https://www.taxtmi.com/caselaws?id=470243 Disallowance of expenditure relating to exempt income under Section 14A read with Rule 8D cannot exceed the exempt income earned in the relevant year. Restricting the disallowance to that income reflects the settled legal position and provides a valid, reasonable explanation; acceptance of a higher disallowance during assessment does not itself establish under-reporting. Penalty for under-reporting is not automatic where the explanation falls within the statutory exception for bona fide explanations. The article notes that the penalty under Section 270A was therefore unsustainable and deleted. en-us Thu, 18 May 2023 00:00:00 +0530 Tue, 21 Jul 2026 15:05:55 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=470243 Disallowance of expenditure relating to exempt income under Section 14A read with Rule 8D cannot exceed the exempt income earned in the relevant year. Restricting the disallowance to that income reflects the settled legal position and provides a valid, reasonable explanation; acceptance of a higher disallowance during assessment does not itself establish under-reporting. Penalty for under-reporting is not automatic where the explanation falls within the statutory exception for bona fide explanations. The article notes that the penalty under Section 270A was therefore unsustainable and deleted. Case-Laws Income Tax Thu, 18 May 2023 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=470243