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2023 (7) TMI 1316 - HC - Income TaxDisallowance u/s 14A - no income exempt from tax had been earned during the relevant period - ITAT sustaining the deletion of disallowance - HELD THAT - The issue is covered by case Cheminvest Limited 2015 (9) TMI 238 - DELHI HIGH COURT , M/S. CHETTINAD LOGISTICS PVT. LTD 2017 (4) TMI 298 - MADRAS HIGH COURT also confirmed by SC 2018 (7) TMI 567 - SC ORDER and IL And FS Energy Development Co Ltd 2023 (5) TMI 1266 - DELHI HIGH COURT Thus held that the expression does not form part of the total income in Section 14A of the envisages that there should be an actual receipt of income, which is not includible in the total income, during the relevant previous year for the purpose of disallowing any expenditure incurred in relation to the said income. Section 14A will not apply if no exempt income is received or receivable during the relevant previous year. Decided in favour of assessee.
Issues involved: Condonation of delay in filing appeals, condonation of delay in re-filing appeals, sustenance of deletion of disallowance under Section 14A of the Income Tax Act, 1961.
Condonation of delay in filing appeals: The appellant/revenue sought condonation of delay in filing appeals ITAs 409/2023 & 411/2023 (11 days delay) and ITAs 410/2023 & 412/2023 (2 days delay). The delay was condoned based on reasons provided by the appellant/revenue, and the applications were disposed of accordingly. Condonation of delay in re-filing appeals: Another application was filed seeking condonation of delay in re-filing the appeals, with a delay of 118 days. The delay was condoned based on reasons presented by the appellant/revenue, and the applications were disposed of accordingly. Sustenance of deletion of disallowance under Section 14A: The appeals concerned Assessment Years 2014-15, 2015-16, 2017-18, and 2016-17. The appellant/revenue aimed to challenge the Tribunal's order dated 02.08.2022. The issue for consideration was whether the Tribunal was correct in upholding the deletion of disallowance under Section 14A of the Income Tax Act, 1961, despite no tax-exempt income being earned during the relevant period. The court referred to previous judgments and concluded that no substantial question of law arose for consideration. Therefore, the appeals were dismissed.
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