part of the total income under the Act. Under
sub Section (2) to Section 14A of the Act, the Assessing Officer is required
to examine ... respect of such expenditure. Sub-section (3) is
nothing but an offshoot of sub-section (2) of Section 14A .
Sub-section (3) applies to cases
Income Tax, thereafter passed an order under
Section 263 of the Act observing that income computed under Section
115JA by the Assessing Officer was erroneous ... lacs was incurred for earning of exempt dividend income
under Section 14A of the Act but this expenditure was not disallowed
though the respondent-assessee
disturb the said claim/deduction under
Section 80P(2)(d) but relying upon Section 14A held that the aforesaid
incomes were not included ... order to appreciate the controversy, we have to refer to
Section 2(45) , Section 14A , Section 80A(1) & (2), Section 80AB and
Section
made by the Assessing officer under Section 14A of the
Act on the ground the respondent-assessee had not earned any exempt
income during ... section (1)
thereof to income 'under the act and not 'of the year' and a
disallowance under section 14A r.w. Rule
under Section 154 is issued, then
notice under Section 147 / 148 is barred or prohibited. Per se and ex facie
the language of Section ... Assessing Officer could not have resorted to Section 154 proceedings to
disallow expenditure under Section 14A of the Act. This was not possible
this Court has held as
under :
"41. Sub-section (2) of section 14A , as we have seen,
stipulates that the Assessing Officer shall determine ... determining such
expenditure has been introduced by virtue of sub-section
(2) of section 14A . Prior to that, the assessing was free to
adopt
Revenue in this appeal relates to the
quantum of disallowance under Section 14A of the Act. Hence, we need not
refer to any other issue ... income under Section 10 (34) of the Act.
10. The respondent-assessee had disallowed expenses of Rs.70,20,602/-
under Section 14A
Appellate Tribunal with regard to recording of satisfaction
under sub-section 2 of Section 14A is wrong as the Assessing Officer by the
said ... respect of such
expenditure. Sub-section (3) is nothing but an offshoot of sub-section
(2) of Section 14A. Sub-section (3) applies to cases
earning the exempt income
under Section 14A of the Act for AY 2010-11.
6. The return was taken up for scrutiny assessment after issue ... under Section 10(34) of the Act. In its
subsequent reply dated 11th February, 2013, the Petitioner submitted
calculation of disallowance under Section 14A read
view of the
following background;
The provision of sub-section (1) of Section 14A
provides:
"14.4 for the purposes of computing the total
income ... Appeals) could have recorded a satisfaction in terms of sub-
section (2) of Section 14A of the Income Tax Act. This issue has not been
