The Pr. Commissioner Of Income Tax -18 v. Oil Industry Development Board

Signature Not Verified $~3 *IN THE HIGH COURT OF DELHI AT NEW DELHI +ITA 1025/2019 THE PR. COMMISSIONER OF INCOME TAX -18 ..... AppellantThrough:Mr.Ruchir Bhatia, Sr.StandingCounsle for the Revenue.versus OIL INDUSTRY DEVELOPMENT BOARD ..... Respondent Through:None %Date of Decision: 21[st]November, 2022 CORAM:HON'BLE MR. JUSTICE MANMOHANHON'BLE MS. JUSTICE MANMEET PRITAM SINGH ARORA J U D G M E N T MANMOHAN, J (Oral): 1.Present Income Tax Appeal has been filed challenging the Orderdated 12[th]June, 2019 passed by the Income Tax Appellate Tribunal(‘ITAT’) in ITA No. 4417/Del./2016 for Assessment Year 2012-13.2.Learned counsel for the appellant states that the ITAT has erred indeleting the addition of Rs.4.65 crores made by the assessing officer underSection 14A of the Income Tax Act, 1961 (‘the Act’). He states that theITAT has erred in holding that no disallowance can be made under Section14A of the Act read with Rule 8D of the Income Tax Rule, 1962 in thecase wherein no exempt income has been earned during the year underconsideration. ITA 1025/2019 Page 1 of 3 3.A perusal of the paper book reveals that the authorities below havegiven concurrent finding of fact that the assessee did not earn any dividendincome during the year under consideration. The relevant extract of theITAT order is reproduced hereinbelow:- “7. It is pertinent to mention here that the decision of the Tribunal was upheldby the Hon'ble Delhi High Court and the SLP filed by the Revenue wasdismissed by Hon'ble Supreme Court. We find the Ld. CIT(A) deleted thedisallowance made by the Assessing Officer u/s 14A r/w. Rule 8D on theground that the assessee has not earned any dividend income during the year.The Ld. DR also could not controvert the above factual findings given by theCIT(A), therefore, following the decision of Hon’ble Delhi High Court in thecase of Cheminvest Limited (supra), we hold that no disallowance u/s. 14Ar/w. Rule 8D is called for when the assessee has not received any dividendincome during the year. The order of the CIT(A) is accordingly upheld andground raised by the revenue is dismissed.” (emphasis supplied) 4.This Court is of the view that the present case is covered by theDivision Bench judgmentin Cheminvest Ltd.vs.CIT, [2015] 61Taxmann.com 118 (Delhi), wherein it has been held that the expression'does not form part of the total income' in Section 14A of the Act meansthat there should be an actual receipt of income which is not includible inthe total income, during the relevant previous year for the purpose ofdisallowing any expenditure incurred in relation to the said income. Inother words, Section 14A will not apply if no exempt income is received orreceivable during the relevant previous year. 5.Furthermore, this Court in Pr. Commissioner of Income Tax(Central)-2Vs.M/sEra Infrastructure (India)Ltd.,[2022]141taxmann.com 289 (Del) has dealt with the issue of amendment made bythe Finance Act, 2022 to Section 14A of the Act. The relevant portion ofthe said judgment is reproduced hereinbelow: ITA 1025/2019 Page 2 of 3 Signature Not Verified “8. Consequently, this Court is of the view that the amendment of Section 14A,which is “for removal of doubts” cannot be presumed to be retrospective evenwhere such language is used, if it alters or changes the law as it earlierstood.” 6.Accordingly, this Court is of the view that no substantial question oflaw arises for consideration in the present appeal. Accordingly, the same isdismissed. MANMOHAN, J MANMEET PRITAM SINGH ARORA, J NOVEMBER 21, 2022KA ITA 1025/2019