ITAT Favors Micromax in ₹16 Cr FD Interest and Section 14A Dispute; Quashes Revision Order

The Income Tax Appellate Tribunal (ITAT) has provided a major relief to Micromax Informatics by quashing a revision order passed by the Principal Commissioner of Income Tax (PCIT). The revision order had sought to reopen a closed assessment concerning the treatment of interest earned on fixed deposits and the disallowance of expenses under Section 14A of the Income Tax Act. The ITAT found that the original assessment order was not erroneous or prejudicial to the interests of the revenue, which are the necessary conditions for invoking revisional powers under Section 263. The tribunal noted that the assessing officer had duly considered these issues during the original assessment. By quashing the revision order, the ITAT has upheld the principle of finality in assessment proceedings and protected the taxpayer from a second round of litigation on issues that were already examined and settled.