|Income Tax Appellate Tribunal
Section 14A Disallowance | AO Must Record Objective Satisfaction Before Applying Rule 8D: ITAT Agra Bench
ITAT Agra rules that the Assessing Officer must record objective dissatisfaction under Section 14A(2) of the Income Tax Act before invoking Rule 8D for disallowing expenses related to exempt income like dividends. The Tribunal emphasized that mechanical application of Rule 8D without identifying expenditure relatable to exempt income is invalid, reinforcing procedural safeguards for taxpayers.