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2021 (3) TMI 1174 - HC - Income TaxReopening of assessment u/ 147 - surrender value of pension plan claimed as exempted from tax u/s 10(10D) - as per revenue interest/bonus on premature of surrender of pension plan / annuity plan is not exempted as per the provisions of Section 80CCC(2) or under any other sections of the I.T. Act. - tangible material necessary to reopen an assessment made without scrutiny under Section 143(1) - HELD THAT:- From the reasons assigned by the Revenue it is not clear as to how the basic conditions are not fulfilled so as to even prima facie suggest that the benefit of Section 10(10D) of the Act is not available to the assessee. The only thing, which seems to have weighed heavily with the Revenue, is that the assessee has not offered the amount being the excess sum received over and above the premium paid for tax. In view of this, this amount is nothing, but, bonus, which is otherwise covered under Section 10(10D) of the Act. However, for this amount to be taxable, the Revenue has to prima facie indicate as to which of the conditions of Section 10(10D) of the Act are not fulfilled. In other words, how the amount in question is not exempted under Section 10(10D) The reference to Section 80CCC(2) is thoroughly misconceived for two reasons: first, Section 80CCC deals with annuity plans whereas we are concerned with life insurance policy; secondly, Section 80CCC(2) of the Act makes any sum received by the assessee from the insurer towards contract for any annuity plan, taxable provided premium paid for such plan is claimed as allowable deduction under Section 80CCC(1) of the Act. In the facts of the present case, there is no such averment or findings that the amount of premium paid has been claimed and allowed as deduction under Section 80CCC(1) of the Act. Where the original assessment is without scrutiny i.e. under Section 143(1), even in such cases tangible material is necessary to reopen the assessment.Explanation 2 to Section 147 is more elaborate and cover those cases where the assessments have been completed (called as the scrutiny cases) as well as those cases where no assessments have been completed (called as the nonscrutiny cases). As per the aforesaid Explanation 2, no distinction has been made between the cases where assessment has been made after scrutiny and those cases where no assessment has been made viz. cases where assessment has been made under Section 143(1) only. From the aforesaid Circular of the CBDT, it is quite evident that no distinction under Section 147 is contemplated between the assessment under Section 143(3) called as the scrutiny assessment and the assessment accepted under Section 143(1) called as the nonscrutiny assessment. Therefore, a tangible material is necessary to reopen even an assessment made without scrutiny under Section 143(1) of the Act. Even where the proceedings under Section 147 of the Act are sought to be initiated with reference to an intimation under Section 143(1), the ingredients of Section 147 are required to be fulfilled. Therefore, even in such a case there should exist “reason to believe” that income chargeable to tax has escaped assessment. Hence, in the absence of any tangible material in possession of the Assessing Officer, subsequent to the intimation under Section 143(1), the reopening will not be sustainable. In other words, even an assessment under Section 143(1), in the form of an intimation, cannot be reopened under Section 147 unless some new / fresh tangible material comes into possession of the Assessing Officer, subsequent to the intimation under Section 143(1) of the Act. - Decided in favour of assessee.
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