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TMI Blog2022 (3) TMI 1034X X X X Extracts X X X X X X X X Extracts X X X X ..... nexure that disallowance under 14A of IT Act should be made as per the methodology prescribed in Rule 8D of the IT Rules and it is seen that Section 14-A read with Rule 8D was not adhered to by the assessee in computation of income Disallowance under 14A of IT Act should be made as per the methodology prescribed in Rule 8D of the IT Rules and it is seen that Section 14-A read with Rule 8D was not adhered to by the assessee in computation of income. Therefore, this matter turns on facts. To be noted, annexure also makes it clear that the writ petitioner assessee bank itself made disallowance to the tune of over 69.23 lakhs under Section 14A and it is in that context that there is a reference to Section 14A read with Rule 8D. The second paragraph of the annexure also deals with this aspect of the matter and makes it clear that disallowance of interest / expenditure ought to have been computed at a particular quantum where as the assessee bank has disallowed an amount of only 69.23 lakhs and odd. These need to be disallowed is the point raised. All this turns heavily on facts. These are all questions of fact. Therefore, it cannot be gainsaid that Section 14 A and Rule 8D have not been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd therefore a notice dated 23.11.2021 being a notice under Section 142(1) of IT Act with an annexure came to be issued; that the writ petitioner on 07.12.2021 filed return of income in response to the impugned notice; that the writ petitioner also sent in its electronic response on 13.12.2021; that a speaking order came to be made by the first respondent on 24.12.2021; that another notice under Section 142(1) of IT Act came to be issued by the first respondent for continuing the reassessment; that the writ petitioner uploaded an e-response on 04.01.2022 inter alia seeking to stop the proceedings of re-assessment and also taking exceptions to the speaking order dated 24.12.2021 made by the first respondent; that the reassessment is pursuant to impugned notice and therefore, the captioned writ petition has been presented in this Court on 27.01.2022 assailing the impugned notice. 4. This Court, having set out the factual matrix in a nutshell containing facts that are imperative for appreciating this order and the trajectory the matter has taken thus far now proceeds to set out the rival contentions. 5. Learned counsel for writ petitioner in his campaign against the impugned notice, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xercise of discussion and dispositive reasoning qua the points that have been urged in the hearing. 11. The arguments predicated on non-availability of tangible material, in the considered view of this Court does not really hold water at this stage in a challenge to a notice under Section 148 of IT Act in the light of the annexure to Section 142(1) dated 23.11.2021, a scanned reproduction of which is as follows: 12. Before proceeding further, though several case laws have been annexed to the paper book, learned counsel made it clear that he is not relying on Kelvinator India case law [Commissioner of Income-Tax Delhi Vs. Kelvinator of India Ltd.] reported in [2010] 187 Taxman 312 in this case. To be noted, Kelvinator India case has been annexed to the paper book but as the same has not been pressed into service, a discussion in this regard is not necessary. Learned counsel for writ petitioner pressed into service a judgment of Hon'ble Delhi High Court made in Oracle case [Oracle Systems Corporation Vs. Assistant Director of Income-tax] reported in [2015] 62 Taxmann.com 291 in support of the above argument. The facts of Oracle case are very different as it turns on Double Taxa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing as to how the factual situation fits in with the fact situation of the decision on which reliance is placed. There is always peril in treating the words of a speech or judgment as though they are words in a legislative enactment, and it is to be remembered that judicial utterances are made in the setting of the facts of a particular case, said Lord Morris in Herrington Vs. British Railways Board (1972) 2 WLR 537. Circumstantial flexibility, one additional or different fact may make a world of difference between conclusions in two cases.' 14. To be fair to the learned counsel for writ petitioner, who argued with specificity, this Court deems it appropriate to make it clear that learned counsel for writ petitioner very fairly said he would not press into service Kelvinator case only when Padma Sundara Rao declaration of law was brought to the notice of the learned counsel and when the learned counsel was faced with the situation of setting out the facts in Kelvinator case before this Court. 15. M/s.SUN Direct TV Private Ltd. case [M/s.SUN Direct TV Private Ltd. Vs. The Assistant Commissioner of Income Tax] reported in 2018 SCC OnLine Mad 3160 and Honda Siel Power Products c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,280. It has come to the notice that as per Clause 20 of Form 3CD, the profit amounting to ₹ 107.70 lakhs has been shown in Annexure VIII under Section 41 of the Income Tax Act, 1961. Out of this, the assessee has credited a sum of ₹ 9.23 lakhs on account of provision for warranties no longer required written back under the head 'Other Income' in the P & L Account leaving a balance of ₹ 98.46 lakhs which has not been shown under the head 'Other Income'. Therefore, this amount of ₹ 98.46 lakhs has not been offered for taxation by the assessee and the income of the assessee has been under assessed by ₹ 98.46 lakhs. Further, it is seen that the assessee has earned dividend income of ₹ 188.73 lakhs on long-term nontrade investments which is claimed as exempt under Section 10(33) of the Income Tax Act, 1961. However, there are various administrative expenses for earning the dividend income like the expenses on the personnel involved in taking the decision of investment, expenses related to purchase / sale of the investment like the DMAT fee, collection expenses, telephone expenses, etc. and other administrative expenses and only th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of section 143or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year:' A careful perusal of the first proviso makes it clear that the four years embargo has three exceptions and one of the exceptions is failure to disclose fully and truly all material facts necessary for assessment. That is the bone of contention in the writ petitioner's campaign against the impugned order and therefore it tantamounts to begging the question. Therefore, the limitation point is clearly a non-starter. Turning to the argument on Section 14-A read with Rule 8D which has been captured supra as well as the argument on non-consideration of objections besides audit objections not being a valid piece of information ..... X X X X Extracts X X X X X X X X Extracts X X X X
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