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TMI Blog2018 (4) TMI 1204X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 7,500/- received from a co-operative bank to taxation. However the AO considered the dividend income as exempt and accordingly granted exemption. He further took the view that the disallowance u/s. 14A of the Act has to be made in accordance with rule 8D of the I. Rules. Accordingly, he worked out disallowance out of interest expenditure at Rs. 49.94 lakhs and disallowance out of expenses at Rs. 4.98 lakhs. Accordingly he enhanced the disallowance u/s 14A by Rs. 49.94 lakhs. 3. In the appellate proceedings, the learned CIT(A) noticed that the own funds available with the assessee are in far excess of value of investments made by the assessee. Accordingly, by following the decision rendered by Hon'ble Bombay High Court in the case of Reliance Utilities and Power Ltd. (313 ITR 340), the learned CIT(A) deleted the disallowance made out of interest expenditure. However, he sustained the disallowance made out of administrative expenses under rule 8D(2)(iii) of the I. Rules, since the assessee itself has disallowed the same. 4. The revenue is aggrieved by the decision of the learned CIT(A) in deleting the disallowance made out of interest expenditure. 5. The assessee has filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed to file Cross objection. Accordingly, the cross objection was filed by the assessee with a delay of 186 days. The Learned AR further submitted that an identical issue of condoning delay in filing the cross objection on the advice received subsequently was considered by the Coordinate Bench in the case of M/s. DBS Bank Ltd. Vs. Dy IT (CO No. 189/Mum/2013 dated 15.6.2016) and the Coordinate Bench has condoned the delay. 10. Learned DR, on the contrary, strongly objected to the plea of the assessee to condone the delay. 11. We have heard the rival submissions on this preliminary issue and perused the record. We noticed that an identical issue relating to condoning delay in filing the cross objection, which was filed belated after the advice received from other counsel was considered by the Coordinate Bench in the case of DBS Bank Ltd. (supra) and the delay was condoned with following observations :- 2.2.3 We have heard the rival contentions of both the parties and perused and carefully considered the material on record. Admittedly, there was a delay of 285 days in filing the CO before the Tribunal. The Hon'ble Apex Court in the case of Collector, Land Acquisition vs. MST K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceived any exempt dividend income. He submitted that the prayer of the assessee is supported by the decisions rendered by different High Courts as detailed below:- 1. PCIT vs. Ballarpur Industries Limited [ITA No. 51 of 2016 (Bombay High Court)] 2. M/s Redington India Ltd v. Addl. CIT [392 ITR 633 (Mad)] 3. Cheminvest Ltd. v. CIT [281 CTR 447 (Del)] 4. CIT v. Shivam Motors (P) Ltd. [272 CTR 277 (All)] 5. CIT v. Corrtech Energy (P) Ltd. [272 CTR 262 (Guj)] 6. CIT v. Lakhani Marketing Incl. [272 CTR 265 (P&H)] 7. CIT v. Holcim India (P) Ltd, [272 CTR 282 (Del)] 8. CIT v. Winsome Textile Industries Ltd. (319 ITR 204 P&H) 9. CIT v. Delite Enterprises [ITA No. 110 of 2009 (Bombay High Court)] 13. He submitted that an identical issue was considered by Hon'ble Hon'ble Jurisdictional Bombay High Court in the case of Principal CIT Vs. Ballarpur Industries Limited (supra), wherein Hon'ble Bombay High Court noticed that the Tribunal has followed the decision rendered by Hon'ble Delhi High Court in the case of Cheminvest Ltd. (supra), wherein it was held that no disallowance is required to be made u/s. 14A of the Act if there was no exempt income. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmissions dated 21.06.2016 to stress the point that even if the assessee under a mistake or misconception has over assessed itself in the return of income, the Tribunal can give relief to the assessee to the extent the assessee is over assessed and direct the lower authorities to tax the assessee as per the provisions of law. We find that in the case of "National Thermal Power Co. Ltd." vs. CIT" 229 ITR 383, the facts before the Hon'ble Supreme Court were that the assessee in that case offered the interest amount for taxation and the assessment was completed on that basis. Before the Ld. CIT (A), the assessee though had taken a number of grounds of appeal; however, the inclusion of the said amount of interest was not challenged. The inclusion of the said amount of interest was not objected to even in the grounds of appeal as originally filed before the Tribunal. However, the assessee by way of subsequent letter raised the additional ground in relation to the said inclusion of interest into the income of the assessee. In the above circumstances, the question before the Hon'ble Supreme Court was "Where on the facts found by the authorities below a question of law arises (tho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng of a new plea in an appeal and each case must be considered on its own facts. The co-ordinate bench of the Tribunal in the case of "Shri Chandrashekhar Bahirwani" ITA No.7810/M/2010 and 6599/M/2011 vide order dated 17.06.2015 while deciding the question as to whether the income cannot be assessed less than the returned income has observed as under: "5. Now coming to the finding of the Ld. CIT(A), that income cannot be assessed less than the returned income, the Ld. A. of the assessee has submitted before us that the action of the Ld. CIT(A) in rejecting the claim of the assessee on this ground was not justified. He has further relied upon the decision of the Hon'ble Gujarat High Court in the case of "Gujarat Gas Ltd. vs. JCIT" (2000) 245 ITR 84. In the said case, the words of the Circular No.549, para 5.12, dt. 31st October, 1989, providing that the assessed income under section 143(3) shall not be less than the returned income was considered by the Hon'ble High Court and it was held that as per proviso to section 119 of the Act, the Board cannot issue instructions to the Income Tax Authority to make a particular assessment or to dispose of a particular case in a part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isions of higher courts and that of co-ordinate benches of the tribunal, we direct the AO to restrict the disallowance u/s 14A to the extent of exempt income earned by the assessee during the year." We notice that the co-ordinate bench, in the case of Shri Chandrashekar Bahirwani (supra) has expressed the view that : "The assessee cannot be burdened with the taxes which he otherwise is not liable to pay under the law. Even a duty has also been cast upon the IT authorities to charge the legitimate tax from the taxpayers. They are not there to punish the taxpayers for their bonafide mistakes." We notice that the above said decision has been followed in the case of Tata Industries Ltd (supra) by the co-ordinate bench in order to reject the contention that the reduction of disallowance voluntarily made by the assessee u/s 14A will make the assessed income go below the returned income. 18. In the instant case also, the assessee has made voluntary disallowance u/s 14A of the Act even though it did not receive any dividend income. As per the decisions rendered by various courts, no disallowance is required to be made in the absence of exempt income. Hence the assessee has filed CO ..... 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