Case Law Details
PCIT Vs Bhilwara Energy Ltd (Delhi High Court)
ntroduction: Delve into the recent judgment by the Delhi High Court in the case of PCIT Vs Bhilwara Energy Ltd, focusing on the crucial aspect of Section 14A disallowance. The court’s decision highlights a significant precedent regarding the inadmissibility of such disallowance in the absence of exempt income during the relevant period.
Detailed Analysis: The Delhi High Court addressed several applications related to the condonation of delays in filing appeals. After a detailed consideration of the appellant’s submissions, the court granted condonation, paving the way for an examination of the substantive issues in the appeals (ITAs 409/2023, 410/2023, 411/2023 & 412/2023).
The core issue revolved around the deletion of disallowance under Section 14A of the Income Tax Act, 1961, as challenged by the appellant/revenue. The court noted that the crux of the matter was whether the Tribunal erred in upholding the deletion of disallowance when no income exempt from tax had been earned during the relevant period.
The legal counsel for the appellant, Mr. Abhishek Maratha, argued the case, contending that the Tribunal’s decision warranted scrutiny. The court, however, observed that the issue had already been addressed in previous judgments, citing specific cases such as Cheminvest Limited v. Commissioner of Income Tax-VI, Commissioner of Income-tax, Central 1, Chennai v. Chettinad Logistics (P.) Ltd., and an order dated 30.05.2023 in ITA Nos. 316/2023 and 317/2023.
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