PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL)-3 vs. BHILWARA ENERGY LTD

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ITA/412/2023HC DelhiDLHC01002034202228 July 2023Bench: HON'BLE MR. JUSTICE RAJIV SHAKDHER,HON'BLE MR. JUSTICE GIRISH KATHPALIA4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that no substantial question of law arose for consideration in the appeals. The Court noted that the issue was covered by previous judgments, specifically citing *Cheminvest Limited v. Commissioner of Income Tax-VI*, *Commissioner of Income-tax, Central 1, Chennai v. Chettinad Logistics (P.) Ltd.*, and *Principal Commissioner of Income Tax Delhi 4 v. IL And FS Energy Development Co Ltd.*. The Court highlighted that a Special Leave Petition (SLP) filed against the *Chettinad Logistics* judgment was dismissed by the Supreme Court on grounds of delay as well as on merits. Given this precedent, the Court found no substantial question of law to adjudicate. Consequently, the appeals filed by the revenue were dismissed. No issue was expressly left undecided.

What were the facts?

The appellant, Principal Commissioner of Income Tax (Central)-3, filed four appeals (ITAs 409/2023, 410/2023, 411/2023, and 412/2023) against the respondent, Bhilwara Energy Ltd. These appeals concerned Assessment Years (AYs) 2014-15, 2015-16, 2017-18, and 2016-17, respectively. The appeals challenged a common order dated August 2, 2022, passed by the Income Tax Appellate Tribunal (Tribunal). The revenue sought condonation of delays in filing these appeals, ranging from 2 days to 11 days for initial filing and 118 days for re-filing. The respondent did not appear before the High Court.

What were the issues?

1. Whether the Tribunal was correct in sustaining the deletion of disallowance under Section 14A of the Income Tax Act, 1961, when no income exempt from tax was earned during the relevant period (question of law)? The appellant's contention was that the Tribunal erred in deleting the disallowance under Section 14A, arguing that the deletion was incorrect despite no exempt income being earned. The appellant relied on the judgment in *Principal Commissioner of Income Tax Delhi 4 v. IL And FS Energy Development Co Ltd.* (dated 30.05.2023 in ITA Nos. 316/2023 and 317/2023). The appellant also referred to *Cheminvest Limited v. Commissioner of Income Tax-VI* (dated 02.09.2015 in ITA 749/2014) and *Commissioner of Income-tax, Central 1, Chennai v. Chettinad Logistics (P.) Ltd.* ([2017] 80 taxmann.com 221 (Madras)). The revenue noted that a Special Leave Petition (SLP) against the *Chettinad Logistics* judgment was dismissed by the Supreme Court on delay and merits. The respondent did not present any arguments.

Which sections of the Income-tax Act were involved?

Section 14A

AI-generated summary — verify with the full judgment below

$~34 to 37 * IN THE HIGH COURT OF DELHI AT NEW DELHI %

Date of decision:28.07.2023 + ITAs 409/2023, 410/2023, 411/2023 & 412/2023

PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL)-3 ..... Appellant Through: Mr Abhishek Maratha, Sr Standing Counsel with Mr Akshat Singh, Jr Standing Counsel.

versus

BHILWARA ENERGY LTD

..... Respondent

Through: None.

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 APPL. 38119/2023 in ITA 409/2023 CM APPL. 38122/2023 in ITA 410/2023 CM APPL. 38125/2023 in ITA 411/2023 CM APPL. 38128/2023 in ITA 412/2023

1.

Allowed, subject to just exceptions. CM APPL. 38117/2023 in ITA 409/2023 CM APPL. 38120/2023 in ITA 410/2023 CM APPL. 38123/2023 in ITA 411/2023 CM APPL. 38126/2023 in ITA 412/2023 [Application filed on behalf of the appellant/revenue seeking condonation of delay of 11 days in filing Digitally Signed By:NEELAM SHARMA Signing Date:04.08.2023 11:38:08 Signature Not Verified ITAs 409/2023 & 411/2023 and 02 days in filing ITAs 410/2023 & 412/2023] 2. These are the applications moved on behalf of the appellant/revenue seeking condonation of delay in filing the appeal. 2.1 According to the appellant/revenue, there is a delay of 2 days in filing ITAs 410/2023 & 412/2023, while in ITAs 409/2023 & 411/2023, there is a delay of 11 days. 3. For the reasons, mentioned in the applications, the delay is condoned. 4. The applications are disposed of, in the aforesaid terms. CM APPL. 38118/2023 in ITA 409/2023 CM APPL. 38121/2023 in ITA 410/2023 CM APPL. 38124/2023 in ITA 411/2023 CM APPL. 38127/2023 in ITA 412/2023 [Applications filed on behalf of the appellant/revenue seeking condonation of delay of 118 days in re- filing] 5. These are the applications moved on behalf of the appellant/revenue seeking condonation of delay in re-filing the appeal. 5.1 According to the appellant/revenue, there is a delay of 118 days. 6. For the reasons given in the applications, the delay is condoned. 7. The applications are disposed of, in the aforesaid terms. ITAs 409/2023, 410/2023, 411/2023 & 412/2023

8.

These appeals concern Assessment Years (AYs) 2014-15 (ITA 409/2023), 2015-16 (ITA 410/2023), 2017-18 (ITA 411/2023) and 2016-17 (ITA 412/2023). 9. Via these appeals, the appellant/revenue seeks to assail the common order of the Income Tax Appellate Tribunal [in short, “Tribunal”] dated Digitally Signed By:NEELAM SHARMA Signing Date:04.08.2023 11:38:08 Signature Not Verified 02.08.2022. 10. Mr Abhishek Maratha, senior standing counsel, who appears on behalf of the appellant/revenue, submits that the issue that arises for consideration is whether the Tribunal was right in sustaining the deletion of disallowance under Section 14A of the Income Tax Act, 1961 [in short, “Act”] in view of the fact that no income exempt from tax had been earned during the relevant period. 11. According to us, the issue is covered by the following decisions: (i) Judgement dated 02.09.2015 passed in ITA 749/2014, titled Cheminvest Limited v. Commissioner of Income Tax-VI. (ii) Commissioner of Income-tax, Central 1, Chennai v. Chettinad Logistics (P.) Ltd. [2017] 80 taxmann.com 221 (Madras). (iii) Order dated 30.05.2023 passed in ITA Nos. 316/2023 and 317/2023, titled Principal Commissioner of Income Tax Delhi 4 v. IL And FS Energy Development Co Ltd. 12. Insofar as Chettinad Logistics (P.) Ltd. is concerned, one of us [i.e., Rajiv Shakdher, J.] was a member of the Bench. 12.1 Mr Maratha does not dispute that a Special Leave Petition (SLP) was preferred against the said judgment, which was dismissed via order dated 02.07.2018; which is reported in [2018] 95 taxmann.com 250 (SC). The order passed by Supreme Court reads as follows: “1. The Special Leave petition is dismissed on the ground of delay as well as on merits.”

13.

Therefore, according to us, no substantial question of law arises for our consideration in the above-captioned appeals. Digitally Signed By:NEELAM SHARMA Signing Date:04.08.2023 11:38:08 Signature Not Verified

14.

The appeals are, accordingly, dismissed.

(RAJIV SHAKDHER) JUDGE

(GIRISH KATHPALIA) JUDGE

JULY 28, 2023 v

Digitally Signed By:NEELAM SHARMA Signing Date:04.08.2023 11:38:08 Signature Not Verified

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