Disallowance u/s 14A: Prospective or Retrospective Effect of the Amendment?

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..... igh Court regarding the disallowance of expenditure u/s 14A of the Income Tax Act, 1961 (the Act). The case revolves around the scope and applicability of the amendment made to Section 14A by the Finance Act, 2022 , and whether the amendment has retrospective or prospective effect. Arguments Presented The Revenue (Appellant) challenged the Order dated 10th March, 2021 passed by the Income Tax Appe .....

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..... vs. IL FS Energy Development Company Ltd., are no longer good law. Discussions and Findings of the Court Prospective or Retrospective Application of the Amendment The Court observed that the Memorandum of the Finance Bill, 2022 explicitly stipulates that the amendment made to Section 14A will take effect from 1st April, 2022, and will apply in relation to the assessment year 2022-23 and subsequent .....

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..... . Consequently, in view of the judgments passed by the Supreme Court in KUNHAYAMMED AND OTHERS VERSUS STATE OF KERALA AND ANOTHER - 2000 (7) TMI 67 - SUPREME COURT (LB) and SHREE CHAMUNDI MOPEDS LTD. VERSUS CHURCH OF SOUTH INDIA TRUST ASSOCIATION - 1992 (4) TMI 183 - SUPREME COURT , the present appeal was dismissed, being covered by the judgment passed by the learned predecessor Division Bench in .....

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..... Cheminvest Limited, wherein it was held that no disallowance u/s 14A can be made if the assessee had not earned any exempt income. However, the Court clarified that the order passed in the present appeal shall abide by the final decision of the Supreme Court in the SLP filed in the case of PCIT vs. IL FS Energy Development Company Ltd. Summary of the Judgement The Delhi High Court, in the present .....

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..... sent appeal shall abide by the final decision of the Supreme Court in the SLP filed in the case of PRINCIPAL COMMISSIONER OF INCOME TAX 4 Versus M/s IL AND FS ENERGY DEVELOPMENT COMPANY LTD. - 2018 (5) TMI 2126 - SC Order Full Text : 2022 (7) TMI 1093 - DELHI HIGH COURT - FAQ - Frequently Asked Questions, TMI Short Notes , Experts comment, opinion Tax Management India - taxmanagementindia - tax .....

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