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2021 (10) TMI 654 - AT - Income TaxExemption u/s 10(10D) on the maturity value of the Keyman Insurance Policy - scope of amendment brought to explanation 1 to section 10(10D) - HELD THAT - We will go through the provisions of section 10(10D) of the Act and also the explanation 1 to this section. The provision of section 10D of the Act which was made it clear that any amount under the LIC policy including bonus would not be taxable - aforesaid provision have certain exceptions as provided in clause (A) which provided that any sum received under keyman insurance policy would not be eligible for exemption. In case of the assessee that an assignment of policy was made on 2.6.2009 and maturity amount was received on 22.2.2015. Now the contention of the A.R. is that amendment brought to explanation 1 to section 10(10D) of the Act by the Finance Act 2013 w.e.f. 1st April 2014 would not be applicable to the assessee s case since the assignment in the case of name of assessee has taken place much prior to the amendment. As discussed earlier section 10(10D) of the Act specifically excluded any sum received under a keyman insurance policy from exemption u/s. 10(10D) of the Act. By Finance Act 2012 w.e.f. 1.4.2013 explanation 1 was inserted explaining the expression Keyman Insurance Policy . Assessee received the amount on maturity of Keyman Insurance Policy after coming into effect of the amended Explanation-1 to section 10(10D) of the Act. The decision relied by assessee may not be of any help to the assessee as there is no retrospective application of the provision. In this view of the matter in our considered opinion the assessee is not eligible to claim exemption under section 10(10D) of the Act on the maturity value of the Keyman Insurance Policy. Valid Notice u/s. 143(2) - transfer of case u/s 127 - notice issued u/s. 143(2) of the Act by ITO Ward-11(1) Belgaum is without jurisdiction and as such the assessment order was framed is ab initio - HELD THAT - Admittedly notice u/s. 143(2) of the Act dated 25.9.2017 was issued by ITO Ward-1(1) Belgaum. However he is not the concerned assessing officer of the assessee and actual assessing officer was ITO Ward-1 Bellary/ACIT Circle-1 Bellary. Being so the notice issued u/s. 143(2) of the Act ITO Ward-1(1) Belgaum is without jurisdiction. Consequently the assessment framed by ACIT Circle-1 Bellary on the basis of such notice issued u/s. 143(2) dated 25.9.2017 by ITO Ward-1(1) Belgaum cannot be sustained - We uphold the objections raised by the Assessee against the validity of the impugned order u/s. 143(3) for AY 2015-16. We accordingly hold that since in the present case no valid notice u/s.143(2) was issued by the AO who held jurisdiction over the case of the Assessee the consequent order passed u/s. 143(3) dated 7.12.2017 was legally unsustainable and therefore is null in the eyes of law and therefore quashed. The assessee accordingly succeeds on the preliminary legal issue raised before us.
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