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2021 (1) TMI 87 - ITAT CHENNAIRevision u/s 263 - disallowance of expenditure u/s.14A - HELD THAT:- AO has considered disallowance of expenditure u/s.14A of the Act and has computed total disallowance of ₹ 29,37,148/- under Rule 8D(2)(iii) at the rate of 0.5% on average investments. It is also an admitted fact that the assessee has challenged the additions made by the AO towards disallowance of expenditure u/s.14A of the Act before the first appellate authority and was unsuccessful because the ld.CIT(A) has upheld the disallowance computed by the ld.AO. The assessee has preferred further appeal before the ITAT on the same issue which was pending for disposal. Thus the issue of disallowance of expenditure u/s.14A of the Act is a subject matter of appeal before the appellate authority and further once an issue is before the appellate authority then the assessment order merged with the appellate order and the appellate authority shall have all powers including enhancement of income. Therefore, when the Appellate Commissioner is having power to examine the issue, then the PCIT cannot have parallel jurisdiction to examine the same issue u/s. 263 proceedings, because if we allow the PCIT to have jurisdiction on said issue then it leads to multiple proceedings which is not the intention of the Legislature. In this view of the matter and respectfully following the decision in the case of CIT vs. Sera Sera Productions Limited [2015 (5) TMI 937 - BOMBAY HIGH COURT] we are of the considered view that the powers exercised by the PCIT u/s.263 of the Act on the issue of disallowance of expenditure u/s.14A of the Act is contrary to the provisions of Clause (c) to Explanation (1) of Section 263 of the Act and hence we are of the considered view that the PCIT has erred in revising the assessment order u/s.263 - Decided in favour of assessee.
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