TaxTMI 
TaxTMI 
2024 (12) TMI 459
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....aw, the Learned Principal Commissioner of Income Tax (PCIT) has erred in initiating proceedings u/s. 263 of the Income Tax Act, 1961 (the Act) vide show- cause notice dated 05.02.2024 and passing an order U/s 263 of the Act, without considering facts & Circumstances of the case. 2. On the fact and circumstances of the case as well as in Law, the Learned Principal CIT has erred in passing Revision Order u/s. 263 of the Income Tax Act, 1961 for the assessment order u/s. 143(3) of the Income Tax Act, 1961 passed by the Learned Assessing Officer after making adequate enquiries and application of mind, without considering the facts and circumstances of the case. 3. On the fact and circumstances of the case as well as in Law, the Learned Prin....
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....e ld. PCIT held that there is an under-assessment of income to the extent of Rs. 14,76,036/- on account of non-disallowance of expenses u/s 14A of Act. Accordingly, vide show cause notice dated 05.02.2024, the assessee was asked to explain as to why proceedings u/s 263 of the Act should not be initiated for failure to disallow expenses u/s 14A of Act. 10. The assessee filed reply dated 23.02.2024 which reads as under: "In this regard, we seek to bring your attention to the questionnaire shared by Ld. AO in the scrutiny assessment proceedings. The Query No. 2 is extracted as under "Query 2. Please specify applicability of Sec. 14A of the IT Act, 1961 in your case. If yes, please submit computation of disallowances under Sec. 14A r.w. Ru....
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....he rival submissions and have carefully perused the orders of the authorities below and the relevant material on record. Having heard the rival submissions, we find that the factual matrix of the instant case shows that there is no dispute that during the year the assessee did not earn any exempt income from tax. Since there is no exempt income earned by the assessee during the year, there cannot be any disallowance u/s 14A r.w.r 8D. We find that the PCIT has invoked the provisions of section 263 on account of the decision of Delhi High Court in the case of Era Infrastructure India Ltd. The PCIT himself records as follows: "In this regard, the assessee has placed reliance upon decision of Hon'ble Delhi High Court in the case of Princi....