2019 (6) TMI 1633

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....es raised are as follows:- "1. That the ld. CIT(A) has erred in law and on facts in deleting the suo motto disallowance of Rs. 52,59,412/- u/s 14A and Rs. 16,51,834/- u/s 14A r.w. Rule 8D(iii) of the IT Act 1961. 2. That the ld CIT(A) has erred in law and facts in directing the AO to reduce the total income by Rs. 52,59,412/- despite the fact that assessee did not file revised return of income." 3. Learned representatives fairly agree, even as learned Departmental Representative dutifully relied upon the stand of the Assessing Officer, that the issue is now covered, in favour of the assessee, by a coordinate bench decision in the case of DCIT vs. Greenland Infracon Pvt Ltd (ITA No.2039 & 2040/Ahd/2016; order dated 14.11....

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....t Section 14A of the Act disallowance cannot be kicked when there was no exempt income earned by the assessee as is the case in the present appeals. Hon'ble Delhi High Court in PCIT vs IL&FS Energy Development Company Ltd. (2017) 84 Taxman.com 186(Delhi) and the Hon'ble Madras High Court in CIT v. Chettinad Logistics (P.) Limited (2017) 80 taxmann.com 221(Madras) have expressed a clear disagreement with CBDT Circular and held that where there is no exempt income in relevant year there cannot be a disallowance of expenditure under s.14A of the Act. Similar proposition has been laid down by the Hon'ble Gujarat High Court in the case of Corrtech Energy (P.) Ltd (2014) 45 taxmann.com. 116 (Guj) and Pr.CIT vs. India Gelatine and Chem....

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....ct in very great detail in para 2.5 to 2.28 of its order. We are not inclined to reiterate the findings of the CIT(A). However, we fully endorse the observations of the CIT(A) which essentially holds that the mistake or inadvertence on the part of the assessee whereby an income not taxable has been wrongly offered for tax, will not operate as any kind of estoppel against the assessee and regardless of whether the revised return was filed or not. Once the assessee is in a position to show that it has been over assessed under the provisions of the Act even on account of assessee's own mistake or otherwise, the Revenue is under duty to assess correct income. 9. It is trite that the authorities under the Act are under sacrosanct ob....