPANY LTD.

.....Respondent Through: Mr. Satyen Sethi, Ms. Arta Trana 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 29/05/2026 at 16:15:04

Panda and Mr. Gargi Sethee, Advocates. CORAM:

HON'BLE MR. JUSTICE DINESH MEHTA

HON'BLE MR. JUSTICE VINOD KUMAR

O R D E R %

19.01.2026 1. Issue involve in the present appeals is as under:- “Whether disallowance under Section 14A can exceed the amount of dividend received by assessee?” 2. Mr. Satyen Sethi, learned Counsel appearing for the respondents, at the outset, submitted that the issue involved in the present appeals have already been decided by a number of judgments of this Court including Judgment rendered in the case of Principal Commissioner of Income-tax Central-1 versus R.J. Corp. Ltd. [2025] 181 taxmann.com749 (Delhi). 3. Mr. Agarwal, learned counsel for the appellants despite his attempts could not dispute the aforesaid position of facts and law. 4. Hence, the captioned appeals, with pending applications are dismissed.

DINESH MEHTA, J.

VINOD KUMAR, J. JANUARY 19, 2026/MR 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 29/05/2026 at 16:15:04

More judgments on Section 14A

All 15,875 judgments and leading authorities on Section 14A →

Recent GST High Court judgments

Search GST case law →