M/s. Vishal Tools & Forgings Pvt.Ltd, Jalandhar V. The Addl.Commissioner of Income-tax, Jalandhar

MA 100/ASR/2014

• Counselvise Citation: [2015] 124 COUNSELVISE.COM (IT) 3379 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 2 month(s) 28 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 31-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 02-06-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 02-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Rectification of order
• Section: 131; 10; 10(10D)

Judgement Text

M.A. NO S . 99 & 100 /ASR/2014 (IN I.T.A. NO S . 131 /ASR/201 2 & 502/ASR//2011 ) ASSESSMENT YEA RS : 200 7 - 08 & 2006 - 07 PAGE 1 OF 8 IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR [CORAM: PRAMOD KUMAR AM AND A.D. JAIN JM] M.A. NO S . 99 & 100 /ASR/2014 (IN I.T.A. NO S . 1 31 /ASR/201 2 & 502/A SR /2011 RESPECTIVELY ) ASSESSMENT YEAR S : 200 7 - 08 & 2006 - 07 RESPECTIVELY VISHAL TOOLS & FORGINGS PVT. LTD., . APPELLANT JALANDHAR. [PAN: AA A C V 8722 D ] VS. ADDL. COMMISSIONER OF INCOME TAX , .. ....... RESPONDENT RANGE - I I , JALANDHAR . APPEARANCES BY: SANDEEP VIJH FOR THE APPELLANT TARSEM LAL FOR THE RESPONDENT D ATE OF CONCLUDING THE HEARING: JUNE 02, 2015 DATE OF PRONOUNCING THE ORDER: AUGU ST 31 , 2015 O R D E R PER PRAMOD KUMAR : 1. BY WAY OF TH ESE TWO RECTIFICATION PETITION S , THE ASSESSEE APPLICANT S EEKS RECALL OF O R DER S DATED 2 9 TH APRIL, 201 4 ON THE GROUND, INTE R ALIA, (I) THAT THE CORE ARGUMENTS ADVANCED BY THE ASSESSEE HAVE BEEN SIMPLY BRUSHED ASIDE, WITHOUT ADJUDICATING UPON THE SAME, AND (II) THAT THE BINDING JUDICIAL PRECEDENTS, CITED BY THE ASSESSEE, HAVE BEEN DISTINGUISHED, WITHOUT ANY SPECIFIC REASONS AND ON A WHOLESALE BASIS, BY SIMPLY OBSERVING THAT THE CIRCULAR OF IRDA HAS CLARIFIED THE POSITION AND THE ARGUMENT MADE BY THE LEARNED COUNSEL THAT IT IS PROSPECTIVE IN NATURE CANNOT BE ACCEPTED AS IT IS CLARIFICATORY IN NATURE AND THA T A CCORDINGLY, THE CASES OF VARIOUS COURSE OF LAW, WHICH HAVE BEEN CAREFULLY PERUSED BY US, ARE NOT AT ALL APPLICABLE. M.A. NO S . 99 & 100 /ASR/2014 (IN I.T.A. NO S . 131 /ASR/201 2 & 502/ASR//2011 ) ASSESSMENT YEA RS : 200 7 - 08 & 2006 - 07 PAGE 2 OF 8 2. WHEN TH ESE RECTIFICATION PETITION S W ERE TAKEN UP FOR HEARING, LD. REPRESENTATIVES FAIRLY AGREED THAT THE MATERIAL F ACTS AND CIRCUMS TANCES WITH REGARD TO TH ESE RECTIFICATION PETI TI ON S ARE THE SAME AS IN THE CASE OF F.C. SONDHI & COMPANY (INDI) PV T . LTD. V S. DCIT IN M.A. NO.75/ASR/2014 AND, THEREFORE , WHATEVER WE DECIDE IN THE SAID RECTIFICATION PETITION WILL FOLLOW MUTATIS MUTANDIS IN TH ESE CASE S AS WELL . 3. LEARNED REPRESENTATIVES FOR THE PARTIES ARE THE SAME A S IN THAT CASE AND COMMON ARGUMENTS HAVE BEEN ADVANCED BY THEM FOR ALL THESE RECTIFICATION PETITIONS. 4. V I D E OUR ORDER OF EVEN DATE WE HAVE UPHELD THE PLEA OF THE ASSESSEE AND ACCORDINGLY RECALLED THE ORDER IN THE C A SE OF F.C. SONDHI & COMPANY (INDIA) PVT. LTD. WHILE DOING SO, WE HAVE , INTE R , ALIA OBSERVED AS UNDER : - 9. AS FOR THE SCOPE OF OUR POWERS UNDER SECTION 254(2), WE MAY REFER TO THE FOLLOWING OBSERVATIONS MADE, AFTER TAKING INTO ACCOUNT A FULL BENCH DECISION OF HONBLE JURISDICTIONAL HIGH COURT, BY A COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF PLAZA INVESTMENTS PVT LTD VS INCOME TAX OFFICER [(2006) 108 ITD 239 (BOM)] : - .WHILE ADJUDICATING UPON THIS RECTIFICATION PETITION, WE ARE NOT REALLY INFLUENCED BY COMPLEXITY OF THE ISSUE IN APPEAL; WE ARE ONLY CONCERNED ABOUT SIMPLICITY OF THE ERROR WHICH IS SAID TO HAVE BEEN COMMITTED. ONCE WE COME TO THE CONCLUSION THAT TRIBUNAL DID ERR IN COMING TO A PARTICU LAR CONCLUSION, AND THE ERROR IS SUCH AN ERROR ON WHICH NO TWO VIEWS ARE POSSIBLE, IT IS IRRELEVANT WHETHER THE ERROR WAS AN ERROR ON A POINT OF LAW OR ON A POINT OF FACT, OR AS TO WHAT IS THE DEGREE OF COMPLEXITY OF THE ISSUE. ELABORATING UPON THE SCOPE O F THE EXPRESSION MISTAKE APPARENT FROM RECORD AND EXPLAINING THE IMPORT OF HONBLE SUPREME COURTS JUDGMENT IN THE CASE OF VOLKART BROS. (SUPRA), A FULL BENCH OF HONBLE PUNJAB & HARYANA HIGH COURT, IN THE CASE OF R.A. BOGA VS. AAC (1977) 110 ITR 1 (P&H) (FB), HAS OBSERVED : 'THE BASIC PRINCIPLE IS THUS CLEAR. A MISTAKE APPARENT FROM RECORD MEANS AN OBVIOUS OR PATENT MISTAKE OR A GLARING AND M.A. NO S . 99 & 100 /ASR/2014 (IN I.T.A. NO S . 131 /ASR/201 2 & 502/ASR//2011 ) ASSESSMENT YEA RS : 200 7 - 08 & 2006 - 07 PAGE 3 OF 8 OBVIOUS MISTAKE. HOTLY DEBATABLE ISSUES ARE EXCLUDED; HARDLY DEBATABLE ISSUES ARE INCLUDED. THE ISSUE MAY BE CO MPLICATED, YET THE MISTAKE MAY BE SIMPLE. IT IS A MISTAKE APPARENT FROM RECORD. THE TEST IS NOT COMPLEXITY OF THE ISSUE BUT SIMPLICITY OF THE MISTAKE .' THE QUESTION WHETHER DIVIDEND INCOME CAN BE TAXED AS INCOME UNDER THE HEAD INCOME FROM BUSINESS, IN O UR CONSIDERED VIEW, IS HARDLY DEBATABLE. 9. THE NEXT ISSUE RAISED BEFORE US IS WHETHER A CONSIDERED VIEW OF THE TRIBUNAL CAN BE SUBJECTED TO RECTIFICATION OF MISTAKE. IT IS REVENUES CONTENTION THAT THE MISTAKE, EVEN IF THERE BE ANY, IS A CONSCIOUS ONE IN ASMUCH AS THE TRIBUNAL DULY CONSIDERED ALL ASPECTS OF THE MATTER AND THEN CAME TO A PARTICULAR CONCLUSION. WHATEVER BE THE MERITS OF SUCH A CONCLUSION, THE CONCLUSIONS SO ARRIVED AT BY THE TRIBUNAL CANNOT BE UNSETTLED AS IT WOULD AMOUNT TO REVIEWING THE OR DER OF THE TRIBUNAL. WE ARE NOT PERSUADED BY THIS LINE OF REASONING. UNDOUBTEDLY, ALL MISTAKES CANNOT BE RECTIFIED UNDER S. 254(2). THE RECTIFIABLE MISTAKES ARE THE MISTAKES WHICH ARE OBVIOUS, PATENT, AND GLARING MISTAKES ON WHICH NO TWO VIEWS ARE POSSIBLE . ONCE A MISTAKE FITS IN THIS CATEGORY, AS IS THE CASE BEFORE US, IT IS IMMATERIAL WHETHER IT IS A CONSCIOUS MISTAKE OR UNCONSCIOUS MISTAKE. IF A JUDICIAL BODY LIKE THIS TRIBUNAL APPLIES ITS MIND TO A SITUATION BUT REACHES A WRONG CONCLUSION BECAUSE OF A S IMPLE MISTAKE COMMITTED IN THE PROCESS ON REASONING, ON WHICH NO TWO VIEWS ARE POSSIBLE, IT WILL INDEED BE UNREASONABLE TO SUGGEST THAT ONLY BECAUSE THIS MISTAKE IS COMMITTED AFTER APPLICATION OF MIND ON A SITUATION, THIS IS NOT A MISTAKE APPARENT FROM REC ORD. IT CANNOT BE TERMED AS AN ERROR OF JUDGMENT, BUT, IN OUR HUMBLE UNDERSTANDING, IT HAS TO BE TERMED AS A MISTAKE APPARENT FROM RECORD RESULTING IN A VITIATED JUDGMENT. THE DIFFERENCE BETWEEN AN ERROR OF JUDGMENT VIS - - VIS AN ERROR APPARENT FROM RECORD LEADING TO AN ERRONEOUS JUDGMENT MAY BE THIN BUT IS TOO SUBTLE TO BE IGNORED BY A JUDICIAL BODY. THE QUESTION OF ERROR OF JUDGMENT CAN ONLY ARISE WHEN TWO VIEWS ARE POSSIBLE AND ONE OF THE VIEWS IS ADOPTED. THAT IS NOT THE CASE BEFORE US. IT IS A SIMPLE CA SE OF OMISSION TO TAKE NOTE OF THE CONTEXT IN WHICH HONBLE SUPREME COURT MADE CERTAIN OBSERVATIONS AND THEN INTERPRETING THOSE OBSERVATIONS AS COMPLETE EXPOSITION OF LAW ON THAT SUBJECT. HONBLE SUPREME COURT ITSELF, IN THE CASE OF CIT VS. SUN ENGINEERING WORKS (P) LTD. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), HAS OBSERVED THAT, 'IT IS NEITHER DESIRABLE NOR PERMISSIBLE TO PICK OUT A WORD OR A SENTENCE FROM THE JUDGMENT OF THIS COURT, DIVORCED FROM THE CONTEXT OF THE QUESTION UNDER CONSIDERATION, AND TO TREAT IT TO BE COMPLETE LAW DECLARED BY THIS COURT'. THE TRIBUNAL HAS ENDED UP DOING SOMETHING WHICH, AS IS THE LAW LAID DOWN BY THE HONBLE SUPREME COURT, IS IMPERMISSIBLE IN LAW. THAT CANNOT BUT BE A GLARING, OBVIOUS AND PATENT ERROR AND, ACCORDIN GLY, LIABLE TO BE RECTIFIED UNDER S. 254(2) OF THE ACT. TO SUGGEST THAT A CONSCIOUS M.A. NO S . 99 & 100 /ASR/2014 (IN I.T.A. NO S . 131 /ASR/201 2 & 502/ASR//2011 ) ASSESSMENT YEA RS : 200 7 - 08 & 2006 - 07 PAGE 4 OF 8 MISTAKE, EVEN IF THAT BE A MISTAKE APPARENT FROM RECORD, CANNOT BE RECTIFIED UNDER S. 254(2) IS SOMEWHAT DEVOID OF LOGIC AND RATIONALE. IF A CONSCIOUS MISTAKE IS A MISTAKE APPARENT FROM RECORD, THERE IS NO REASON FOR NOT RECTIFYING THE SAME UNDER THE PROVISIONS OF LAW. TO ERR IS HUMAN BUT THERE CANNOT BE ANY JUSTIFICATION FOR PERPETUATING AN ERROR. IN HIS INIMITABLE WORDS, JUSTICE BHAGWATI, IN THE CASE OF DISTRIBUTORS (BAROD A) (P) LTD. VS. UNION OF INDIA (1985) 47 CTR (SC) 349 : (1985) 155 ITR 120 (SC), HAD OBSERVED THUS : 'TO PERPETUATE AN ERROR IS NO HEROISM. TO RECTIFY IT IS THE COMPULSION OF JUDICIAL CONSCIENCE. IN THIS, WE DERIVE COMFORT AND STRENGTH FROM WISE AND INSPI RING WORDS OF JUSTICE BRONSON IN PIERCE VS. DELAMETER : A JUDGE OUGHT TO BE WISE ENOUGH TO KNOW THAT HE IS FALLIBLE, AND, THEREFORE, EVER READY TO LEARN; GREAT AND HONEST ENOUGH TO DISCARD ALL MERE PRIDE OF OPINION AND FOLLOW THE TRUTH WHEREVER IT MAY LEA D; AND COURAGEOUS ENOUGH TO ACKNOWLEDGE HIS ERRORS.' WE ARE, THEREFORE, UNABLE TO ACCEPT REVENUES CONTENTION THAT A CONSIDERED OPINION EXPRESSED BY THE TRIBUNAL, AFTER APPLYING ITS MIND TO AN ISSUE IN APPEAL, CANNOT BE UNSETTLED EVEN IF THE MISTAKE IN T HE PROCESS OF REASONING IS A SIMPLE MISTAKE APPARENT FROM RECORD ON WHICH NO TWO VIEWS ARE POSSIBLE . (EMPHASIS, BY UNDERLINING, SUPPLIED BY US) 10. EVERYTHING, THUS, HINGES ON WHETHER THE PROCESS OF REASONING ADOPTED BY THE TRIBUNAL, IN RELYING UPON THE I RDA GUIDELINES WHICH FIND NO MENTION IN THE INCOME TAX ACT, AND IN HOLDING THAT ONLY PURE LIFE INSURANCE POLICIES ARE COVERED BY SECTION 10(10D), WAS A MISTAKE APPARENT ON RECORD OR NOR. EXPLANATION TO SECTION 10 (10D), AS IT STOOD AT THE RELEVANT POINT OF TIME, SIMPLY PROVIDED THAT FOR THE PURPOSES 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 M ANNER WHATSOEVER WITH THE BUSINESS OF THE FIRST - MENTIONED PERSON . 11. ALL THAT ENTITLES A POLICY TO BE COVERED BY SECTION 10(10D) THEREFORE IS THAT IT SHOULD BE A LIFE INSURANCE POLICY ON THE LIFE OF AN ELIGIBLE PERSON. 12. THE CONCEPT OF TERM POLICY , PURE LIFE POLICY AND IRDA GUIDELINES FIND NO MENTION IN THE STATUTORY PROVISIONS. EVEN IF THESE CONCEPTS OUGHT TO BE INCORPORATED IN THIS STATUTORY PROVISION TO MAKE IT MORE MEANINGFUL AND WORKABLE, IT CANNOT BE OPEN TO ANY JUDICIAL FORUM TO SUPPLY THESE OMISSIONS. RELYING UPON HONBLE SUPREME COURTS JUDGMENT IN THE CASE OF TARULATA SHYAM VS CIT [(1977) 108 ITR 245 (SC)], A COORDINATE BENCH OF THIS TRIBUNAL, IN THE CASE OF TATA TEA LIMITED VS JCIT [(2003) 87 ITD 351 (CAL)], HAS EXPLAINED THIS PRINCIPLE A S FOLLOWS: M.A. NO S . 99 & 100 /ASR/2014 (IN I.T.A. NO S . 131 /ASR/201 2 & 502/ASR//2011 ) ASSESSMENT YEA RS : 200 7 - 08 & 2006 - 07 PAGE 5 OF 8 8. CASUS OMISSUS, WHICH BROADLY REFERS TO THE PRINCIPLE THAT A MATTER WHICH HAS NOT BEEN PROVIDED IN THE STATUTE BUT SHOULD HAVE BEEN THERE, CANNOT BE SUPPLIED BY US, AS, TO DO SO WILL BE CLEARLY BEYOND THE CALL AND SCOPE OF OUR DUTY WHICH IS O NLY TO INTERPRET THE LAW AS IT EXISTS. HONBLE SUPREME COURT, IN THE CASE OF SMT. TARULATA SHYAM VS. CIT 1977 CTR (SC) 275 : (1977) 108 ITR 345 (SC) AT P 356 HAS OBSERVED : 'WE HAVE GIVEN ANXIOUS THOUGHT TO THE PERSUASIVE ARGUMENTS..... (WHICH) IF ACCEPTE D, WILL CERTAINLY SOFTEN THE RIGOUR OF THIS EXTREMELY DRASTIC PROVISION AND BRING IT MORE IN CONFORMITY WITH LOGIC AND EQUITY. BUT THE LANGUAGE OF SECTIONS........ IS CLEAR AND UNAMBIGUOUS. THERE IS NO SCOPE FOR IMPORTING INTO THE STATUTE THE WORDS WHICH A RE NOT THERE. SUCH INTERPRETATION WOULD BE, NOT TO CONSTRUE, BUT TO AMEND THE STATUTE. EVEN IF THERE BE A CASUS OMISSUS, THE DEFECT CAN BE REMEDIED ONLY BY LEGISLATION AND NOT BY JUDICIAL INTERPRETATION......TO US, THERE APPEARS NO JUSTIFICATION TO DEPART FROM NORMAL RULE OF CONSTRUCTION ACCORDING TO WHICH THE INTENTION OF LEGISLATURE IS PRIMARILY TO BE GATHERED FROM THE WORDS USED IN THE STATUTE. IT WILL BE WELL TO RECALL THE WORDS OF ROWLATT. J. IN CAPE BRANDY SYNDICATE VS. IRC (1921) 1 KB 64 (KB) AT P. 7 1, THAT : '........... IN A TAXING ACT ONE HAS TO LOOK AT MERELY WHAT IS CLEARLY SAID. THERE IS NO ROOM FOR ANY INTENDMENT. THERE IS NO EQUITY ABOUT A TAX. THERE IS NO PRESUMPTION AS TO A TAX. NOTHING IS TO BE READ IN, NOTHING IS TO BE IMPLIED. ONE CAN ONL Y LOOK FAIRLY AT THE LANGUAGE USED.' ONCE IT IS SHOWN THAT THE CASE OF THE ASSESSEE COMES WITHIN THE LETTER OF LAW, HE MUST BE TAXED, HOWEVER GREAT THE HARDSHIP MAY APPEAR TO THE JUDICIAL MIND TO BE.' EVEN IN THE CASE OF CIT VS. NATIONAL TAJ TRADERS (SUPR A), RELIED UPON BY THE ASSESSEE, THEIR LORDSHIPS OF HONBLE SUPREME COURT HAVE REFERRED TO, WITH APPROVAL, MAXWELL ON INTERPRETATION OF STATUTES OBSERVATION THAT 'A CASE NOT PROVIDED FOR IN A STATUTE IS NOT TO BE DEALT WITH MERELY BECAUSE THERE SEEMS NO G OOD REASON WHY IT SHOULD HAVE BEEN OMITTED, AND THAT THE OMISSION APPEARS IN CONSEQUENCE TO HAVE BEEN UNINTENTIONAL'. THEIR LORDSHIPS THEN OBSERVED THAT 'IN OTHER WORDS, UNDER THE FIRST PRINCIPLE, A CASUS OMISSUS CANNOT BE SUPPLIED BY THE COURT EXCEPT WHEN REASON FOR IT IS FOUND TO BE IN THE FOUR CORNERS OF THE STATUTE ITSELF BUT AT THE SAME TIME A CASUS OMISSUS SHOULD NOT BE READILY INFERRED AND FOR THAT PURPOSE ALL THE PARTS OF A STATUTE OR SECTION MUST BE CONSTRUED TOGETHER AND EVERY CLAUSE OF A SECTION SHOULD BE CONSTRUED WITH REFERENCE TO THE CONTEXT AND OTHER CLAUSES THEREOF SO THAT THE CONSTRUCTION TO BE PUT ON A PARTICULAR PROVISION MAKES A CONSISTENT ENACTMENT OF THE WHOLE STATUTE'. 13. THE VERY FACT THAT THE TRIBUNAL LEANED OVER MATERIAL OUTSIDE TH E STATUTE, WITHOUT ADJUDICATING UPON THE CORE QUESTION AS TO WHETHER IT IS PERMISSIBLE TO LEAN UPON THE SAME - AS IN THIS CASE, IN OUR CONSIDERED VIEW, IS A MISTAKE APPARENT ON RECORD WHICH SHOULD BE RECTIFIED UNDER SECTION 254(2) OF THE ACT. M.A. NO S . 99 & 100 /ASR/2014 (IN I.T.A. NO S . 131 /ASR/201 2 & 502/ASR//2011 ) ASSESSMENT YEA RS : 200 7 - 08 & 2006 - 07 PAGE 6 OF 8 14. AS WE HA VE NOTED EARLIER IN THIS ORDER, THE TRIBUNAL HAS, AT ONE PLACE, OBSERVED THAT, AS PER DEFINITION OF KEYMAN INSURANCE POLICY, A PERSON PURCHASING LIFE INSURANCE CAN ONLY DO SO TO THE EXTENT OF HIS INSURABLE INTEREST IN THE ASSURED BUT THEN, IN OUR CONSI DERED VIEW, THIS OBSERVATION IS CLEARLY A MISTAKE APPARENT ON RECORD. THE EXPLANATION BELOW SECTION 10(10D), WHICH IS THE ONLY RELEVANT FACTOR FOR DECIDING AS TO WHAT IS KEYMAN INSURANCE POLICY, HAS NO MENTION ABOUT THIS CONDITION. APPARENTLY, THIS EXPRE SSION HAS BEEN TAKEN FROM THE IRDA CIRCULAR BUT THEN THERE IS NO FINDING ON RECORD TO HOLD THAT ONE CAN REFER TO THESE CIRCULARS TO FIND OUT THE CONNOTATIONS OF EXPRESSION KEYMAN INSURANCE POLICY FOR THE PURPOSES OF THE INCOME TAX ACT. 15. GOING BY THE INTERPRETATION THAT THE TRIBUNAL HAS GIVEN, ONLY TERM INSURANCE POLICIES, WHICH ARE EXPLAINED AS PURE LIFE INSURANCE POLICIES, ARE ELIGIBLE FOR DEDUCTION AS CONTRIBUTION FOR KEYMAN INSURANCE POLICIES BUT THEN SUCH AN INTERPRETATION MAY PERHAPS BE WRONG BE CAUSE EVEN AFTER THE IRDA CIRCULARS, THE ONLY CURATIVE AMENDMENT THAT HAS BEEN MADE IN THE STATUTE, BY INSERTING CLAUSE (D) TO SECTION 10(10D), IS A RESTRICTION OF 10% OF THE SUM ASSURED HAVING BEEN IMPOSED ON THE POLICY PREMIUM. WHETHER AN INSURANCE POL ICY IS PURE INSURANCE POLICY, WHICH DOES NOT ENTITLE THE INSURED OR INSURER TO ANYTHING AT THE END OF THE POLICY TERM, OR WHETHER IT IS A SAVING OR INVESTMENT ORIENTED INSURANCE POLICY, WHICH INVOLVES PAYMENTS AT THE END OF THE POLICY TERM, IS NOT RELEVANT EVEN AFTER THE CURATIVE AMENDMENTS. 16. WE HAVE NOTED THAT IN THE WRITTEN SUBMISSIONS FILED BY THE ASSESSE DURING HE COURSE OF THE HEARING, THE ABOVE POINT WAS SPECIFICALLY RAISED BY THE ASSESSE AS FOLLOWS: KEYMAN INSURANCE POLICY HAS BEEN DEFINED IN SECTION 10(10D) AND READS AS UNDER: 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 WAS CONNECTED, IN ANY MANNER WHATSOEVER, WITH THE BUS INESS OF THE FIRST MENTIONED PERSON IT IS CLEAR FROM THE DEFINITION THAT KEYMAN INSURANCE POLICY IS ON THE LIFE OF ANOTHER PERSON. IN OTHER WORDS, THE PAYMENTS UNDER POLICY BECOMES DUE ON THE DEATH OF THE CONCERNED PERSON. NO FURTHER TESTS HAVE BEEN PRESC RIBED AND NOTHING MORE CAN BE READ INTO OR INFERRED EXCEPT BEING AN EMPLOYEE OR EX - EMPLOYEE OR IN CONNECTION WITH BUSINESS. (PAGE 1 OF WRITTEN SUBMISSION) BEFORE PROCEEDING FURTHER, IT IS SUBMITTED THAT THE IRDA WAS ESTABLISHED WITH CERTAIN OBJECTIVES AN D THESE HAVE BEEN MENTIONED BY THE CIT(A) HIMSELF IN PARA 2.9.1. IT IS VERY CLEAR THAT THE SCOPE OF IRDA IS CONFINED TO REGULATE, PROMOTE AND ENSURE ORDERLY GROWTH OF INSURANCE BUSINESS. THE IRDA HAS NO RELEVANCE SO FAR AS ALLOWABILITY OR PREMIUM UNDER I NCOME TAX ACT OR TAXATION OF POLICY PROCEEDS IS CONCERNED. M.A. NO S . 99 & 100 /ASR/2014 (IN I.T.A. NO S . 131 /ASR/201 2 & 502/ASR//2011 ) ASSESSMENT YEA RS : 200 7 - 08 & 2006 - 07 PAGE 7 OF 8 WHERE ANOTHER ACT IS TO BE CONSIDERED FOR THE PURPOSE OF INTERPRETATION, IT IS PROVIDED IN THE RELEVANT SECTION OF THE INCOME TAX ACT ITSELF. SOME EXAMPLES ARE AS UNDER: - SECTION 2(25A): REFERS T O TERRITORIAL WATERS, CONTINENTAL SHELF, EXCLUSIVE ECONOMIC ZONE AND OTHER MARITIME ZONES ACT 1976 - SECTION 2(29D): REFERS TO NATIONAL TAX TRIBUNAL ACT, 2005 - SECTION 2 (38): REFERS TO EMPLOYEES PROVIDENT FUND ACCT, 1952 - SECTION 2(42A) - EXPL 2 : REFERS TO SECURITIES CONTRACTS (REGULATIONS) ACT 1956 - SECTION 2(47): REFERS TO TRANSFER OF PROPERTY ACT, 1882 SINCE IRDA 1999 HAS NOT BEEN REFERRED TO IN DEFINING KEYMAN POLICY OR LIFE INSURANCE, ITS CIRCULARS CANNOT BE RELIED UPON FOR INCOME TAX PURPOSES (PAGE 3 OF WRITTEN SUBMISSION) 17. THESE SUBMISSIONS WERE, HOWEVER, NOT DEALT WITH AT ALL WHILE PASSING THE ORDER WHICH IS SUBJECTED TO THIS RECTIFICATION PETITION. 18. IN VIEW OF THE ABOVE DISCUSSIONS, AS ALSO BEARING IN MIND ENTIRETY OF THE CASE, WE ARE OF TH E CONSIDERED VIEW THAT THE ORDER PASSED BY THE TRIBUNAL DID SUFFER FROM MISTAKE APPARENT FROM RECORD INASMUCH AS, WITHOUT ADJUDICATING UPON THE SPECIFIC SUBMISSIONS OF THE ASSESSE, THE TRIBUNAL PROCEEDED TO DECIDE THE MATTER ON THE BASIS OF THE IRDA CIRCUL ARS. THE TRIBUNAL HAS HELD THAT THESE CIRCULARS ARE CLARIFICATORY AND, THEREFORE, RETROSPECTIVE IN EFFECT. THE ALTERNATE CONTENTION WAS PICKED UP FOR DISPOSAL WITHOUT DEALING WITH THE CORE CONTENTION. IT IS A WHOLLY ACADEMIC ISSUE AS TO WHETHER THESE CIRC ULARS ARE PROSPECTIVE OR RETROSPECTIVE. THAT ASPECT OF THE MATTER COULD BE RELEVANT ONLY IN CASE THE CIRCULARS ARE HELD TO BE BINDING AT ALL. 19. WE, THEREFORE, RECALL THE ORDER DATED 21 ST APRIL 2014 FOR THE PURPOSES OF ADJUDICATING UPON THE PLEA OF THE A SSESSE TO THE EFFECT THAT, ON THE FACTS OF THIS CASE, THE IRDA CIRCULARS HAVE NO ROLE TO PLAY IN DECIDING WHETHER THE PREMIUM ON THE INSURANCE POLICIES PAID ARE COVERED BY THE SCOPE OF KEYMAN INSURANCE POLICY UNDER SECTION 10(10D) OF THE ACT, AND FOR DEC IDING THE MATTER AFRESH IN THE LIGHT OF THE SAID ADJUDICATION. WE HAVE NOTED THAT AN EARLIER DECISION OF THIS TRIBUNAL, IN THE CASE OF SHRI NIDHI CORPORATION VS ADDITIONAL CIT [(2014) 151 ITD 470 (MUM)], WAS NOT TAKEN INTO ACCOUNT BY THE TRIBUNAL, WHILE DI SPOSING OF THE MATTER, AS THE SAID ORDER, THOUGH PASSED EARLIER, WAS NOT IN PUBLIC DOMAIN BY THAT POINT OF TIME. NOW THAT THE MATTER IS GOING BACK TO THE TRIBUNAL FOR FRESH CONSIDERATION, NEEDLESS TO SAY, THIS DECISION WILL ALSO HAVE TO BE TAKEN INTO ACCOU NT. 20. AS WE HAVE RECALLED THE MATTER ON THE ABOVE SHORT GROUND, BUT THIS ASPECT GOES TO THE ROOT OF THE MATTER, WE SEE NO NEED TO DEAL WITH OTHER ISSUES RAISED IN THIS PETITION . M.A. NO S . 99 & 100 /ASR/2014 (IN I.T.A. NO S . 131 /ASR/201 2 & 502/ASR//2011 ) ASSESSMENT YEA RS : 200 7 - 08 & 2006 - 07 PAGE 8 OF 8 5. WE SEE NO REASONS TO TAKE ANY OTHER VIEW OF THE MATTER THAN THE VIEW SO TAKEN BY US IN THE CASE OF F.C. SONDHI & COMPANY (INDIA) PVT. LTD. (SUPRA) S INCE , ADMITTEDLY , THE MATERIAL FACTS AND CIRCUMSTANCES OF THIS CASE ARE IDENTICAL . R ESPECTFULLY FOLLOWING OUR DECISION IN THE C A SE OF F.C. SONDHI & COMPANY (INDIA) PVT. LTD. (S UPRA) ., WE RECALL BOTH THE ORDER S DATED 29.04.2014 PASSED BY THIS TRIBUNAL FOR FRESH HEARING IN TERMS OF THE DIRECTION S SET OUT ABOVE. THE OBSERVATIONS MADE IN THE S AID CASE WILL APPLY MUTATIS MUTANDIS IN THESE CASE S AS WELL. 6. IN THE RESULT, BOTH THE R ECTIFICATION PETITION S ARE ALLOWED IN THE TERMS AS INDICATED ABOVE. PRONOUNCED TODAY 31 ST DAY OF AUGUST, 2015. SD/XX SD/XX A D JAIN PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) DATED THE 31 ST DAY OF AUGUST, 2015 PBN/* C OPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ETC ASSISTANT REGISTRAR INCOME TAX APPELLA TE TRIBUNAL AMRITSAR BENCH, AMRITSAR