Section 253(3) of the Income Tax Act

Income-tax Act, 2025: s.362

Section 253(3) falls under section 253 of the Income-tax Act, 1961, which corresponds to section 362 (Appeals to Appellate Tribunal) of the Income-tax Act, 2025.

Read section 362 of the 2025 Act

Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.

The decision most relied on for Section 253(3) is PCIT v. IL&FS Energy Development Company Ltd. (84 Taxmann.com 186), cited in 255 of the 455 judgments on BharatTax that turn on this section.

Leading authorities on Section 253(3)

PCIT v. IL&FS Energy Development Company Ltd.
84 Taxmann.com 186 · 2017 · High Court
255
citing judgments

Disallowance under Section 14A of the Income-tax Act, 1961 is not permissible where the assessee has not earned any exempt income during the relevant assessment year. A CBDT Circular cannot override the express provisions of Section 14A read with Rule 8D to mandate such a disallowance.

CIT v. Holcim India Pvt. Ltd.
272 CTR 282 · 2014 · High Court
128
citing judgments

No disallowance under Section 14A can be made when no exempt income has been earned by the assessee, and investments made for business purposes in subsidiaries do not warrant disallowance under Section 14A, even if no dividend income is earned.

CIT v. Sitex Industries Ltd.
82 Taxmann.com 171 · 2017 · High Court
117
citing judgments

No disallowance for investments made out of surplus funds can be made if tax-free dividends are earned on such investments.

PCIT v. Sintex Industries Limited
93 Taxmann.com 24 · 2018 · Supreme Court
89
citing judgments

When an assessee has sufficient own or surplus non-interest-bearing funds to cover investments yielding exempt income, no disallowance of expenditure under Section 14A is warranted, and Rule 8D for estimating such expenditure does not apply.

Azadi Bachao Andolan v. Union of India
252 ITR 471 · 2001 · High Court
57
citing judgments

A penalty under sections like 271D or 271E is not automatically imposed if the assessee proves there was a reasonable cause for the failure. The interpretation of 'reasonable cause' is that which would prevent a person of average intelligence and ordinary prudence from acting negligently or in bad faith.

CIT v. UTI Bank Ltd.
142 Taxmann.com 136 · 2022 · Supreme Court
55
citing judgments

When an assessee has mixed funds, investments yielding tax-free income are presumed to be made from interest-free funds, thereby preventing disallowance of interest expenditure under Section 14A.

Pr. CIT v. Avantha Realty Ltd.
164 Taxmann.com 376 · 2024 · High Court
35
citing judgments

Amendments made to Section 14A by the Finance Act, 2022, inserting a non-obstante clause and an explanation, are prospective from April 1, 2022, and cannot be applied retrospectively. Further, where no exempt income is earned, Section 14A read with Rule 8D cannot be applied.

CIT v. Shivam Motors
272 CTR 277 · 2014 · High Court
32
citing judgments

Disallowance under Section 14A cannot be made if the assessee has not earned any exempt income during the relevant assessment year.

448 ITR 674 (Delhi and Pr.CIT v. Oil Industry Development Board
103 Taxmann.com 325 · 2019 · High Court
25
citing judgments

Disallowance under section 14A of the Income-tax Act is not permissible if the assessee has not earned any exempt income in the relevant assessment year. This position is affirmed by the dismissal of a Special Leave Petition by the Supreme Court.

289 (Delhi), Williamson Financial Services Ltd. v. CIT
166 Taxmann.com 607 · 2024 · Reported
25
citing judgments

The explanation inserted to Section 14A of the Income Tax Act, 1961, by the Finance Act, 2022, is prospective in nature and not retrospective.

Judgments on Section 253(3)

Nirma Chemical Works Pvt. Ltd., Ahmedabad vs. The Dy.CIT, Circle-3(1)(1), Ahmedabad

In the result, the appeal of the assessee is treated as allowed for statistical purposes

ITA 487/AHD/2023[2013-14]Status: HeardITAT Ahmedabad24 Jan 2024AY 2013-14

Bench: Shri Ramit Kochar & Ms. Suchitra Kambleassessment Year : 2013-14 Nirma Chemical Works Pvt. The Dy. Commissioner Of Income- Ltd. V. Tax Nirma House Circle-3(1)(1) Ashram Road, Ahmedabad Near Income Tax Circle Gujarat Ahmedabad-380 009 Gujarat Pan: Aaacn 5353 L अपीलाथ" अपीलाथ"/ (Appellant) अपीलाथ" अपीलाथ" "" य "" यथ" "" य "" य थ" थ"/ (Respondent) थ" Assessee By : Shri Hemanshu Shah, Ca Revenue By : Shri Atul Pandey, Sr.Dr सुनवाई क" तारीख/Date Of Hearing : 18/01/2024 & 23.01.2024 घोषणा क" तारीख /Date Of Pronouncement: 23/01/2024 आदेश/O R D E R आदेश आदेश आदेश Per Coram: This Appeal Filed By Assessee Is Directed Against The Appellate Order Dated 19/05/2022 Passed By Ld. Commissioner Of Income-Tax (Appeals), National Faceless Appeal Centre, Delhi [“Cit(A)” In Short] Under Section 250 Of The Income Tax Act, 1961 (Hereinafter Called “The Act”) For Assessment Year 2013-14 (Din & Order No.Itba/ Nfac/S/250/2022- 23/1043081956(1)), The Appellate Proceedings Have Arisen Before Ld.Cit(A) From Rectification Order Dated 16/02/2022 Passed By Ld. Assessing Officer(Hereinafter Called “The Ao”) U/S 154 Of The 1961 Act (Din & Order Nirma Chemical Works Pvt. Ltd. V. Dcit Ay 2013-14

For Appellant: Shri Hemanshu Shah, CAFor Respondent: Shri Atul Pandey, Sr.DR
Section 143(3)Section 154Section 244ASection 250Section 253(6)(c)Section 253(6)(d)

Basil International Limited, Kolkata vs. DCIT, Central Circle - Xxii, Kolkata

In the result, appeal of the assessee is dismissed

ITSSA 44/KOL/2023[2010-11]Status: DisposedITAT Kolkata21 Dec 2023AY 2010-11

Bench: Dr. Manish Borad, Hon’Ble & Shri Sonjoy Sarma, Hon’Blei.T.(Ss).A 44/Kol/2023 Assessment Year: 2010-11 Basil International Limited Dy. Commissioner Of Income Tax, 79A, P.C. Sorkar Sarani Vs Central Circle –Xxii, Kolkata 1St Floor Kolkata - 700019 [Pan: Aaccb0938K] अपीलाथ"/ (Appellant) "" यथ"/ (Respondent) Assessee By : None Revenue By : Shri Abhijit Kundu, Cit, D/R सुनवाई क" तारीख/Date Of Hearing : 22/11/2023 घोषणा क" तारीख /Date Of Pronouncement: 21/12/2023 आदेश/O R D E R Per Dr. Manish Borad: The Above Captioned Appeal Is Directed At The Instance Of The Assessee Against The Order Of The Learned Commissioner Of Income Tax (Appeals), Kolkata – 20, Dt. 29/12/2022, (Hereinafter The “Ld. Cit(A)”), Passed U/S 250 Of The Income Tax Act, 1961 (“The Act”) For The Assessment Year 2011-12. 2. At The Outset, We Find That The Neither The Assessee Nor His Authorised Representative Has Appeared On The Date Of Hearing Of Its Appeal Fixed On 25/07/2023, 03/10/2023, 11/10/2023 & Today. Notices Have Been Sent Through Rpad As Well As E-Mails But To No Effect. The Appeal Is Also Time Barred By 25 Days But No Condonation Petition Has Been Placed On Record. Under These Circumstances, We Are Of The Opinion That Since There Is A Violation Of Section 253(3) Of The Act

For Appellant: NoneFor Respondent: Shri Abhijit Kundu, CIT, D/R
Section 250Section 253(3)

Shri Javed Ali Pradhan, Raipur (Cg) vs. The Dy. Commissioner of Income Tax 1(1), Raipur (Cg)

In the result, all the appeals filed by the assessees stands dismissed in terms of our observations hereinabove

ITA 301/BIL/2016[2006-07]Status: DisposedITAT Raipur09 Aug 2023AY 2006-07

Bench: Shri Ravish Sood & Shri Arun Khodpiaआयकर अपील सं./Ita Nos.294 & 295/Rpr/2016 निर्धारण वर्ष /Assessment Years: 2010-11 & 2011-12 V. Smt. Fazila Pradhan, The Dy. Commissioner – Opp. Old Holy Heart School, Of Income Tax-1(1), Alina House, Raipur (C.G.) Central Revenue Building, Civil Lines, Raipur (C.G.). [Pan: Akppp 6380 B] (अपीलार्थीर्थी/Appellant) (प्रत्यर्थी/Respondent) आयकर अपील सं./Ita Nos.297 To 299, 300 & 301/Rpr/2016 निर्धारण वर्ष /Assessment Years: 2001-02 To 2003-04, 2005-06 & 2006-07 V. Shri Javed Ali Pradhan, The Dy. Commissioner – Opp. Old Holy Heart School, Of Income Tax-1(1), Alina House, Raipur (C.G.) Central Revenue Building, Civil Lines, Raipur (C.G.). [Pan: Agbpa 1758 J] (अपीलार्थीर्थी/Appellant) (प्रत्यर्थी/Respondent) : अपीलार्थी की ओर से/ Appellant By Mr.Akshay Ringasia, Ca & Mr.Rajesh Kumar Chawda, Ca प्रत्यर्थी की ओर से /Respondent By : Mr.Satya Prakash – Sharma, Sr.Dr / Smt.Ila M.Parmar, Cit-Dr : 07.08.2023 सुनवाई ई की तारीखरीख/Date Of Hearing घोषणा की तारीखरीख /Date Of Pronouncement : 09.08.2023

For Respondent: Mr.Satya Prakash –
Section 253Section 253(3)

Shri Javed Ali Pradhan, Raipur (Cg) vs. The Dy. Commissioner of Income Tax 1(1), Raipur (Cg)

In the result, all the appeals filed by the assessees stands dismissed in terms of our observations hereinabove

ITA 300/BIL/2016[2005-06]Status: DisposedITAT Raipur09 Aug 2023AY 2005-06

Bench: Shri Ravish Sood & Shri Arun Khodpiaआयकर अपील सं./Ita Nos.294 & 295/Rpr/2016 निर्धारण वर्ष /Assessment Years: 2010-11 & 2011-12 V. Smt. Fazila Pradhan, The Dy. Commissioner – Opp. Old Holy Heart School, Of Income Tax-1(1), Alina House, Raipur (C.G.) Central Revenue Building, Civil Lines, Raipur (C.G.). [Pan: Akppp 6380 B] (अपीलार्थीर्थी/Appellant) (प्रत्यर्थी/Respondent) आयकर अपील सं./Ita Nos.297 To 299, 300 & 301/Rpr/2016 निर्धारण वर्ष /Assessment Years: 2001-02 To 2003-04, 2005-06 & 2006-07 V. Shri Javed Ali Pradhan, The Dy. Commissioner – Opp. Old Holy Heart School, Of Income Tax-1(1), Alina House, Raipur (C.G.) Central Revenue Building, Civil Lines, Raipur (C.G.). [Pan: Agbpa 1758 J] (अपीलार्थीर्थी/Appellant) (प्रत्यर्थी/Respondent) : अपीलार्थी की ओर से/ Appellant By Mr.Akshay Ringasia, Ca & Mr.Rajesh Kumar Chawda, Ca प्रत्यर्थी की ओर से /Respondent By : Mr.Satya Prakash – Sharma, Sr.Dr / Smt.Ila M.Parmar, Cit-Dr : 07.08.2023 सुनवाई ई की तारीखरीख/Date Of Hearing घोषणा की तारीखरीख /Date Of Pronouncement : 09.08.2023

For Respondent: Mr.Satya Prakash –
Section 253Section 253(3)