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2018 (1) TMI 609 - HC - Income TaxAddition u/s 14A - Held that - What is not in dispute in the present case is that after the CIT(A) granted limited relief and reduced the quantum of the disallowance, the assessee was satisfied. It did not prefer either an appeal or a cross-objection within the time stipulated in this regard. This, in the opinion of the Court, meant that the issue of applicability of Section 14A attained finality. The appellant / assessee, in the light of CIT v. Holcim India (P) Ltd. (2014 (9) TMI 434 - DELHI HIGH COURT), however, woke up and chose to approach the ITAT, the appeals pending before it by the Revenue. The appeals were preferred in 2011, by the Revenue. The CIT(A) had made the order on 27.10.2010. In the circumstances, the belated cross-objections by over four years, in the opinion of the Court, meant that the appellants were seeking to rake up stale issues for which they had accepted the finality as regards their tax liability. No question of law arises.
Issues:
1. Delay in filing cross-objection under Section 14A of the Income Tax Act, 1961. 2. Condonation of delay in filing cross-objection. 3. Applicability of Section 14A to exempt income. 4. Finality of the issue of applicability of Section 14A. 5. Interpretation of relevant case laws in the context of the present case. Analysis: 1. The primary issue in this judgment revolves around the delay in filing cross-objection under Section 14A of the Income Tax Act, 1961. The appellant contended that the Income Tax Appellate Tribunal (ITAT) erred in not condoning the delay, citing a change in the interpretation of Section 14A of the Act as the reason for the delay. 2. The next issue addressed is the condonation of the delay in filing the cross-objection. The appellant argued that the delay of about 1400 days was justified due to pending appeals by the Revenue and relied on legal precedents to support their case. However, the ITAT refused to condone the delay, leading to further legal arguments. 3. Another crucial issue discussed is the applicability of Section 14A to exempt income. The appellant contended that the disallowance under Section 14A was not warranted as the exempt income was from investments in a subsidiary for business purposes, not for investment purposes. This argument was supported by relevant legal decisions, including CIT v. Holcim India (P) Ltd. 4. The judgment also addresses the finality of the issue of applicability of Section 14A. It was noted that after the CIT(A) granted limited relief and the appellant did not prefer an appeal or cross-objection within the stipulated time, the issue was considered final. The Court observed that the belated cross-objections sought to reopen settled matters, indicating an acceptance of the finality of the tax liability. 5. Lastly, the judgment interprets the relevance of legal precedents such as National Thermal Power Co. Ltd. and Turquoise Investment and Finance Ltd. in the context of the present case. The Court found that the circumstances of the present case did not align with the situations in the cited cases, leading to the dismissal of the appeals and disposal of pending applications. In conclusion, the judgment emphasizes the importance of timely filings, finality of tax liabilities, and the necessity to consider all legal dimensions while addressing appeals in tax matters.
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