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2021 (4) TMI 206 - AT - Income TaxRevision u/s 263 - Disallowance u/s 14A - HELD THAT: - As per the provision of section 263(2) of the Act, no order shall be made under sub-section (1) after expiry of two (02) years from the end of financial year in his order said to be revised was passed. As noted above, the assessment order was passed on 30.01.2015. Admittedly, the assessment was reopened under section 147 on the issue of deduction under section 80IA of the Act. In the re-assessment order the A.O. has not examined the issue of section 14A. Thus, from the facts it is clear that the Ld. PCIT, while revising the assessment order in fact revised the assessment order date 30.01.2015 passed under section 143(3). The ld. PCIT passed order under section 263(1) of the Act on 07.12.2018, which is beyond the two (02) years period of limitation, therefore, the order passed by the ld. PCIT is barred by limitation, which we hold so. Even on merit, we find that the assessee in reply to show cause notice under section 263 of the Act has specifically stated that the assessee has earned total exempt income of ₹ 2,02,337/- and the maximum disallowance should not exceed to the exempt income. The ld. PCIT instead of accepting the contention of assessee proceeded to direct the AO to frame the de-novo assessment. Considering the fact that it is settled law that disallowance under section 14A of the Act should not exceed the exempt income, thus, we are of the view that the assessment order dated 30.01.2015 was otherwise not erroneous. Thus, the assessee is also succeeded on merit.
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