Disallowance under section 14A read with rule 8D where no income is earned. Amendment in Section 14A vide Finance Act, 2022 mandating disallowance even if no exempt is earned - is this retrospective or only prospective?

Facts:

Assessee did not earn any exempt income nonetheless they were subject to disallowance under section 14A read with rule 8D. Plea of the assessee was that when no exempt income was earned no disallowance was warranted and the amendment insertion of explanation in the law vide Finance act, 2022 and the non-obstante clause in the said section is only prospective thus cannot apply to the subject assessment year.

Held in favour of the assessee that no disallowance under section 14A is not applicable if no exempt income was earned. Amendments of Finance Act, 2022 in Section 14A is only prospective.

Applied:

Cheminvest Ltd. v. CIT: (2015) 378 ITR 33 (Delhi) : 2015 TaxPub(DT) 3520 (Del-HC)

PCIT v. M/s Era infrastructure (India) Ltd. (2022) 288 Taxman 384 (Delhi) : 2022 TaxPub(DT) 4907 (Del-HC)

Case: Mukand Engineers Ltd. v. Asstt. CIT 2023 TaxPub(DT) 4987 (Mum-Trib)