TMI Blog2013 (8) TMI 664X X X X Extracts X X X X X X X X Extracts X X X X ..... favor of assessee. - ITA No.6366/Mum/2011 - - - Dated:- 11-7-2013 - I P Bansal and N K Billaiya, JJ. For the Appellant : Shri F V Irani Shri Manoj Purohit For the Respondent : Shri Girija Dayal ORDER:- PER : N K Billaiya This appeal by the assessee is directed against the order of the Ld. CIT-1, Mumbai dt.8.3.2011 passed u/s. 263 of the I.T. Act pertaining to A.Y. 2006-07. 2. Facts of the case are that the assessee is a Public Limited company incorporated under the Companies Act, engaged in the business of Life insurance. The company is owned by State Bank of India and BNP Paribas Assurance. The assessment for the year under consideration was completed u/s 143(3) vide order dt. 29.12.2008. The assessment was completed on a total income of Rs. 93,13,35,040/- against the returned loss of Rs. 29,35,848/-. While computing the assessed income, the Assessing Officer allowed exemption u/s. 10(34) of the Act in respect of dividend income to the tune of Rs. 2,49,31,503/-. The CIT invoking the powers given to him u/s. 263 of the Act was of the firm belief that the order of the AO is pre-judicial to the interest of the Revenue to the extent of exemption so granted b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ideration are similar to the facts of ICICI Prudential Insurance (supra), decided by the coordinating Bench. Here, we would also like to mention that Hon ble Jurisdictional High Court in case of GIC of India has discussed and decided the issue as under: 11. Section 44 of the Income Tax Act, 1961 stipulates as follows: 44:Notwithstanding anything to the contrary contained in the provisions of this Act relating to the computation of income chargeable under the head interest on securities , Income from house property , Capital gains or Income from other sources , or in section 199 or in sections 28 to (43B), the profits and gains of any business of insurance, including any such business curried on by a mutual insurance company or by a cooperative society, shall be computed in accordance with the rules contained in the First Schedule . Section 44 provides that the profits and gains of any business of insurance of a mutual insurance company shall be computed in accordance with the rules in the First Schedule. Part A of the First Schedule containing Rules I to 4 deals with profits of life insurance business while Part B consisting of Rule 5 deals with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct. The argument of Mr. Kolah for the Life Insurance Corporation is that unless there are express provisions which disable the Corporation from claiming the deductions referred to above; the Corporation cannot be deprived of the benefit -of the provisions referred to in the questions Nos. 1 to 6. Section 44, which deals with computation of profits and gains of business of insurance, begins with a non obstante clause, the effect of which is that the provisions of the Act relating to the computation of income chargeable under the head Interest on securities , Income from house property Capital gains Or Income from other sources , do not apply in the case of computation of income from insurance business. The effect of the non-obstante clause so far as the earlier part of section 44 is concerned, therefore, is that the provisions of section 44 will prevail notwithstanding the fact that there are contrary provisions in the Act relating to computation of income chargeable under the four heads mentioned in section 44. The only other overriding effect of section 44 is that its provisions operate notwithstanding the provisions of section 191 and of section 28 to 43A. Thus, the only ef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operation. In that context the Division Bench held as follows: It is only after the profits and gains of a business are computed that any question of granting exemptions arises and if the latter stage were intended to be excluded by the law we should have thought that a clearer provision than is made in sub-section (7) of section 10 and in rule 6 would have been made . In the subsequent judgment of the Division Bench in CIT v. Insurance Corporation(supra), the Division Bench noted that there was a difference in the language of section 10(7) of the Act of 1922 when compared with section 44 of the Act of 1961 since section44 does not refer to the computation of tax but merely to the computation of profits and gains in the business of insurance The Division Bench held that this would however riot make any difference to- the principle laid - - - - --down by the Court in the earlier decision in the case of New India Assurance Co. Ltd. Accordingly, the decision of Life Insurance Corporation (Supra)could not have- been ignored by the Assessing- Officer on the supposition that the decision was rendered in the context of an assessee who carried on life insurance business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Assessing Officer in allowing the benefit of the exemption in the order of assessment under section 143(3) specifically relied upon the view taken by the CBDT in its communication dated 21 February 2006 to the Chairman of IRDA. The communication clarifies that the exemption available to any other assessee under any clauses of section 10 is also available to a person carrying on non-life insurance business subject to the fulfillment of the conditions, if any, under a particular clause of section 10 under which exemption is sought. It needs to be emphasized that it is not the case of the Assessing Officer that the assessee had failed to fulfill the condition which attached to the provisions of the relevant clauses of section 10 in respect of which the exemption was allowed. This of course is apart-from clause (38) of section 10 where the Assessing Officer had rejected the claim for exemption in the original order of assessment under section 143(3). The Assessing Officer above all was bound by the communication of the CBDT. Having followed that in the order under section 143(3) he could not have taken a different view while purporting to reopen the assessment. Having applied his min ..... X X X X Extracts X X X X X X X X Extracts X X X X
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