PRINCIPAL COMMISSIONER OF INCOME TAX - 4 DELHI vs. M/S MODERN INFO TECHNOLOGY PVT LTD

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ITA/250/2023HC DelhiDLHC01001877202203 May 2023Bench: HON'BLE MR. JUSTICE RAJIV SHAKDHER,HON'BLE MR. JUSTICE GIRISH KATHPALIA3 pages
AI SummaryDismissed

What did the High Court hold?

The Delhi High Court condoned the delay in filing and re-filing the appeal. However, the Court noted that the issue concerning the deletion of disallowance under Section 14A, where no claim for exempt income was made by the assessee, was covered by previous judgments of the Delhi High Court in ITA 749/2014 (Cheminvest Limited) and the Madras High Court in Commissioner of Income-tax, Central 1, Chennai v. Chettinad Logistics (P.) Ltd. The Court specifically highlighted that a Special Leave Petition against the Chettinad Logistics judgment was dismissed by the Supreme Court on both delay and merits. Consequently, the High Court held that no substantial question of law arose for its consideration. The appeal was accordingly closed. The Court also placed on record the fact that SLPs against other judgments on similar issues were pending before the Supreme Court.

What were the facts?

The appellant, Principal Commissioner of Income Tax - 4 Delhi (Revenue), sought to appeal an order dated September 27, 2021, passed by the Income Tax Appellate Tribunal (Tribunal). The appeal concerned Assessment Year 2014-2015 and involved a dispute of Rs. 3,12,87,693/-. The Revenue's grievance was the deletion of a disallowance sustained by the Tribunal. The Tribunal had held that the disallowance under Section 14A was not sustainable as the respondent-assessee had not made any claim for exempt income. The Revenue filed the appeal with a significant delay, seeking condonation.

What were the issues?

1. Whether the deletion of disallowance under Section 14A of the Income Tax Act, 1961, by the Tribunal is sustainable in law, considering the assessee did not claim exempt income? (Mixed question of law and fact, concerning Section 14A). Assessee's Contention: The respondent-assessee, through their counsel, did not oppose the Revenue's applications for condonation of delay. The judgment does not record specific arguments made by the assessee on the merits of the appeal. Revenue's Contention: The appellant-revenue contended that the Tribunal erred in deleting the disallowance sustained under Section 14A, amounting to Rs. 3,12,87,693/-, as the assessee had not made any claim for exempt income. The Revenue relied on the judgment of a coordinate bench of the Delhi High Court in ITA 749/2014 (Cheminvest Limited v. Commissioner of Income Tax-VI) and the Madras High Court judgment in Commissioner of Income-tax, Central 1, Chennai v. Chettinad Logistics (P.) Ltd. The Revenue also noted that a Special Leave Petition against the Chettinad Logistics judgment was dismissed by the Supreme Court on delay and merits.

Which sections of the Income-tax Act were involved?

Section 14A

AI-generated summary — verify with the full judgment below

ITA 250/2023 Page 1 of 3

$~31 * IN THE HIGH COURT OF DELHI AT NEW DELHI %

Date of decision: 03.05.2023

+ ITA 250/2023

PRINCIPAL COMMISSIONER OF INCOME TAX - 4 DELHI

..... Appellant Through: Mr Abhishek Maratha, Sr. Standing Counsel with Mr Akshat Singh, Jr. Standing Counsel.

versus

M/S MODERN INFO TECHNOLOGY PVT LTD..... Respondent Through: Mr M.P. Rastogi with Mr Manu K. Giri, Advocates.

CORAM:

HON'BLE MR JUSTICE RAJIV SHAKDHER

HON'BLE MR JUSTICE GIRISH KATHPALIA [Physical Hearing/Hybrid Hearing (as per request)] RAJIV SHAKDHER, J.: (ORAL)

CM No.22364/2023 CM No.22365/2023 1. These are applications filed on behalf of the applicant/appellant/revenue seeking condonation of delay in filing and re- filing the appeal. 1.1 According to the applicant/appellant/revenue, there is a delay of 105 days in filing and 125 days in re-filing the appeal. 2. Mr M.P. Rastogi, Advocate who appears on behalf of the respondent/assessee, says that he does not oppose the prayers made in the Signed By:VIPIN KUMAR RAI Signing Date:31.05.2023 13:14:02 Signature Not Verified

ITA 250/2023 Page 2 of 3

applications. 3. Accordingly, the prayers made therein are allowed. 4. The applications are disposed of in the aforesaid terms. ITA 250/2023 5. This appeal concerns Assessment Year (AY) 2014-2015. 6. The appellant/revenue seeks to assail the order dated 27.09.2021 passed by the Income Tax Appellate Tribunal [in short, “Tribunal”]. The only grievance of the appellant/revenue concerns the deletion of disallowance sustained by the Tribunal. The amount involved is Rs.3,12,87,693/-. According to the Tribunal, the respondent/assessee has not made any claim qua exempt income, and therefore, disallowance under Section 14A of the Act was not sustainable. 7. There is no dispute, that this issue is covered by a judgment of the coordinate bench of this Court dated 02.09.2015 passed in ITA 749/2014 titled Cheminvest Limited v. Commissioner of Income Tax-VI and the judgment passed in Commissioner of Income-tax, Central 1, Chennai v. Chettinad Logistics (P.) Ltd. [2017] 80 taxmann.com 221 (Madras). 8. To be noted, one of us i.e., Rajiv Shakdher, J., was part of the bench in Commissioner of Income-tax, Central 1, Chennai v. Chettinad Logistics (P.) Ltd. 9. Counsel for the appellant/revenue does not dispute the fact that special leave petition preferred against the said judgment was dismissed by the Supreme Court via order dated 02.07.2018 which is reported as [2018] 95 taxmann.com 250 (SC). 9.1 The order of the Supreme Court reads as follows: Signed By:VIPIN KUMAR RAI Signing Date:31.05.2023 13:14:02 Signature Not Verified

ITA 250/2023 Page 3 of 3

“1. The Special Leave petition is dismissed on the ground of delay as well as on merits.”

10.

In these circumstances, no substantial question of law arises for our consideration. 11. It is, however, brought to our notice by counsel for the appellant/revenue that against other judgments, special leave petitions have been filed, which are pending adjudication by the Supreme Court. This fact is placed on record. 12. The appeal is, accordingly, closed.

RAJIV SHAKDHER, J

GIRISH KATHPALIA, J

MAY 3, 2023/ tr

Signed By:VIPIN KUMAR RAI Signing Date:31.05.2023 13:14:02 Signature Not Verified

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