TaxTMI 
TaxTMI 
2019 (11) TMI 1608
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....y Max Life Insurance that policy has been endorsed as an employer / employee policy and accordingly premium paid is allowed as business expenditure in the hands of employer. It is immaterial weather the policy is a term policy or a unit linked policy. For the purposes of section 10(10D) of the Act, '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 person. However, the Ld. PCIT observed that the Insurance Regulatory Development Authority (IRDA) has no role to play in the interpretation of statutory provisions of Income Tax Act. He observed that the Assessing Officer has not examined the issue of allowance of expenditure incurred on keyman Insurance policy. He, accordingly set aside the order of the Assessing Officer and remanded the matter to the file of the Assessing Officer to pass the order afresh order in accordance with law. 3. Aggrieved by the said order of the Ld. PCIT, the assessee has come in appeal before us. The Ld. Counsel for the assessee has submitted that the Ld. ....
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.... the appellant that the said amount represented compensation for loss of agricultural income. He accepted the entry in the statement of the account filed by the appellant in the absence of any supporting material and without making any inquiry, in these facts the conclusion that the order of the Income-tax Officer was erroneous is irresistible. We are, therefore, of the opinion that the High Court ban rightly held that the exercise of the jurisdiction by the Commissioner under section 263(1) was justified."[ Para 12] b. Bassera Realtors P Ltd vs CIT - 55 taxmann.com 327 (ITAT, Chandigarh) - Relevant part of the order is extracted below: ".....it is trite law that if proper enquiry has not been made then the assessment order passed by him has to be considered erroneous and prejudicial to the interest of Revenue. We have already referred to the decision of Hon'ble Delhi High Court in the case of Gee Vee Enterprises (supra). In this case, it is clearly held that if proper enquiries are not made then the assessment order would be erroneous......" [Para 52] "In view of the above discussion, it becomes totally clear that Assessing Officer has not made prope....
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....Ltd. [2015] 61 taxmann.com 108 (Chandigarh-Trib.) As there is no right to appeal available to the revenue from the order of assessment passed by Assessing Officer and thus revisionary powers have been given to the Commissioner and such power were held to be of wide amplitude by the Supreme Court in the case of CIT v. Shree Manjunatheshware Packing Products & Comphor Works [1998] 231ITR 53/96 Taxmann 1. Therefore, normally when Assessing Officer has not made any enquiry on a particular issue, then such order has to be construed as erroneous and prejudicial to the interest of revenue. f. Subhlakshmi Vanijya (P.) Ltd s (Kolkata-Trib.) Where Assessing Officer had mechanically accepted returned income without scrutinizing or reffering to any material examined by him, revision under section 263 would be justified. 3. In view of the above it is respectfully submitted that the Pr.CIT's assumption of jurisdiction u/s 263 is correct and as per law. It is further submitted that the appeal filed by the assessee may please be considered for dismissal. 4. The above submission may please be taken on record. Yours faithfully, Sd/- ....
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....y. So far as the words "as he deems necessary" are concerned, the said words suggest that the enquiries which are necessary to form a view as to whether the order of the AO is erroneous and prejudicial to the interest of Revenue or not The Ld. CIT had asked the assessee about the genuineness/validity of various claims to which the assessee had given a detailed reply. Once a point wise reply was given by the assessee, then a duty was cast upon the Ld. CIT to examine the reply of the assessee and form a prima-facie opinion as to whether the order of the AO was erroneous so far as it was prejudicial to the interest of Revenue. 8. A perusal of the impugned order of the Ld. PCIT reveals that on being asked to explain about the deduction of expenditure claimed on keyman insurance, the assessee duly explained that the assessee obtained the insurance policy for its employees and that the same was business expenditure of the assessee. The Ld. PCIT without considering the submissions of the assessee and even without giving any prima-facie finding that expenditure incurred by the assessee on the keyman insurance policy of its employees was not admissible expenditure has set aside the ....