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2016 (2) TMI 827 - AT - Income TaxRevision u/s 263 - disallowance u/s 14A - Held that:- Assessing Officer while passing the assessment order is mandatorily required to record a satisfaction as to why suo moto disallowance made by the assessee of the expenditure relatable to exempt income was unreasonable and unsatisfactory, under sub-section (2) to section 14A of the Act and thereafter, resort is to be made to the provisions of Rule 8D of the Rules. In case, where the Assessing Officer is satisfied with the correctness of the claim of the assessee in respect of the expenditure relatable to the exempt income, then there is no reason to apply the method prescribed by the Rules as laid down by the jurisdictional High Court in Godrej & Boyce Mfg. Co. Ltd. Vs. DCIT (2010 (8) TMI 77 - BOMBAY HIGH COURT ) In such circumstances, where the matter has already been considered by the Assessing Officer while completing assessment in the hands of the assessee, the Commissioner has no authority to initiate proceedings under section 263 of the Act in directing the Assessing Officer to re-look at the facts and apply the provisions of Rule 8D of the Rules in order to work out the disallowance under section 14A of the Act. We find no merit in the said directions of the Commissioner, where the Assessing Officer had applied his mind and was satisfied with the working of assessee and had not resorted to the provisions of Rule 8D of the Rules, and since one view has been taken by the Assessing Officer, the same cannot be substituted by the Commissioner in the garb of exercise of jurisdiction under section 263 of the Act. In case, where the Assessing Officer had recorded the satisfaction as required under section 14A of the Act, made enquiries and accepted the calculations of the assessee, such an order passed by the Assessing Officer cannot be said to be erroneous as the same has been passed in line with the provisions of the Act. In this regard, we find no merit in the exercise of jurisdiction by the Commissioner under section 263 of the Act and the same is held to be invalid - Decided in favour of assessee
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