High Court of Delhi · Judgments and reasoned final orders
Principal Commissioner of Income Tax (Central)-3, New Delhi v. Krishak Bharti Cooperative Ltd. (KRIBHCO)
ITA 147/2026 ·
Deletion of disallowance under Section 14A where no exempt income was earned during the relevant assessment year; the Explanation inserted in Section 14A by the Finance Act, 2022 operates prospectively from 01.04.2022, following PCIT v. Era Infrastructure (India) Ltd. (2022) 448 ITR 674 (Del).
1. FACTS OF THE CASE
After condoning a 27-day delay in filing and a 475-day delay in re-filing, the High Court considered the Revenue's appeal in ITA 147/2026 challenging the ITAT's deletion of disallowance under Section 14A in the case of Krishak Bharti Cooperative Ltd.
2. DISCUSSION BY THE COURT
Senior Standing Counsel for the Revenue fairly stated that the question of disallowance under Section 14A (and the prospective operation of the Finance Act, 2022 Explanation to Section 14A) stood covered against the Department by the Delhi High Court judgment in PCIT v. Era Infrastructure (India) Ltd. (2022) 448 ITR 674 (Del), which followed PCIT v. IL & FS Energy Development Co. Ltd. and Cheminvest Ltd. v. CIT (2015) 378 ITR 33 (Del).
3. JUDICIAL DECISION
Following Era Infrastructure (India) Ltd., the High Court dismissed the Revenue's appeal with the stipulation that the order shall abide by the final decision of the Supreme Court in the SLP in PCIT v. IL & FS Energy Development Co. Ltd.
4. OUTCOME
Assessee - Revenue appeal dismissed following Era Infrastructure (2022) 448 ITR 674 (Del).
5. AKHB REVIEW POINT
In the Delhi High Court, the Explanation inserted in Section 14A by the Finance Act, 2022 is held to be prospective from AY 2022-23 under Era Infrastructure, and no Section 14A disallowance can be made for earlier years in the absence of exempt income.
Source and verification
3-page official High Court of Delhi judgment PDF (DLHC011320532024_1_2026-02-23.pdf, 41,824 bytes).
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Applies Section 14A of the Income-tax Act, 1961 prior to the Finance Act, 2022 amendment effective 01.04.2022. Income-tax Act, 2025 equivalence is not verified.
Full 3-page primary judgment PDF text read and verified page-by-page. Follows PCIT v. Era Infrastructure (India) Ltd. (2022) 448 ITR 674 (Del), PCIT v. IL & FS Energy Development Co. Ltd. (2017) 399 ITR 483 (Del), and Cheminvest Ltd. v. CIT (2015) 378 ITR 33 (Del).
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