9911796707
TMI Blog2025 (5) TMI 1486X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 270A dated 16.03.2022 by the Assessing Officer, NFAC, Delhi (hereinafter referred to as 'ld. AO'). 2. The Ground No. 1 raised by the assessee is general in nature and does not require any specific adjudication. 3. The Ground Nos. 2 and 3 raised by the assessee are challenging the disallowance of expenses under Section 14A of the Act. It is not in dispute that investments were made by the assessee company in foreign entities from which there would be no exempt income that could be derived by the assessee. Furthermore, there was no exempt income that had actually accrued to the assessee company during the year under consideration. Despite this, the Learned AO proceeded to make disallowance of expenses under Section 14A of the Act in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in view of the decision of Hon'ble Supreme Court in the case of Reliance Industries Limited reported in 410 ITR 466 (SC). We have gone through the said workings and find that those workings are captured from the audited financial statements which are already part of the income tax return. We find that the assessee is having sufficient interest free funds of Rs 165.48 crores as on 31.3.2018 as against the loans and advances given to subsidiaries of Rs 102.40 crores. Hence it could be reasonably presumed that interest free loans to subsidiaries were advanced out of own funds of the assessee company and not out of borrowed funds in view of the decision of Hon'ble Supreme Court in the case of Reliance Industries Limited reported in 410 ITR 46 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alty proceedings? This issue is no longer res integra in view of the Full Bench Decision of Hon'ble Bombay High Court in the case of Mohd. Farhan A Shaikh vs DCIT reported in 434 ITR 1 (Bom)(FB) dated 11.3.2021. The relevant operative portion of the said judgement is reproduced hereunder:- "Question No. 3: What is the effect of the Supreme Court's decision in Dilip N. Shroff Case (supra) on the issue of non-application of mind when the irrelevant portions of the printed notices are not struck off? 187 In Dilip N. Shroff case (supra), for the Supreme Court, it is of "some significance that in the standard Pro-forma used by the assessing officer in issuing a notice despite the fact that the same postulates that inappropriate words an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 271(1)(c) is one such provision. With calamitous, albeit commercial, consequences, the provision is mandatory and brooks no trifling with or dilution. For a further precedential prop, we may refer to Rajesh Kumar v. CIT [2007] 27 SCC 181, in which the Apex Court has quoted with approval its earlier judgment in State of Orissa v. Dr. Binapani Dei AIR 1967 SC 1269. According to it, when by reason of action on the part of a statutory authority, civil or evil consequences ensue, principles of natural justice must be followed. In such an event, although no express provision is laid down on this behalf, compliance with principles of natural justice would be implicit. If a statue contravenes the principles of natural justice, it may also be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eme Court of India in SLP No. 11485 of 2016 by order dated 5th August, 2016. 22. On this issue again this Court is unable to find any error having been committed by the ITAT. No substantial question of law arises. 23. The appeals are accordingly dismissed." 11. Though the aforesaid decisions were rendered in the context of penalty proceedings under section 271(1)(c) of the Act, the ratio laid down thereon squarely applies to the facts of the instant case before us. Hence we direct the ld. AO to delete the penalty levied u/s 270A of the Act. Since the relief is granted on this preliminary technical ground, there is no need to separately adjudicate the other grounds raised by the assessee. 12. To sum up, both the appeals of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
