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2026 Supreme(Online)(Del) 10454
IN THE HIGH COURT OF DELHI AT NEW DELHI
Dinesh Mehta, Madhu Jain, JJ
Principal Commissioner Of Income Tax – Appellant
Versus
Montage Enterprises Pvt. Ltd. – Respondent
ITA 318/2026
For the Appellants/Petitioners: Siddhartha Sinha, Easha Gurung, NringChamwiboZeliang, Anu Priya Nisha Minz
Substantial questions of law under Section 260A of the Income Tax Act do not arise when the issues have either been settled by binding precedents or involve mere appreciation of evidence and findings of fact by the Tribunal.
Headnote:The appeal concerns several questions of law arising under the Income Tax Act, 1961, specifically regarding disallowances under S. 14A, additions under S. 115JB, treatment of excise duty refunds, and deductions under S. 80IB and 80IC. The Appellant challenged the findings of the Tribunal regarding the mandatory nature of recording satisfaction for disallowances and the characterization of various receipts. The core issues framed involved whether the Tribunal erred in its findings on satisfaction requirements for S. 14A, the classification of capital versus revenue receipts for excise refunds, and the determination of unexplained cash credits. The court analyzed whether these questions raised substantial questions of law or were merely findings of fact. The court determined that several issues were already covered by existing binding precedents of the High Court and the Supreme Court. Regarding the remaining questions involving evidence and facts, the court found no interference was warranted. Appeal is therefore dismissed.
| Table of Content |
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| 1. procedural compliance handled for re-filing delay. (Para 1 , 2 , 3 , 4 , 5) |
| 2. enumeration of proposed substantial questions of law. (Para 6) |
| 3. application of binding precedents to resolve existing legal disputes and identification of factual findings. (Para 8 , 9 , 10 , 11) |
| 4. dismissal of appeal premised on lack of substantial questions of law. (Para 12 , 13) |
O R D E R
CM APPL. 25441/2026 (for exemption)
1. Allowed subject to all just exceptions.
2. The application is disposed of.
CM APPL. 25442/2026 (for condonation of delay in re-filing)
3. Instant application has been filed under Section 151 of C.P.C. seeking condonation of delay of 380 days in re-filing the appeal.
4. For the reasons stated in the application, the delay of 380 days in re-filing the appeal is condoned.
5. Application stands disposed of.
ITA 318/2026 & CM APPL. 25439/2026, CM APPL. 25440/2026
6. Following substantial questions of law have been proposed for consideration in the instant appeal:
A) Whether on the facts and circumstances of the case and in law, the Ld. ITAT erred in deleting the additions made u/s 14A r.w.r. 8D of the Income Tax Act, 1961 by holding that recording a separate satisfaction is a mandatory condition for making disallowance u/s 14A of the Act relying on the judgment of the Hon'ble Delhi High Court in the case of H.T. Media Ltd. v. Pr. CIT , (2017) 399 ITR 576 despite the fact that the facts in the case law relied upon are different from the facts in the instant case and the judgment of the Hon'ble Supreme Court in the case of Maxopp Investment Ltd. v. CIT , (2018) 15 SCC 523, supports that the recording of satisfaction is mandatory only when there is a suo motu disallowance u/s 14A by the Assessee, which, however was not made by the assessee in the instant case?
B) Whether on the facts and circumstances of the case and in law, the Ld. ITAT erred in not recognizing the dissatisfaction mentioned by the Assessing Officer in the assessment order itself as satisfaction in the light of the provisions of the section 14A(2) of the Act and emphasizing recording of separate satisfaction as mandatory?
C) Whether on the facts and circumstances of the case and in law, the Ld. ITAT erred in confirming the order of the Ld. CIT(A) of deletion of the addition amounting to Rs. 2,05,00,000/- on account of unexplained cash seized from the premises of the Assessee during the search and seizure operation even though the Assessee failed to provide any explanation of the source of the seized cash and merely relying on a statement of cash transactions (cashbook) which did not contain any details which could confirm the source of the seized cash?
D) Whether on the facts and circumstances of the case and in law, the Ld. ITAT erred in not appreciating that the Ld. CIT(A) had erred in the facts and circumstances of the case and in law by directing to the treat the amount claimed as self CENVAT Credit Availment as a capital receipt which is not in line with the landmark judgment of the Hon’ble Supreme Court in the case of Sahney Steel & Press Works Ltd. v. CIT, (1997) 7 SCC 764 : (1997) 228 ITR 253 (SC) wherein it was held that it was only when the Assessee had setup the industry and commenced production that various incentives were given revenue receipt and subsidy related to production could not be anything but revenue receipt?
E) Whether on the facts and circumstances of the case and in law, the Ld. ITAT erred in confirming the order of the Ld. CIT(A) of directing to treat the amount claimed as self CENVAT Credit Availment as a capital receipt even though it was clearly mentioned in the assessment order that new industrial policy in the State of Jammu and Kashmir of the Central Excise clearly provides that excise duty refund is allowed for a period of 10 years from the date of commencement of commercial production and such incentives were not available to the Assessee unless the commercial production has commenced?
F) Whether on the facts an
