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Income Tax Appellate Tribunal, “H” BENCH, MUMBAI
Before: SHRI ABY T. VARKEY, JM & SHRI GAGAN GOYAL, AM
O R D E R
PER ABY T. VARKEY, JM:
This is an appeal preferred by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals), Mumbai in National Faceless Appeal [NFAC] dated 22.06.2021 for the assessment year 2017-18.
At the outset, the Ld. AR of the assessee drew our attention to the fact that the assessee had received exempt income only to the tune of Rs.6,23,369/- whereas the AO has erroneously taken this exempt income as Rs.36,86,985/-, which needs to be rectified. Moreover, according to the assessee, the suo-moto disallowance made by assessee u/s 14A of the Income Tax Act 1961 (herein after the Act) was to the tune of Rs.20,000/-. However the main grievance of the assessee is that the AO has made the disallowance at Rs.36,86,985/- without recording satisfaction as required u/s 14A of the Act [refer decision of Hindustan Port Pvt. Ltd. the Hon’ble Supreme Court in the case of Maxopp Investment Ltd. Vs. CIT 402 ITR 640 (SC)]. According to the Ld. AR the lower authorities did not give proper opportunity to the assessee to show that the expenditure incurred for receiving the exempt income of Rs.6,23,369/- was only to the tune of Rs.20,000/-. Therefore, he prayed that the matter may be remanded back to either the Ld. CIT(A) or the AO.
Per contra, the Ld. DR objected to the remand. According to him, the assessee ought to have submitted all the necessary details before the AO/CIT(A) and a second innings should not be allowed to the assessee.
We have heard both the parties and perused the record. The main grievance of the assessee is against the action of the lower authorities to have made the disallowance u/s 14A without following the condition prescribed in Section 14A of the Act before making the impugned disallowance. According to the assessee it has received exempt income only to the tune of Rs.6,23,369/- whereas the disallowance has been made to the tune of Rs.36,86,985/- [erroneously noted by AO exempt income as Rs.36,86,985/- whereas it is only Rs 6,23,369] which according to him is per-se fallacious in view of the various judicial precedence on the subject. According to the assessee, the expenditure incurred for receipt of exempt income was only to the tune of Rs.20,000/- and since the assessee did not get proper opportunity before the authorities below, the assessee could not demonstrate properly before the authorities the facts pertaining on this