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TMI Blog2023 (3) TMI 1113X X X X Extracts X X X X X X X X Extracts X X X X ..... ntial questions of law:- "1. Whether the Tribunal below, while interpreting section 36(1)(viia)(a) of the Income-tax Act, 1961, committed substantial error of law in holding that deduction under the first proviso was alternative to that under sub-clause (a) and that no deduction under the first proviso was allowable if deduction had been allowed under sub-clause (a) thereby rejecting the appellant's claim for deduction of Rs.140,33,70,000/- under the first proviso ? 2. Whether the Tribunal below committed substantial error of law in holding that the proviso of sub-sections (2) and (3) inserted in Section 14A of the Income Tax Act, 1961 with effect from April 1,2007 and Rule 8D inserted in the Income Tax Rules 1962 on March 24, 2008 was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sioner of Income Tax, Chennai vs. Tamilnadu Industrial Investment Corporation Limited reported in (2019)112 Taxmann.com 386 (Mad.). The only distinction in the said case was that the respondent assessee in the said case was Public Financial Institution to which subclause (c) under the said provision would stand attracted. The question of applying sub-clause(3) in Section 36(1)(viia)(a) does not arise and the proviso cannot be read independently was rejected for the reason that the proviso to sub-clause (c) in Section 36(1)(viia)(a) uses the words "at its option". The proviso provided that a Public Financial Institution or a State Financial Corporation or a State Industrial Investment Corporation referred to in sub-clause (c) of Section 36(1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngineering Co. (P) Ltd. reported in (2022) 135 Taxmann.com 167(Cal.). In the light of the said decision, the procedure under Rule 8D of the Income Tax Rules, 1962 was held to be prospective in operation and not retrospective. Thus, the substantial questions of law nos.2 and 3 are answered in favour of the appellant/assessee and the Assessing Officer is directed to do the recomputation bearing in mind the above legal principle. So far as the substantial question of law no.4 is concerned, we are of the view that it is entirely factual and moreover the matter is remanded back to the Assessing Officer for a fresh decision in the matter and, therefore, the substantial question of law no.4 need not be answered in this appeal. In the result, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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