Held, dismissing the appeal of the Revenue the Court held that the Tribunal had not erred in deleting the disallowance made by the Assessing Officer under rule 8D read with section 14A. Though the judgment followed by the Tribunal had been challenged and was pending adjudication before the Supreme Court, there had been no stay of the judgment till date. The order passed in the appeal should abide by the final decision of the Supreme Court in the special leave petition. The Memorandum Explaining the Provisions of the Finance Bill, 2022 ((2022)440 ITR (St.) 226) explicitly stipulates that the amendment made to section 14A of the Income-tax Act, 1961 will take effect from April 1, 2022 and will apply in relation to the assessment year 2022-23 and subsequent assessment years. The amendment of section 14A which is “for removal of doubts” cannot be presumed to be retrospective even where such language is used, if it alters or changes the law as it earlier stood. Relied on Sedco Forex International Drill. Inc. v. CIT (2005) 279 ITR 310 (SC). (AY.2013-14)
PCIT v. Era Infrastructure (India) Ltd. (2022) 448 ITR 674 / 216 DTR 191 / 327 CTR 489 / 288 Taxman 384 (Delhi)(HC)
S. 14A : Disallowance of expenditure-Exempt income-Not earned any exempt income-Amendment providing for disallowance even if assessee has not earned exempt income is not retrospective-Precedent-Special Leave petition pending before Supreme Court but order of court not stayed-Binding on Tribunal-Interpretation of taxing statutes-Provision for removal of doubts cannot be presumed to be retrospective if it alters or changes Law as it stood. [R. 8D]