Pr Commissioner Of Income Tax-2 vs M/S Exide Life Insurance Company ...
2022 Latest Caselaw 4783 Kant

     IN THE HIGH COURT OF KARNATAKA AT BENGALURU

        DATED THIS THE 15TH DAY OF MARCH, 2022

                       PRESENT

          THE HON'BLE MRS.JUSTICE S.SUJATHA

                         AND

THE HON'BLE MR. JUSTICE SHIVASHANKAR AMARANNAVAR
                   I.T.A.No.294/2021
                          C/W
     I.T.A. Nos. 308/2021, 309/2021, 310/2021 &
                        311/2021

IN ITA 294/2021
BETWEEN :

1.     PR.COMMISSIONER OF
       INCOME TAX-2
       BMTC COMPLEX,
       KORAMANGALA
       BANGALORE.
2.     THE ASSISTANT COMMISSIONER
       OF INCOME TAX ,CIRCLE (2) (1)(1),
       BANGALORE, BMTC COMPLEX
       KORAMANGALA, BENALURU.

                                      ...APPELLANTS

(BY SRI. SANMATHI E I., ADV.)

AND

M/S EXIDE LIFE INSURANCE COMPANY LTD
NO 3/1, 3RD FLOOR
                       2




J P TECHNO PARK
MILLERS ROAD
BENGALURU 560001

                                  ...RESPONDENT

(BY SRI. T. SURYANARYANA, SENIOR COUNSEL,
A/W SMT. TANMAYEE RAJKUMAR, ADV.)

     THIS INCOME TAX APPEAL IS FILED UNDER
SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT
OF ORDER DATED 27/07/2021 PASSED IN ITA
NO.839/BANG/2019, FOR THE ASSESSMENT YEAR
2013-2014. PRAYING TO DECIDE THE FOREGOING
QUESTION OF LAW AND/OR SUCH OTHER QUESTIONS
OF LAW AS MAY BE FORMULATED BY THE HON'BLE
COURT AS DEEMED FIT AND ETC.

IN ITA 308/2021
BETWEEN :

1.   PR COMMISSIONER OF INCOME TAX-2
     BMTC, COMPLEX, KORAMANGALA
     BANGALORE.
2.   THE ASSISTANT COMMISSIONER
      OF INCOME TAX
     CIRCLE 1, LTU, BMTC
     BANGALORE, BMTC COMPLEX
     KORMANGALA, BENGALURU.
3.   THE DEPUTY COMMISSIONER OF INCOME TAX
      LTU, CIRCLE-1, BANGALORE.
                                ...APPELLANTS
(BY SRI. SANMATHI E I., ADV.)
                        3




AND

M/S.EXIDE LIFE INSURANCE COMPANY LTD
(FORMERLY KNOWN AS
ING VYSYA LIFE INSURANCE COMPANY LTD)
NO 3/1, 3RD FLOOR
J P TECHNO PARK, MILLERS ROAD
BENGALURU 560001
PAN AAACI7940L.
                                 ...RESPONDENT

(BY SRI. T.SURYANARAYANA, SENIOR COUNSEL A/W
SRI. TANMAYEE RAJKUMAR, ADV.)

     THIS INCOME TAX APPEAL FILED UNDER
SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT
OF ORDER DATED 03/02/2021 PASSED IN ITA NO.
838/BANG/2019, FOR THE ASSESSMENT YEAR 2012-
2013. PRAYING COURT TO (1) DECIDE THE
FOREGOING QUESTION OF LAW AND / OR SUCH
OTHER QUESTIONS OF LAW AS MAY BE FORMULATED
BY THE HON'BLE COURT AS DEEMED. FIT AND ETC.

IN ITA 309/2021
BETWEEN :

1.    PR COMMISSIONER OF INCOME TAX-2
      BMTC, COMPLEX, KORAMANGALA
      BANGALORE.

2.    THE ASSISTANT COMMISSIONER OF
       INCOME TAX
      CIRCLE 1, LTU,
      BANGALORE, BMTC COMPLEX
      KORMANGALA, BENGALURU.
                        4




3.   THE DEPUTY COMMISSIONER OF INCOME TAX
      LTU, CIRCLE-1
      BANGALORE.
                                ...APPELLANTS
(BY SRI. SANMATHI E I., ADV.)

AND

M/S.EXIDE LIFE INSURANCE COMPANY LTD
(FORMERLY KNOWN AS
ING VYSYA LIFE INSURANCE COMPANY LTD)
NO 3/1, 3RD FLOOR
J P TECHNO PARK, MILLERS ROAD
BENGALURU 560001
PAN AAACI7940L.
                                 ...RESPONDENT

(BY SRI. T.SURYANARAYANA, SENIOR COUNSEL A/W
SRI. TANMAYEE RAJKUMAR, ADV.)

     THIS INCOME TAX APPEAL FILED UNDER
SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT
OF ORDER DATED 03/02/2021 PASSED IN ITA NO.
1297/BANG/2016, FOR THE ASSESSMENT YEAR 2011-
2012. PRAYING COURT TO (1) DECIDE THE
FOREGOING QUESTION OF LAW AND / OR SUCH
OTHER QUESTIONS OF LAW AS MAY BE FORMULATED
BY THE HON'BLE COURT AS DEEMED. FIT AND ETC.

IN ITA 310/2021
BETWEEN :

1.    PR. COMMISSIONER OF INCOME TAX-2
      BMTC, COMPLEX, KORAMANGALA
      BANGALORE.
                       5




2.    THE ASSISTANT COMMISSIONER
       OF INCOME TAX
      CIRCLE 1, LTU
      BANGALORE, BMTC COMPLEX
      KORMANGALA, BENGALURU.

3.   THE DEPUTY COMMISSIONER OF INCOME TAX
      LTU, CIRCLE-1
      BANGALORE.
                                ...APPELLANTS
(BY SRI. SANMATHI E I., ADV.)

AND

M/S.EXIDE LIFE INSURANCE COMPANY LTD
(FORMERLY KNOWN AS
ING VYSYA LIFE INSURANCE COMPANY LTD)
NO 3/1, 3RD FLOOR
J P TECHNO PARK, MILLERS ROAD
BENGALURU 560001
PAN AAACI7940L.
                                 ...RESPONDENT

(BY SRI. T.SURYANARAYANA, SENIOR COUNSEL A/W
SRI.TANMAYEE RAJKUMAR, ADV.)

     THIS INCOME TAX APPEAL FILED UNDER
SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT
OF ORDER DATED 03/02/2021 PASSED IN ITA NO.
1296/BANG/2016, FOR THE ASSESSMENT YEAR 2011-
2012. PRAYING COURT TO (1) DECIDE THE
FOREGOING QUESTION OF LAW AND / OR SUCH
OTHER QUESTIONS OF LAW AS MAY BE FORMULATED
BY THE HON'BLE COURT AS DEEMED. FIT AND ETC.
                       6




IN ITA 311/2021
BETWEEN :

1.    PR. COMMISSIONER OF INCOME TAX-2
      BMTC, COMPLEX, KORAMANGALA
      BANGALORE.

2.    THE ASSISTANT COMMISSIONER
      OF INCOME TAX
      CIRCLE 1, LTU, BMTC
      BANGALORE, BMTC COMPLEX
      KORMANGALA, BENGALURU.

3.   THE DEPUTY COMMISSIONER OF INCOME TAX
      LTU, CIRCLE-1
      BANGALORE.
                                ...APPELLANTS
(BY SRI. SANMATHI E I., ADV.)

AND

M/S.EXIDE LIFE INSURANCE COMPANY LTD
(FORMERLY KNOWN AS
ING VYSYA LIFE INSURANCE COMPANY LTD)
NO 3/1, 3RD FLOOR
J P TECHNO PARK, MILLERS ROAD
BENGALURU 560001
PAN AAACI7940L.
                                 ...RESPONDENT

(BY SRI. T.SURYANARAYANA, SENIOR COUNSEL A/W
SRI.TANMAYEE RAJKUMAR, ADV.)

     THIS INCOME TAX APPEAL FILED UNDER
SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT
                              7




OF ORDER DATED 03/02/2021 PASSED IN ITA NO.
840/BANG/2019, FOR THE ASSESSMENT YEAR 2014-
2015. PRAYING COURT TO DECIDE THE FOREGOING
QUESTION OF LAW AND/OR SUCH OTHER QUESTIONS
OF LAW AS MAY BE FORMULATED BY THE HON'BLE
COURT AS DEEMED FIT AND ETC.

     THESE INCOME TAX APPEALS COMING ON FOR
ADMISSION THIS DAY, S. SUJATHA, J. DELIVERED
THE FOLLOWING;

                    JUDGMENT

Since common and akin issues are involved in

these appeals, they are heard together and disposed

of by this common judgment.

2. These appeals are filed by the Revenue

under Section 260-A of the Income Tax Act, 1961

['Act' for short] challenging the orders of the Income

Tax Appellate Tribunal 'B' Bench, Bengaluru, ('Tribunal'

for short) in Appeal Nos. 1926/Bang/2016,

1927/Bang/2016, 838/Bang/2019, 839/Bang/2019

and 840/Bang/2019 relating to the Assessment Years

2011-12, 2011-12, 2012-13, 2013-14 and 2014-15

respectively raising the following substantial questions

of law.

(i) "whether on the facts and in the circumstances of the case, the Tribunal is right in law allowing relief under section 14A to assessee by following its earlier decision when assessee was in receipt of exempt income under section 10(34) of the Act and such satisfied the conditions for invoking section 14A of the Act?"

(ii) Whether on the facts and in the circumstances of the case, the Tribunal's order can be said as perverse in nature as Tribunal has set aside disallowance made under section 10(23AAB) of the Act by following its earlier order by holding that as assessee is in business of life insurance, the income has to be computed as per section 44 of the Act ignoring non-obstante clause in section 44 is not absolute and provisions of section mandates to exclude incomes from purview of taxation irrespective of it being an income or loss?

(iii) whether on the facts and in the circumstances of the case, the Tribunal's order can be said as perverse in nature as Tribunal has failed to observe that if the loss arising in the previous year was under a head not chargeable to tax, it could not be allowed to be carried forward and absorbed against income in a subsequent year from a taxable income?"

3. The respondent-assessee is a company

engaged in business of life insurance. For the

assessment years involved herein, assessment orders

under Section 143(3) of the Act were passed denying

the claim made by the respondent-assessee under

Section 14A and 10(23AAB) of the Act. Being

aggrieved, respondent-assessee preferred appeal

before the First Appellate Authority. The said

authority having confirmed the order of the

Assessment Officer, further appeal was preferred

before the Tribunal which came to be partly allowed.

Hence, this appeal by the Revenue.

4. Learned counsel for the respondent-

assessee would point out that the issue involved

herein is no more res integra in view of the decision

taken by the Hon'ble High Court of Delhi in the case of

Principal Commissioner of Income Tax vs.

Oriental Insurance Co.Ltd. reported in (2020)

273 Taxmann 427 (Delhi) as well as in the decision

of this Court in the very same respondent-assessee's

case in ITA No.112/2020 and allied matter (decided

on 31.08.2021). Accordingly, seeks to answer the

substantial question of law Nos. 1 and 2 in favour of

respondent-assessee and against the revenue.

Further, he submitted that the substantial question of

law No.3 raised in all the appeals do not arise for

consideration.

5. Learned counsel for the revenue would

point out that CA.No.007580/2019 filed against the

order of the Hon'ble High Court of Delhi in the case of

Oriental Insurance Company supra, is pending

consideration before the Hon'ble Apex Court.

However, the learned counsel does not dispute the law

declared by the Hon'ble High Court of Delhi insofar as

substantial question of law No.1 and the law declared

by this Court in the very same respondent-assessee's

case insofar as substantial question of law No.2 is

concerned.

6. Having considered the submissions made

by the learned counsel appearing for the parties as

aforesaid, we are of the considered opinion that the

substantial question of law No.1 is squarely covered

by the decision of Hon'ble High Court of Delhi in the

case of Oriental Insurance Company supra. In

view of the pendency of the appeal before the Hon'ble

Apex Court against this order, in our considered view,

the interest of justice would be met in answering the

substantial question of law No.1 in favour of

respondent-assessee and against the revenue keeping

open the liberty to the Assessing Officer to pass any

consequential order subject to the order to be passed

by the Hon'ble Apex Court in CA.No.007580/2019.

Ordered accordingly.

7. As regards substantial question of law

No.2, it is clear that the very same question in the

very same respondent-assessee's case has been

answered by this Court in favour of the respondent-

assessee and against the revenue in ITA

No.112/2020. Hence, this substantial question of

law No.2 is answered in favour of assesse and against

the revenue.

8. As regards substantial question of law No.3

is concerned, the same appears to have been raised

by the revenue in abundant caution and this Court

having answered substantial question of law Nos. 1

and 2 in favour of the respondent-assessee and

against the revenue, answering the substantial

question of law No.3 does not arise.

The appeals stand disposed of as indicated

above.

In view of the disposal of the main appeals, all

interlocutory applications stand disposed of.

Sd/-

JUDGE

Sd/-

JUDGE

SSD