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Case Law Details

Case Name : Jubilant Securities Pvt Ltd Vs. Deputy Commissioner Of Income-Tax (Delhi High Court)
Appeal Number : ITA 1000/2017 & CM No. 41760/2017
Date of Judgement/Order : 10/01/2018
Related Assessment Year :
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Jubilant Securities Pvt Ltd Vs. DCIT (Delhi High Court)

1. The assessee/appellant urges that the Income Tax Appellate Tribunal (ITAT) fell into error in declining to condone the delay which occurred in the filing of its cross-objection having regard to the changed position in law substantively, with respect to the interpretation of Section 14A of the Income Tax Act, 1961 (hereafter referred to as “the Act”).

2. The assessees in these appeals were subjected to dis allowance under Section 14A of the Act. They appealed to the CIT(A), who granted limited relief as to the quantum on an application of the decision of the Bombay High Court in Godrej & Boyce Manufacturing Co. Ltd. Mumbai v. DCIT 328 ITR 81. In the meanwhile, the relief granted became the subject matter of appeal to the ITAT, by the Revenue. During the pendency of those appeals, by judicial decision (in the judgment reported as CIT v. Holcim India (P) Ltd. ITA No.486 & 299/2014 decided on 05.09.2014) the cross-objections were filed. The assessee contended that the exempt income for which dis allowance was ordered under Section 14A of the Act was by way of investment in subsidiary for business purposes and not for investment purposes and therefore, the dis allowance was not warranted. That concededly was the purport of CIT v. Holcim India (P) Ltd. (supra) and other decisions relied upon by the assessee.

3. The cross-objections were grossly delayed – to the extent of about 1400 days or so. The ITAT refused to condone the delay. In the application seeking condonation, the assessee contended that since the Revenue’s appeals were pending, it was entitled to prefer the cross-objection and urged the question of law, that it sought to. The assessee relied upon the authority of the Supreme Court in National Thermal Power Co. Ltd. v. CIT (1998) 229 ITR 383 (SC) and some other judgments of the High Courts. The ITAT, however, declined to grant relief and rejected the application for condonation of delay.

4. It is urged on behalf of the assessee that once a party enters the Appellate Court, the issues are at large and the appellate forum is entitled to consider the correct position in law. So viewed, the cross-objection preferred was sufficient for the ITAT to have examined the claim of applicability of Section 14A to the exempt income derived in the present case and whether that be brought to tax at all. Learned counsel relied upon National Thermal Power Co. Ltd. (supra) as well as the judgment of the Madhya Pradesh High Court [Deputy Commissioner of Income Tax v. Turquoise Investment and Finance Ltd. 299 ITR 143 (MP)]. It was submitted that in the larger interest of justice, once the appellate forum is seisin of the cause in an appeal, it is under a duty to exempt all dimensions including the up to date developments in law to grant relief or deny it, as the case may be.

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