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2023 (2) TMI 173 - HC - Income TaxReopening of assessment u/s 147 - Reasons to believe - amount received upon surrender of the pension policy was taxable as income in the hands of the petitioner in view of the provisions of Section 80CCC(2) - HELD THAT:- A plain reading of sub-section (2) of section 80CCC of the Act shows that in case wherein the assessee has claimed deduction under sub-section (1) in respect of payment or deposit in relation to pension policy and subsequently, the assignee received such sum on account of surrender of such policy, in such case, the surrender value would be taxable. In the facts of the present case however, the petitioner had neither claimed any deduction under sub-section (1) of Section 80CCC, nor it is the case of the respondent authority that the petitioner claimed such deduction, even in any of the earlier years to make the surrender value taxable. Neither on facts nor in eye of law, the respondent authority could establish that there was any escapement of income chargeable to tax in the hands of the petitioner on account of the transaction of surrendering of policy in question. As stated above, the policy in question was assigned to third party and said assignee had received the surrender value. The petitioner was sought to be taxed by way of reopening, the amount, which was as such received by third party. This was clearly not permissible in law and there existed no ground to reopen assessment under section 147 of the Act. The satisfaction of the AO that he had reason to believe that the income in the hands of the petitioner-assessee had escaped assessment, was without any foundation in law. By virtue of provisions of Section 80CCC (1) read with 80CCC(2), the petitioner had never claimed any deduction in respect of amount of pension policy to render the pension policy to attract liability of taxability. Reasons and discussions, the petition of the petitioner is entitled to succeed.
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