$ 14 * IN HIGH COURT OF DELHI AT NEW DELHI + ITA 230/2019 PR. COMMISSIONER OF INCOME TAX - 4 Appellant Through: Mr. Raghvendra Singh, Sr. Standing Counsel with Mr. Vipul Agrawal, Advocate. versus H.T. MEDIA LTD. Respondent Through: None. CORAM: HON'BLE MR. JUSTICE VIPIN SANGHI HON'BLE MR. JUSTICE SANJEEV NARULA ORDER % 26.08.2019 1. This is appeal filed by Revenue against order dated 5th September 2018, passed by Income Tax Appellate Tribunal (ITAT) under Income Tax Appeal No. 6394/DEL/2013 (A.Y. 2009-10). 2. At outset, Mr. Raghvendra Singh, learned Senior Standing Counsel for Appellant very fairly states that issues/questions framed in present appeals are covered by decision of this Court in H.T. Media Ltd. v. Principal Commissioner of Income Tax-IV (2017) 399 ITR 576 (Delhi). questions of law framed in said appeal were as follows: " While admitting ITA No. 548 of 2015 on 15th October 2015, following question was framed for consideration: Whether ITAT erred in remitting matter concerning deletion of disallowance of interest under clause (ii) of Rule 8 D (2) of Income Tax Rules, 1962 to Assessing Officer for fresh determination in light of decision of this Court in CIT v. Taikisha Engineering India Ltd. (2015) 370 ITR 338 (Del)?" While admitting ITA No. 549 of 2015 on 15th October 2015, following question was framed for consideration: "Whether Assessing Officer recorded proper satisfaction in terms of Section 14A(2) and Rule 8 (D) of Income Tax Rules, 1962 and, in calculating disallowance at 0.5% of average value of investments as per clause (iii) of Rule 8 D (2) of Income Tax Rules, 1962?" 3. findings returned by this Court in said decision read as follows: "37. In considered view of this Court, above observations of AO in assessment order are of broad general nature not with particular reference to facts of case on hand. 38. Court is also unable to agree with Mr. Singh that on this aspect there are concurrent findings of both CIT (A) as well as ITAT. CIT (A) disallowed exempt expenses by merely repeating what AO had stated about cost that is built into so called 'passive' investments and simply recorded that AO was bound to Rule 8D and, therefore, was justified in determining administrative costs at 0.5%. Here again, CIT (A) failed to note that without mandatory requirement, under Section 14A of Act and Rule 8D of Rules, of satisfaction being recorded being met, question of applying Rule 8D (1) did not arise. 39. Turning now to order of ITAT, in para 33, it recorded submission of AR that AO did not record any satisfaction about Assessee not properly offering expenditure incurred in relation to exempt income at Rs. 3 lakhs. ITAT reproduced contents of para 3.3.1 of assessment order, which has been extracted by this Court hereinbefore, which contains general observations regarding earning of exempt income. This cannot be accepted as recording by AO of satisfaction regarding claim of Assessee after examining its accounts. Again, in para 34 of its order, ITAT simply reproduced para 3.3.6 of assessment order where, again, no reasons have been provided but only conclusion has been reached that AO was "satisfied that Assessee had incurred expenses to manage its investments which may yield exempt income, and Assessee grossly failed to calculate such expenses in reasonable manner to ascertain true and correct picture of its income and expenses." 40. Consequently on aspect of administrative expenses being disallowed, since there was failure by AO to comply with mandatory requirement of Section 14 (2) of Act read with Rule 8D (1) (a) of Rules and record his satisfaction as required thereunder, question of applying Rule 8D (2) (iii) of Rules did not arise. question framed in ITA 549 of 2015 is answered accordingly." 4. In view of submission made by learned Counsel for Appellant, appeal is accordingly dismissed. VIPIN SANGHI, J SANJEEV NARULA, J AUGUST 26, 2019 ss Pr. Commissioner of Income-tax-4 v. H.T. Media Ltd