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TMI Blog2023 (2) TMI 173X X X X Extracts X X X X X X X X Extracts X X X X ..... tion. 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. - R/SPECIAL CIVIL APPLICATION NO. 11251 OF 2019 - - - Dated:- 18-7-2022 - HONOURABLE MR. JUSTICE N.V.ANJARIA AND HONOURABLE MR. JUSTICE BHARGAV D. KARIA MS VAIBHAVI K PARIKH FOR THE PETITIONER MRS KALPANAK RAVAL FOR THE RESPONDENT JUDGMENT PER : HONOURABLE MR. JUSTICE N.V.ANJARIA In the facts of the case, this Special Civil Applic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 31.03.2018 and according to the information, the petitioner had invested Rs. 60,00,000/- in the pension policy which was surrendered and the amount of Rs. 62,04,758/- was received as taxable income by the petitioner. It was alleged that the petitioner had not offered the surrender value of the policy as income in the return of income, as a result of which, the same amount of Rs. 62,04,758/- escaped assessment in the hands of the petitioner for the said assessment year. Petitioner raised objections by letter dated 11.04.2019. The objections were disposed of by the respondent authority on 30.04.2019. 4. Learned senior advocate for the petitioner submitted that resort to Section 147 of the Act for the purpose of reopening of the assessment was permissible provided there was an escapement of income chargeable to tax in the hands of the assessee. It was submitted that the petitioner had not received any amount towards the surrender value of the pension policy, therefore, there was no income received by the petitioner. It was highlighted that the surrender value of the policy was received by assignee Pragnaben and that the policy in question was assigned in the earlier financial year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the I.T. Act, 1961, the surrender value of Rs. 62,04,75/- is required to be taxed in the year of receipt i.e. 2013-14. Further, query letters were also issued by this office on 1.1.2019 and 24.01.2019 requesting the assessee to explain as to whether the surrender value has been offered for taxation. However, the assessee has not furnished reply to the query letters. 5.1 It was further stated, The ADIT (I CI), Surat has reported that assessee has not furnished his source of investment or his balance sheet. Though the assessee has filed her return for the year under consideration, the surrendered policy has not offered for taxation. Thus, I have reason to believe that income to the tune of Rs.62,04,758/- has excaped assessment in the hands of assessee by reason of assessee's failure to disclose fully and truly all the materials facts necessary for assessment for the year under consideration. 5.1.1 It was conveyed that assessee's case falls within Explanation 2(b) of section 147 of the Act, that is, where a return of income has been furnished by the assessee, but no assessment has been made and it is noticed by the assessing officer that the assessee has understate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... annuity plan whether in whole or in part, in any previous year, or (b) as pension received from the annuity plan, an amount equal to the whole of the amount referred to in clause (a) or clause (b) shall be deemed to be the income of the assessee or his nominee, as the case may be, in that previous year in which such withdrawal is made or, as the case may be, pension is received, and shall accordingly be chargeable to tax as income of that previous year. (3) Where any amount paid or deposited by the assessee has been taken into account for the purposes of this section,- (a) a rebate with reference to such amount shall not be allowed under section 88 for any assessment year ending before the 1st day of April, 2006; (b) a deduction with reference to such amount shall not be allowed under section 80C for any assessment year beginning on or after the 1st day of April, 2006. 5.6 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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