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TMI Blog2021 (1) TMI 1046X X X X Extracts X X X X X X X X Extracts X X X X ..... ar 2009-2010. The appeal was admitted by a Bench of this Court vide order dated 09.11.2016 on the following substantial questions of law: "1. Whether the Tribunal is justified in law in confirming the addition of Rs. 24,95,846/- made under section 14A read with Rule 8D by holding that the Appellant has not made any claim that it has not incurred any expenditure for earning the exempt income which is contrary to material on record and consequently perverse on the facts and circumstance of the case? 2. Whether the Tribunal erred in law in not holding that the assessing officer has not arrived at the mandatory satisfaction as required under section 14A and hence no disallowance is possible on the facts and circumstances of the case?" 2. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... instant case, the aforesaid mandatory requirement has not been fulfilled by the Assessing Officer. However, the aforesaid aspect of the matter is neither been appreciated by the Commissioner of Income Tax (Appeals) nor the Tribunal. In support of aforesaid submission, reliance has been placed on the decision of the Supreme Court in 'MAXOPP INVESTMENT LTD. Vs. COMMISSIONER OF INCOME- TAX', [2012] 347 ITR 272 (DELHI), which has been upheld by the Supreme Court in the decision reported in 'MAXOPP INVESTMENT LTD. Vs. CIT', (2018) 402 ITR 640. On the other hand, learned counsel for the revenue has invited our attention to Paragraphs 10 and 11 of the order passed by the Tribunal and has submitted that all the authorities under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 147 of the Act or pass an order enhancing the assessment or reducing the refund already made or otherwise increasing the liability of the assessee under Section 154 of the Act for any Assessment Year. 5. In the instant case, the Assessing Officer in Paragraph 5 of the order has dealt with the claim of the assessee with regard to disallowance under Section 14A of the Act. Paragraph 5 of the Act is reproduced below for reference: "5. Disallowance U/s 14A: The assessee claimed that Income received from Mutual Fund is totally exempt from Income Tax U/s 10(23D)(i) & (ii) of the Income Tax Act, 1961. These mutual funds are registered under the Securities and Exchange Board of India Act, 1992 or regulations made thereunder. Further any incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith regard to correctness of the claim made by the assessee in respect of such expenditure, in relation to the income which does not form part of the total income of the assessee. The Assessing Officer before embarking upon determination of the amount of expenditure incurred in the light of the exempted income, has to record a finding that he is not satisfied with the correctness of the claim of the assessee in respect of such expenditure. The aforesaid mandatory requirement has not been fulfilled by the Assessing Officer before disallowing the assessee under Section 14A of the Act. 6. In view of the preceding analysis, the substantial questions of law framed by this Court is answered in favour of the assessee and against the revenue. 7. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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