DICE DISTRICTS INDIA PRIVATE LIMITED ,MUMBAI vs. ITO WARD 6(2)(1), MUMBAI

PER OM PRAKASH KANT, AM

This appeal has been preferred by the assessee against order dated 27.03.2025 passed by the Ld. Commissioner of Income-tax
(Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld.
CIT(A)’] for assessment year 2018-19, raising following grounds:
1 The Ld. CIT(A) erred in confirming the action of the Ld
Assessing Officer in making disallowance of Rs.21,94,223/- u/s. 14A of the Act.

2 The Ld. AO of the Act.
3
The Ld proceedings u
2. Briefly stated, t engaged in the activi
For the relevant ass income on 10.10.201
return was selected provisions of the Inc
"the Act") were issued assessment proceed assessee had made i equity shares of var disallowance under assessee on the grou during the year u rejecting the said con
14A of the Act are ap is earned. Invoking
(hereinafter referred proceeded to compu assessee carried the the disallowance mad
CBDT Circular No.
Dice D
ITA

O has erred in levying interest u/s 234B/
.
AO has erred in initiating p under the Act the facts of the case are that ity of making investments in gr sessment year, the assessee file
18, declaring a total loss of ₹19
for scrutiny, and statutory no come-tax Act, 1961 (hereinafte d and duly complied with. In th dings, the Assessing Officer n investments aggregating to ₹59
rious private limited companie
Section 14A of the Act was und that no exempt income ha under consideration. The Ass ntention and held that the provi pplicable even in cases where no g Rule 8D of the Income-ta d to as "the Rules"), the As ute and disallow a sum of ₹91
matter in appeal. The learned de by the Assessing Officer, pla
5/2014, which, according istricts (India) Pvt. Ltd.
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A No. 3506/MUM/2025
/ 234C penalty the assessee is roup companies.
ed its return of 9,29,974/-. The otices under the r referred to as he course of the noted that the 9,96,61,550/- in es. However, no s made by the ad been earned sessing Officer, isions of Section o exempt income ax Rules, 1962
ssessing Officer
1,05,193/-. The d [CIT(A) upheld acing reliance on to the CIT(A), supported the view made irrespective o relevant year.
3. We have heard t material available on on behalf of the ass earned by the asses therefore, the invoca unsustainable. In su on the judgment of Industries Ltd. (ITA N
Delhi High Court in C
(Del)]. Per contra, t section 14A of the A even in no exempted
Said explanation is re
“[Explanation clarified tha contained in apply and s case where t under this A received du assessment
Dice D
ITA that disallowance under Secti of whether exempt income is the rival submissions and carefu n record. Before us, learned cou sessee submitted that no exem see during the relevant assess ation of Section 14A of the A upport of this proposition, relia the Hon’ble Bombay High Cou
No. 51 of 2016) and the judgmen
Chem Investment Ltd. v. CIT [(20
he ld DR referred to Explana
Act to support that section 14A income, though it was inserted eproduced as under:
n.-For the removal of doubts, it is at notwithstanding anything to the n this Act, the provisions of this sect shall be deemed to have always app the income, not forming part of the tota
Act, has not accrued or arisen or has uring the previous year relevant year and the expenditure has been istricts (India) Pvt. Ltd.
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A No. 3506/MUM/2025
ion 14A can be earned in the ully perused the unsel appearing mpt income was sment year, and Act was legally ance was placed urt in Ballarpur nt of the Hon’ble
015) 378 ITR 33
ation below the A is application w.e.f. 1.4.2022. s hereby contrary tion shall plied in a al income not been t to an incurred during the s not forming p
3.1 Learned counsel
Hon’ble Delhi High C
141 taxmann.com 2
examining the scope
2022 to Section 14A amendment is pros assessment years pre decision is reproduce
“8. Consequ amendment doubts" can where such law as it ear
3.2 In view of the for of the Hon’ble Delhi
(supra), we are of the under consideration—
disallowance under absence of any exem the order passed b disallowance made by Dice D
ITA said previous year in relation to suc part of the total income.]”
also drew our attention to the j
Court in Era Infrastructure (Ind
289 (Del)], wherein the Hon’b of the Explanation inserted by t
A of the Act, categorically held spective in nature and would eceding A.Y. 2023–24. The relev ed as under:
uently, this Court is of the view th of section 14A, which is "for remo nnot be presumed to be retrospective language is used, if it alters or chang rlier stood.”
regoing and respectfully followin i High Court in Era Infrastruc e considered view that for the a —which admittedly precedes A.
Section 14A of the Act is wa pt income earned by the assess by the learned CIT(A) is set y the Assessing Officer under S istricts (India) Pvt. Ltd.
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A No. 3506/MUM/2025
h income judgment of the dia) Ltd. [(2022) le Court, while the Finance Act, d that the said d not apply to vant part of the hat the oval of e even ges the ng the judgment ture (India) Ltd.
assessment year
Y. 2023–24—no arranted in the see. Accordingly, aside and the Section 14A read with Rule 8D is direc by the assessee are a 4. In the result, th
Order pronoun (RAHUL CHA
JUDICIAL M
Mumbai;
Dated: 30/07/2025
Rahul Sharma, Sr. P.S.

Copy of the Order forward
1. The Appellant
2. The Respondent.
3. CIT
4. DR, ITAT, Mumbai
5. Guard file.

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Dice D
ITA cted to be deleted. The grounds accordingly allowed.
he appeal of the assessee is allow ced in the open Court on 30/0
/-
S
AUDHARY)
(OM PRAK
MEMBER
ACCOUNTA ded to :

BY ORDER

(Assistant Re

ITAT, Mu istricts (India) Pvt. Ltd.
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A No. 3506/MUM/2025
of appeal raised wed.
07/2025. KASH KANT)
ANT MEMBER
R, gistrar) umbai