2015 (2) TMI 991

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....nfirmed the order of the CIT (A) and rejected the assessee?s contentions on this score. The assessee relies upon the decisions of this Court in Maxopp Investment Ltd. v. Commissioner of Income Tax, (2012) 347 ITR 272 (Del), especially holding - upon an interpretation of Section 14A (2) and (3) read with Rule 8, that:- "It is only if the Assessing Officer is not satisfied with the correctness of the claim of the assessee, in both cases, that the Assessing Officer gets jurisdiction to determine the amount of expenditure incurred in relation to such income which does not form part of the total-income under the said Act in accordance with the prescribed method. The prescribed method being the method stipulated in Rule 8D of the said Rules....

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....R 1974 SC 2249). A decision by the Assessing Officer has to be arrived at in good faith on relevant considerations. The Assessing Officer must furnish to the assessee a reasonable opportunity to show cause on the correctness of the claim made by him. In the event that the Assessing Officer is not satisfied with the correctness of the claim made by the assessee, he must record reasons for his conclusion. These safeguards which are implicit in the requirements of fairness and fair procedure under article 14 must be observed by the Assessing Officer when he arrives at his satisfaction under sub-section (2) of section 14A. As we shall note shortly hereafter, sub-rule (1) of rule 8D has also incorporated the essential requirements of sub-section....