TMI Blog2019 (12) TMI 1037X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT invoking the provision of section 263 can be tested on twin conditions having been satisfied or not an order sought to be revised should be erroneous and prejudicial to the interest of Revenue. In the present case as per the Pr. CIT the assessment order is erroneous and prejudicial to the interest of revenue on the ground that by virtue of the amendment introduced in the Explanation 1 to section 10(10D) inserted w.e.f. 01.04.2014 would also be applicable in the present case as well on the basis that such explanation is clarificatory in nature. The issue related to taxability of such Keyman Insurance policies assigned in favor of Keyman or other individual has been examined has been examined by Hon'ble Delhi High Court in the case of CIT vs. Rajan Nanda [ 2014 (1) TMI 249 - ITAT DELHI] holding them to be exempted u/s.10(10D). In view of this binding precedence we do not find any fault with the assessment order as the assessing officer has taken a view expressed by the Hon'ble Delhi High Court which was law of the land. Pertaining to the assessment year under appeal no view was expressed by any of the authority or the court that the clarification was introduced by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 - Shri Kul Bharat, Judicial Member And Shri Manish Borad, Accountant Member For the Assessee : S/Shri Sumit Nema Shri GaganTiwari, ARs For the Revenue : Shri S.S. Mantry, CIT-DR ORDER PER MANISH BORAD, AM The above captioned appeals filed at the instance of the different assessee(s) pertaining to Assessment Year 2015-16 are directed against the orders of Pr.Commissioner of Income Tax-2 (in short Pr.CIT ] Indore dated 21.12.2018 24.12.2018 passed u/s 263 of the Income Tax Act 1961(In short the Act ). 2. Assessee(s) haveraised following grounds of appeals; ITA No.150/Ind/2019 in case of Smt. HarleenKaur Bhatia 1(a) That, on the facts and in the circumstances of the case, the learned Pr. CIT grossly erred in invoking the provisions of section 263 of the Income-Tax Act, 1961 in the appellant's case without considering the material fact that the Assessment Order passed by the learned Assessing Officer was neither erroneous nor prejudicial to the interest of the Revenue. l(b) That, the learned Pro C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had brought on record all the materials and evidences relating to the concerning issue and the same were duly verified by the AO after proper application of his mind. 2.That, without prejudice to the above, the learned Pr.CIT has grossly erred in giving a direction to the AO to assess the income in the hands of the assessee on account of maturity receipts of the Keyman Insurance Policy amounting to ₹ 7,29,49,460/- and as also, to examine the treatment of the insurance premiums paid by Shri Amandeep Singh Bhatia, on behalf of the appellant, after the assignment of the policy to the appellant. 3.That, the learned Pr. CIT grossly erred in assuming the jurisdiction under s.263 of the Act without considering and appreciating the material fact that during the course of the assessment proceedings, the appellant had duly furnished the necessary particulars and explanation in respect of the subject issue by way of a note while filing her return of income for the relevant assessment year which was duly examined and verified by the learned AO before passing the Assessment Order in the case of the appellant. 4. That, Ld. Pr. CIT gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... February 2015 and the amount was received from LIC of India. Assessee claimed it as an exempted receipt. Assessee s case was selected for scrutiny assessment and Ld. Assessing officer after conducting necessary enquiry accepted the claim of assessee. Subsequently Ld. Pr. CIT on examining the transaction in light of the amendment brought in by Finance Act 2013 effective from 01.04.2014 in Explanation 1 to section 10(10D) of the Act was of the view that this amendment is clarificatory in nature and the entire amount received on maturity is liable to tax. Ld. Pr. CIT, issued show cause notice u/s 263 of the Act calling upon the assessee as to why assessment order should not be revised and the maturity amount of Insurance Policy referred above be subjected to tax. In response to the notice assessee filed a detailed submissions placing reliance on various judgments but the same was not found acceptable. Ld. Pr. CIT. after recording detailed finding, discussing the issues on merits as well as the legal aspect decided to set aside the assessment order and directed the AO to make afresh assessment order in accordance with law. 5. Aggrieved by this the assessee is in appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was assigned prior to assessment year 2014-15. Ld. counsel for the assessee also submitted that Ld. Pr. CIT wrongly assumed the jurisdiction u/s 263 of the Act even when detailed inquiry was conducted by the Ld. AO for the issue raised in the show cause notice issued by the Ld. Pr. CIT and order u/s 263 of the Act deserves to be quashed. Reliance place on following judgments: 1. Malabar Industrial Co. Ltd. vs. CIT, 243 ITR 83 (SC) 2. Abhishan Entereprises Vs CIT (2016) 28 ITJ 139 (Trib.-Indore) 3. M/s Gupta Spinning Mills vs. CIT in ITANo.3398/Del/2010 4. CIT vs. Max India Ltd. 295 ITR 282 (SC) 5. CIT vs. Gabriel India Ltd. (1993) 203 ITR 108(Bom) 6.CIT vs. R.K. Construction Co. 313 ITR 65 (Gujarat) 7. CIT vs. Arvind Jewellers (2003) 259 ITR 502(Gujarat) 8.CIT vs. Sunbeam Auto Ltd. (20100 189 Taxman 436 (Del) 8. With regard to the contention that the amendment brought in Finance Act 2013 in Explanation (1) to section 10(10D) is prospective in nature, assessee relied following judgments: 1. Nirmal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r or Principal Director General or Director General or Principal Commissioner or Commissioner authorised by the Board in this behalf under section 120; (b) record shall include and shall be deemed always to have included all records relating to any proceeding under this Act available at the time of examination by the Principal Commissioner or Commissioner; (c) where any order referred to in this sub-section and passed by the Assessing Officer had been the subject matter of any appeal filed on or before or after the 1st day of June, 1988, the powers of the Principal Commissioner or] Commissioner under this sub-section shall extend and shall be deemed always to have extended to such matters as had not been considered and decided in such appeal. Explanation 2.-For the purposes of this section, it is hereby declared that an order passed by the Assessing Officer shall be deemed to be erroneous in so far as it is prejudicial to the interests of the revenue, if, in the opinion of the Principal Commissioner or Commissioner,- (a) the order is passed without making inquiries or verification which should have been m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e may justify including an order enhancing or modifying the assessment or cancelling assessment and directing a fresh assessment or make such enquiries as he deems necessary. iv. Under the provisions of section 263 of the Act Pr. CIT/CIT can enhance or modify the assessment as a result of inquiry conducted and hearing of the assessee. 12. It is well settled law that for invoking the provisions of section 263 of the Act both the conditions that the order must be erroneous and prejudicial to the interest of revenue needs to be satisfied. This ratio stands laid down by various Hon'ble Courts. 13. Hon'ble Jurisdictional High Court of Madhya Pradesh in the case of H.H. Maharaja Raja Power Dewas (1983) 15 Taxman 363 in para 10 of this order held that However, the first argument, viz., that an assessment order without compliance with the procedure laid down in section 144B is erroneous but not prejudicial to the interests of the revenue conferring revisional jurisdiction on the Commissioner under section 263(1), has force. Under section 263(1) two pre-requisites must be present before the Commissioner can exercise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd assessee passed resolution to that effect - Assessee showed this receipt as agricultural income - Resolution passed by assessee was not placed before Assessing Officer - Assessing Officer accepted entry in statement of account filed by assessee and accepted same - Commissioner under section 263 held that said amount was not connected with agricultural activities and was liable to be taxed under head 'Income from other sources' - Whether, where Assessing Officer had accepted entry in statement of account filed by assessee, in absence of any supporting material without making any enquiry, exercise of jurisdiction by Commissioner under section 263(1) was justified - Held, yes 15. Hon ble Gujarat High Court in the case of Smt. Minalben S. Parikh [1995] 215 ITR 81 order pronounced on 17.10.1994 Para 12 From the aforesaid, it can well be said that the well-settled principle in considering the question as to whether an order is prejudicial to the interests of the revenue or not is to address oneself to the question whether the legitimate revenue due to the exchequer has been realised or not or can be realised or not if his orders under consideration ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the instant case in the light of the ratio laid down by Hon'ble Courts so as to examine firstly whether the assessment order passed by the Ld. AO is erroneous in nature and secondly whether it is prejudicial to the interest of revenue. 18. Firstly, in order to examine that whether the assessment order is erroneous, we observe that Ld. Pr. CIT within the powers provided in section 263 of the Act issued following show cause notice to the assessee. Please refer to the assessment order dated 15.12.2017 for A.Y. 2015-16 in your case. On perusal of case record in your case for the A.Y. 2015-16 it is noted that you have furnished your return of income declaring total income at ₹ 78,390/- on 31.03.2016. Assessment in your case u/s 143(3) of I.T. Act 1961 was completed by the ITO-5(3), Indore vide order dated 15.12.2017 assessing total income at ₹ 78,390/-. The entire records were gone through by me and on perusal and examination of records it appears that the order dated 15.12.2017 for A.Y. 2015-16 is erroneous as also prejudicial to the interest of revenue on account of passing of the order without ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed by the AO appears to be erroneous in so far as it is prejudicial to the interest of the revenue. You are, therefore the required to show cause why provision of section 263 be not invoked in your case for the reasons mentioned above. 19. In response to the above notice the sole issue was with regard to the maturity amount received on the insurance policy by the assessee which was originally taken as a Keyman Insurance Policy by Bhatia International Ltd but subsequently assigned to the Keyman i.e. Director, Amandeep Singh Bhatia on 23.02.2012 and further Mr. Amandeep Singh Bhatia assigned policy to his wife Smt. Harleen Kaur Bhatia on 30.01.2013. Foremost it is to be seen that whether this issue of taxability of maturity proceeds of the insurance policy came up before the Ld. AO and whether he conducted sufficient enquiry with regard to this issue. 20. Records show that with the computation of income filed along with return of income on 31.03.2016 assessee gave a detailed note about the amount received from maturity of Insurance Policy which was originally taken as a Keman Insurance Policy which reads as follows: During the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hold that the maturity receipts of the Keyman Insurance Policy are taxable in the hands of assessee and directed the Ld. Assessing Officer to reassess the assessee s income observing as follows: I have carefully considered the facts of the case, the assessment records and the written submission given by the assessee. It is noted that the case was selected for complete scrutiny through CASS and the reason for selection were mentioned as high ratio of refund to TDS, delayed payment of tax and ITR filed late and large refund claimed out of the self-assessment tax. The records show that the assessee has received payment on account of maturity of an insurance policy on which the tax has been deducted by the insurance company at the time of payment of maturity proceeds. The policy was a keyman insurance policy which as assigned to the husband of the assessee namely ShriAmandeep Bhatia by the employer namely Bhatia International Ltd. in the month of March, 2012. Shriamandeep Singh Bhatia later on assigned the policy to the assessee on 30.01.2013. The Policy was encashed before maturity in the month of February 2015 whereas the actual date of maturity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee for showing a gift of the policy the receipt of which was taxable. The Assessing Officer therefore committed an error by not pursuing the enquiries regarding the policy maturity and accepting the version of the assessee without application of mind. He did not go through the provision of section 10(10D) properly and wrongly accepted the claim of the assessee. The policy was matured after 01.04.2014 and the receipt was clearly taxable as per provision of section 10(10D). There is no question of any other view except bringing the amount to tax. The Assessing Officer therefore, wrongly applied the provisions of law. The assessee relied on the judgment of Bombay High Court in the case of Prashant J. Agarwal 243 Taxman 119 and the same was accepted by the Assessing Officer which was incorrect. In the judgment the assessee had received the maturity amount during financial year 2009-10 relevant to Assessment year 2010-11. The assessment was passed by the Assessing Officer after the amendment was brought in the Act. The court has held that any receipt of maturity amount prior 01.04.2014 would not be accepted by the amended ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whole pretention of assigning of the policy is merely to avoid the taxability of the maturity proceeds. It would not be out of place to reproduce the Explanation 1 to section 10(10D) of the Income Tax Act which read as under: Explanation 1. For the purpose of this clause, Keyman insurance policy means a life insurance policy taken by a person on the life of another person who is or was the employee of the first mentioned person or is or was connected in any manner whatsoever with the business of the first mentioned persona and included such policy which has been assigned to a person, at any time during the term of the policy, with or without any consideration Emphasis supplied) The phrase and included such policy has been introduced by the Finance Act 2013 and effective from 01.04.2014. Here, it would also be useful to reproduce the relevant extract of the explanatory notes to the finance Act 2015:- 5. Keyman insurance policy 5.1 The provision of clause 10(D) of section 10 of the Income Tax Act, 1961 before amendment by the Act, inter alia, exempt any sum received under a life insur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing from page 16 to para 19 of the impugned order . Thereafter, the Ld. Pr. CIT treated the amendment in Explanation (1) section 10(10D) of the Act as curative and merely declaratory in nature, placing reliance on following judgment: 1. Gold Coin Health Food (P). Ltd. 304 ITR 308 (SC) 2. Reliance Jute Industries ltd. (1979) 120 ITR 931 (SC) 3. Poddar Cement P. Ltd. (1997) 5 SCC 482 4. AnujJayendra Shah, vs. PCIT-35, Mumbai (67 Taxman.com 38) 23. Ld. Pr. CIT also discussed the legal position of power of Commission for revision u/s 263 of the Act referring to the judgment of Kolkata Tribunal in the case of Subhlakshmi Vinijya(P.) Ltd. 172 TTJ 721(KOL).Thereafter the Pr. CIT placed reliance on the following judgments: 1. CIT vs. Amitabh Bachchan (2016) 384 ITR 200 (Hon'ble Supreme Court) 2. Toyota Motor Corpn. (2008) 174 Taxman 395 (Delhi) Affirmed in (2008) 173 Taxman 458 (SC) 3. Jagdish Kumar Gultai (2204) 139 Taxman 369 (All.) 4. Malabar Industrial Co. Ltd. (2000) 109 Taxman 66 (SC) 5. Crompt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. 2.1. Where are enclosing here with policy copy along with assignment clause as required by you. Encl. No.28 to 31 2.2 We are also enclosing here with assignment letter issued by the Life Insurance Corporation of India in favour of assessee. Encl. NO.32 to 32 Letter dated 23.10.2017( Annexure A/8 of PAPER BOOK filed on 07.05.2019) 01] This is in continuation to our exemption claim in the return file for the above relevant year. As the return is not comprised of all the relevant evidentry documents at the time of filing of regular return therefore for facilitate scrutiny proceedings. We are enclosing here with copy of computation of total income , acknowledgement along with all necessary evidentry document in support of our exemption claim u/s 10(1OD). Encl. No. 33 to 35. 02] You honour is asked to submit the complete details of LIC Assignment in favor of beneficiaries as well as also asked to submit relevant documents. 2.1 We are enclosing here with assignment letter issued by the Life Insurance Corporation of India in favor of beneficiary along with related docum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , they got converted into ordinary policy as assignment was accepted by LIC. For this proposition we may derive support from the decision of Hon'ble Delhi High Court in CIT vs. Rajan Nanda [2012] 18 taxmann.com 98 (Delhi)) . Later dated 17.11.2017 (Annexure A/10 of PAPER BOOK filed on 07.05.2019) 01] Your honour is asked to submit the details of share purchase during the year along with source of investments. 1.1] Statement giving details of the shares purchase along with source of Investment is enclosed. Encl No.61 1.2] Copy of relevant pages of bank statement of assessee duly highlighting the payment of shares purchase is enclosed. Encl No.62 to 63. 1.3] Copy of share certificate is enclosed. Encl. No.64. 25. The various replies submitted by the assessee during the course of assessment proceedings u/s 143(3) of the Act mentioned above duly supported by documentary evidences were intended to convince the Ld. Assessing Officer that the Keyman Insurance Policy taken by the Company namely BIC were assigned to the Mr.A.S. Bhatia thereby the company offered surrender ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... putation of income, replies dated 15.06.2017, 09.10.2017, 23.10.2017 and 17.11.2017 and various judicial pronouncements Ld. AO formed the opinion that the said claim of the assessee is bonafide. Thus, looking to the facts of the case we are of the view that sufficient and adequate enquiry was conducted by the Ld. AO before accepting that the proceeds from prematurity of alleged life insurance policy are exempt from tax and thus the assessment order passed u/s. 143(3) of the Act, by no stretch can be held to be erroneous in nature. 27. Now we move on to examine as to whether the assessment order is prejudicial to the interest of revenue. Issue relates to taxability of proceeds of a LIC policy which before assignment was originally a keyman Insurance Policy. 28. Key man insurance policies are life insurance policies taken by a company on the life of some of its keyperson. As per Paragraph 14 of Explanatory Notes to the Finance (No. 2) Act, 1996 issued by Central Board of Direct Taxes (Circular No. 762, dated February 18, 1998 ([1998] 230 ITR (St.) 12)) akeyman insurance policy of the LIC of India means an insurance policy taken by a business organisa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by that person. No deduction is allowed as business expenditure in the hands of the organisation in respect of premium paid after assignment. When the policies is assigned to the employee then surrender value received from the assignee i.e. employee will be taxed in the hands of the employer u/s 10(10D)(b) of the Act. Therefore, at the time of assignment if the surrender value of the policy is much less as compared to the total amount of premium paid by the organisation, then the surrender value received from the individual (keyman) will be taxable in the hands of the organization as held in the case of ( Dr. NareshTrehan v. DCIT [2014] 48 taxmann.com 21 (Delhi - Trib.)) 31. In case of other persons to whom policies are assigned, which is actually the case we are dealing in the instant appeal, the organisation will be taxed on the surrender value received from that assignee (even though it may be less than the premium paid by the organisation) which in this case has been done by BIL offering the surrender value of policies on the date of assignment to tax . 32. In the instant case at the time when the policies were taken, the nature of the polici ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the insurance. 33. Following this decision the ITAT in DCIT v. Rajan Nanda [2013] 37 taxmann.com 335 (Delhi - Trib.)held as under: 9. Thus, the Hon'ble High Court has effectively held in favour of the assessee to the effect that once there is assignment of the employer in favour of the individual, the character of the insurance policy changes and it gets converted into an ordinary policy; that such assignment is duly permitted by law; that even the LIC accepted the assignment, itself clarifying that on assignment, the policy no longer remains a Keyman Policy and gets converted into an ordinary policy; that as such, it is not open to the Department to still allege that the policy is a Keyman Policy and when it matures, the advantage drawn there from is taxable; that on maturity of the policy, it is not the employer, but the individual, who is getting the maturity value of the insurance; that no doubt, the employer as well as the individual take huge benefit by such assignment, but it cannot be treated as a case of tax evasion, rather it is a case of arranging the affairs in such a manner as to avail the state exemption as provided in Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsurance policy. Explanation 1 to the said clause (10D) defines a keyman insurance policy to mean a life insurance policy taken by a person on the life of another person who is or was the employee of the first-mentioned person or is or was connected in any manner whatsoever with the business of the first-mentioned person. 5.2 It has been noticed that the policies taken as keyman insurance policy are being assigned to the keyman before its maturity. The keyman pays the remaining premium on the policy and claims the entire sum received under such policy as exempt on the ground that the policy is no longer a keyman insurance policy. 5.3 The exemption under section 10(10D) is claimed for policies which were originally keyman insurance policies but during the term these were assigned to some other person. The Courts have also noticed this loophole in law. 5.4 With a view to plug the loophole and check such practices to avoid payment of taxes, the provisions of clause (10D) of section 10 of the Income Tax Act, 1961 have been amended to provide that a keyman insurance policy which has been assigned to any person during its term, wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the tax law that the law to be applied is that in force in the assessment year unless otherwise provided expressly or by necessary implication. The above rule applies to the charging section and other substantive provisions such as a provision imposing penalty and does not apply to machinery or procedural provisions of a taxing Act which are generally retrospective and apply even to pending proceedings. But a procedural provision, as far as possible, will not be so construed as to affect finality of tax assessment or to open up liability which had become barred. Assessment creates a vested right and an assessee cannot be subjected to reassessment unless a provision to that effect inserted by amendment is either is either expressly or by necessary implication retrospective. A provision which in terms is retrospective and has the effect of opening up liability which had become barred by lapse of time, will be subject to the rule of strict construction. In the absence of a clear implication such a legislation will not be given a greater retrospectivity than is expressly mentioned; nor will it be construed to authorize the Income tax Authorities to commence proceedings which, befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mb.) :Irrespective of the language in which amending provisions are couched, an amendment cannot be retrospective with effect from a date earlier to the date on which the provision sought to be amended itself was brought on the statute book. 41. In the case of Saurastra Agencies Pvt. Ltd. Vs. Union of India (1990) 186 ITR 634 (Cal) :Rule is against retrospectively. Unless provided in the statute, the law is always presumed to be prospective in nature. There cannot be any implicit inference of any retrospective operation of law. The retrospective operation must be clear and unambiguous. 42. The expression such in the added portion and includes such policy which has been assigned to a person, at any time during the term of the policy, with or without any consideration is significant. This word indicates those policies which were keyman insurance policies at the time of assignment. Any policy which was assigned prior to 01-04-2014 will no longer remain keyman insurance policies as it has become an ordinary policy after the assignment in view of Rajan Nanda s case (supra). The amendment will alter the character of only those ordina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es were claiming exemption of the maturity proceeds of Keyman Insurance Policy which were assigned to other person. Same is the situation in the case of the assessee in the instant appeal wherein the policy was assigned in her favour on 30.01.2013 from her husband which was originally taken as a keyman insurance policy by Bhatia International Company. Since the assignment in favour of assessee duly recorded by LIC happened before the effective date of amendment in explanation 1 to section 10(10D) of the Act the same will have no adverse effect on the assessee and the alleged amount received on prematurity of insurance policy will be exempted. Though Ld. Pr. CIT has questioned about the source of premium paid by the assessee for the insurance policy, in our view there is hardly any effect on the fate of the case if the premium is paid by assessee s husband as a gift or it is paid by assessee herself. Even otherwise Hon'ble Delhi High Court in the case of CIT vs. Rajan Nanda (Supra)has already adjudicated this issue in detail and the same is squarely applicable on the facts of the assessee so much so that the policy assigned in favor of assesee was an ordinary life insurance poli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and shall only apply on the keyman insurance policy assigned after 01.04.2014. Even otherwise it has been submitted before us that has the policy been not assigned by the company to its Keyman and maturity proceeds offered to tax by the company , their would have been no loss to revenue as the company had huge losses much above the maturity proceeds during the Assessment Year 2015-16. 47. Though Ld. Pr. CIT in the impugned order has referred to various judgments on merits as well as legality of the case but in our considered view they are not squarely applicable on the facts of the instant case and thus have no applicability on the issues raised before us. 48. Action of the Ld. Pr. CIT invoking the provision of section 263 can be tested on twin conditions having been satisfied or not an order sought to be revised should be erroneous and prejudicial to the interest of Revenue. In the present case as per the Pr. CIT the assessment order is erroneous and prejudicial to the interest of revenue on the ground that by virtue of the amendment introduced in the Explanation 1 to section 10(10D) inserted w.e.f. 01.04.2014 would also be applicable in the prese ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assignment of policy in favour of the keyman Mr. A.S. Bhatia was in October 2010 and thereafter assignment recorded by the LIC in favour of the assessee on 30.01.2013 were much before the amendment brought in the Explanation 1 to section 10(10D) of the Act effective from 01.04.2014 and thus Ld. Assessing officer was justified in accepting the claim of the alleged receipts as exempted income u/s 10(10D) of the Act. 50. Therefore, since twin conditions which are mandatorily required to be fulfilled by Ld. Pr. CIT before passing the order u/s 263 of the Act remains unfulfilled as the order of the Ld. AO is neither erroneous nor prejudicial to the interest of Revenue. We, therefore, are of the view that Ld. Pr. CIT was not correct in law in exercising the jurisdiction u/s 263 of the Act and cancelling the assessment. We, accordingly quash the impugned order passed u/s 263 of the Act dated 21.12.2018 and restore the assessment order passed u/s 143(3) of the Act on 13.12.2017. Thus, all grounds of appeal raised by the assessee in the case of HarleenKaur Bhatia in ITANo.150/Ind/2019 for A.Y. 2015-16 stands allowed. Now we take up appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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