Williamson Financial Services Limited Vs CIT (Gauhati High Court)
Gauhati High Court held that Explanation inserted to section 14A vide the Finance Act, 2022 is applicable prospectively and order holding that the said insertion is clarificatory and hence retrospective in nature is erroneous.
Facts- The appellant, Williamson Financial Services Limited, is a Company, incorporated under the Companies Act, 1956, engaged in the business of Lease Financing, Financial Advisory and Capital Market Operations. The case of the appellant Company was selected for scrutiny through CASS and a notice u/s. 143(2) of the Act of 1961 was issued and thereafter, another notice u/s. 142(1) of the Act of 1961 was issued asking the Assessee to file certain details and documents for the relevant period. The appellant Company, through its representative, had furnished the details before AO and AO, after considering the same, passed the Assessment Order on 04.02.2016.
Being aggrieved with the assessment order dated 04.02.2016, the appellant Company preferred an appeal before the Commissioner of Income Tax (Appeals), Guwahati u/s. 250 of the Act of 1961 and the said appeal was partly allowed vide order dated 31.01.2019 affirming the action of invocation of provisions of Section 14A read with Rule 8D of the Income Tax Rules, 1962. However, the CIT(A) held that the disallowance u/s. 14A of the Act of 1961 read with Rule 8D of Income Tax Rules, 1962 cannot exceed the income claimed exempt.
