Delhi HC upholds Section 14A Disallowance in rejection of Retrospective Application of 2022 Amendment

The Delhi High Court upheld the disallowance under Section 14A of the Income Tax Act, dismissing an appeal that sought the retrospective application of a 2022 amendment. The taxpayer had argued that the amendment, which provided clarifications on expenses incurred in earning exempt income, should apply retrospectively to offer relief from past disallowances. The court, however, ruled that retrospective application would only apply where explicitly provided by law. In this case, the court ruled that the legislative intent was not to make the 2022 amendment applicable for earlier assessments. This verdict reinforces the principle that tax amendments with significant implications cannot be applied retroactively unless specifically stated.