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TMI Blog2018 (11) TMI 129X X X X Extracts X X X X X X X X Extracts X X X X ..... d:- 31-10-2018 - SHRI G.D.AGRAWAL, VICE PRESIDENT AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER For The Assessee : Shri Ajay Vohra, Sr. Adv., Shri Aditya Vohra, Adv. Arpit Goyal, CA For The Revenue : Shri B.S.Anant, Sr. DR ORDER PER BENCH : 1.0 The assessee is engaged in Life Insurance business. ITA No. 3509/Del/2013 is department s appeal which is preferred against order dated 15.03.2013 passed by the Ld. CIT (Appeals)-I, New Delhi for assessment year 2004-05. In this year the assessment u/s 143(3) of the Income Tax Act, 1961 (hereinafter called the Act ) was completed by the Assessing Officer on 30.11.2006. Subsequently, notice dated 28.03.2011 was issued u/s 148 of the Act for initiating reassessment proceedings and thereafter order u/s 147 read with Section 143(3) of the Act was passed on 09.12.2011. In the reassessment order, the difference between the interest accrued as per the balance sheet (which included interest paid at the time of purchase of securities) and the interest as per the profit and loss account was added to the income of the assessee. The original assessment was completed at a taxable income of ₹ 2,89,55,200/- wherea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions 28 to 43 of the Act but had later filed a revised computation u/s 44 of the Act before the Ld. CIT (A). In this year also the AO had made disallowances which on appeal were deleted by the Ld. CIT (A) and direction was given to the AO to assess income of the assessee as per provisions of Section 44. In this year also the department has challenged the action of the Ld. CIT (A) in issuing such direction. 1.3 ITA No. 5624/Del/2011 is department s appeal preferred against order dated 05.09.2011 passed by the Ld. CIT (A)-I, New Delhi for assessment year 2007-08 and the facts and issues are identical to the facts and issues in assessment year 2005-06 and 2006-07. In this year also the department is challenging the action of the Ld. CIT (A) in directing the AO to compute the income of the assessee in terms of provisions of Section 44 of the Act. 1.4 ITA No. 1347/Del/2013 is the department s appeal for assessment year 2008-09 wherein the department is challenging the order dated 05.12.2012 passed by the Ld. CIT (A)-I, New Delhi wherein the Ld. CIT(A) has issued directions to the AO to compute the income of the assessee u/s 44 of the Act. Thus, this year is also identical in fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal bearing caption No. 3509/Del/2013 for assessment year 2004-05, it was submitted that the Ld. CIT (A) had erred in deleting the various additions made by the AO on merits and the order of the Ld. CIT (A) deserved to be set aside in this case also. It was submitted that the Ld. CIT (A) had ignored the factual findings of the AO and had given relief to the assessee. 3.0 In response, the Ld. Sr. Advocate, Shri Ajay Vohra, appearing on behalf of the assessee, submitted that as far as department s appeal bearing No. 3509/Del/2013 for assessment year 2004-05 was concerned, the appeal deserved to be dismissed outright as the department has challenged the deletion of additions only on merits and has not challenged the quashing of the re-assessment proceedings. It was submitted that the effect of this was that since the reassessment proceedings itself had been quashed by the Ld. CIT (A) and were not under challenge before the ITAT, the order of the Ld. CIT (A) to that extent remained unchallenged and, therefore, the quashing of reassessment proceedings stands accepted by the department and, accordingly, the appeal of the department only on merits becomes mere academic in nature. 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was leviable if the charge was not specific. 4.0 In response, the Ld. Sr. Departmental Representative submitted that the impugned penalty was levied u/s 271(1)(c) of the Act on the difference between the original computed loss and the revised loss computed as per provisions of Section 44 of the Act and, therefore, the penalty had been levied correctly. The Ld. Sr. Departmental Representative submitted that the non-specification of the charge was a mere technical infringement and it did not alter the fact that there was difference between the originally computed loss and the revised computed loss. 5.0 We have heard the rival submissions and have also perused the material available on record. We now take up the appeals one by one: 5.1 ITA no. 3509/Del/2013 A perusal of the order of the Ld. CIT(A) shows that the Ld. CIT(A) has observed in Para 4.3 of the impugned order that even if it was to be assumed that the impugned amount of interest had not been taxed, the revenue audit objection as well as the consequent reassessment proceeding was not on sound legal footing in the absence of finding that the income computed by the assessee was not in accordance with the provisions o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the profit and gains from the life insurance business are to be computed separately from any other business of the assessee. It is also settled position that these provisions are non obstante i.e. they override the other provisions of the Act and, therefore, the income chargeable of tax of an insurance company has to be computed in accordance with provisions thereof. It is also undisputed that initially the assessee had not filed its return/s of income under the correct provisions of the Act but later, during the course of first appellate proceedings, had filed revised computation/s along with additional ground and the Ld. CIT (A) allowed the additional ground in all the years under appeal and restored the appeal to the file of the Assessing Officer with a direction to compute the income of the assessee as per the provisions of Section 44 of the Act. Since it is settled law that Section 44 of the Act over rides other provisions of the Act for the purpose of computation of profit and gains from the life insurance business, we find no reason to interfere with the directions of the Ld. CIT (A) in all the captioned years and we uphold his direction that the income of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he amendment of Section 271 (1 B) with retrospective effect and by virtue of the amendment, the assessing off icer has initiated the penalty by properly recording the satisfaction for the same ? ( 3) Whether on the facts and in the circumstances of the case, the Tribunal was justif ied in deciding the appeals against the Revenue on the basis of notice issued under Section 274 without taking into consideration the assessment order when the assessing off icer has specif ied that the 'assessee has concealed particulars of income? 3. The Tribunal has allowed the appeal f iled by the assessee holding the notice issued by the Assessing Off icer under Section 274 read wi th Section 271(l)(c) of the Income Tax Act. 1961 for short ' the Act') to be bad in law as it did not specify which l imb of Section 271 (l)(c) of the Act: the penal ty proceedings had been initiated i.e., whether for concealment of particulars of income or furnishing of inaccurate particulars of income The Tribunal , while al lowing the appeal of the assessee, has relied on the decision of the Division Bench of this Court rendered, in the case of CIT v. Manjunatha Cotton Ginning Factory [2013] ..... X X X X Extracts X X X X X X X X Extracts X X X X
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