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TMI Blog2024 (10) TMI 310X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed by the A.O has been the subject matter of appeal the power of Ld. PCIT is limited only to such matter as had not been considered and decided in such appeal. In the above case, the computation of disallowance u/s. 14A of the Act as per Rule 8D of the Rules is subject matter of appeal before Ld. CIT(A) and the Ld CIT(A) appeal has all power to correct the computation as per Rule 8D . As in the case of Smt. Renuka Philip [ 2018 (12) TMI 129 - MADRAS HIGH COURT ] has held that when larger issue is pending before the Commissioner of Appeal , the PCIT could not exercise power u/s 263 to revise the assessment order. We therefore, held that revision order u/s. 263 of the Act passed by Ld PCIT is bad in law and therefore, liable to be quashed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s. 263 of the Act on the same issue to re-work the disallowance u/s. 14A of the Act based on the fair value of investment as reflected in the balance sheet of the company as per formula in Rule 8D(2). The assessee has objected to the proposal raising the ground that the very same subject matter of disallowance is pending before Ld. CIT(A) and therefore, as per clause(c) of Explanation-1 to Section 263 of the Act proceedings u/s. 263 of the Act are not permissible. The Ld. PCIT rejecting the assessee s objection has held the order passed by the A.O is erroneous in so far as it is prejudicial to the interest of Revenue as the A.O while computing disallowance as per Rule 8D(2) of the Rules has taken cost of investment instead of considering t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n such appeal. In the above case, the computation of disallowance u/s. 14A of the Act as per Rule 8D of the Rules is subject matter of appeal before Ld. CIT(A) and the Ld CIT(A) appeal has all power to correct the computation as per Rule 8D . The Hon ble Madras High Court in the case of Smt. Renuka Philip vs. ITO [2019] 409 ITR 567 (Mad.) , has held that when larger issue is pending before the Commissioner of Appeal , the PCIT could not exercise power u/s 263 to revise the assessment order. We therefore, held that revision order u/s. 263 of the Act passed by Ld PCIT is bad in law and therefore, liable to be quashed. 7. In the result, the appeal filed by the assessee is allowed. Order pronounced on 30th September, 2024. - - TaxTMI - TMIT ..... X X X X Extracts X X X X X X X X Extracts X X X X
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