No proof that Assessee has not earned any Exempt Income for relevant Assessment Year: ITAT restores matter to AO [Read Order]

The Bangalore Bench of the Income Tax Appellate Tribunal (ITAT), restored matter to the Assessing Officer (AO), as there was no proof that assessee has not earned any exempt income for relevant assessment year.

The assessee,Royal Orchid Hotels Ltd has nowhere mentioned that there is any exempt income earned by the assessee or not. During the impugned assessment year, the assessee has also not submitted before us computation of income as well as the financial statements so that it can be concluded that there was any exempt income or not for the impugned assessment year.

The Counsel for the assessee, R.B Krishnasubmitted that the assessee has not received any exempt income therefore no addition can be made as decided by the various upper courts.

The Counsel appearing for the Department, Sankar Ganesh submitted that there is an amendment has been made by Finance Act on 2022 by inserting Explanation for removing the doubts, this explanation has been dealt by Delhi High Court in the case of Pr.CIT (Central) vs. Era Infrastrucuture (India) Ltd.

A Division Bench consisting of George George K, Judicial Member and Laxmi prasad Sahu, Accounatant Member observed that “As mentioned earlier, there is nothing on record to suggest that the assessee has not earned any exempt income for the relevant assessment year. For the limited purpose of examination of the same, the matter is restored to the files of the AO.”

“The AO on examination finds that there is no exempt income earned during the relevant assessment year, there shall be no disallowance u/s 14A of the IT Act. The AO shall decide the issue as per law laid down by the Era Infrastructure India Ltd” the Tribunal said.

To Read the full text of the Order CLICK HERE

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