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3. Noticing the basic facts, the petitioner filed his return of income for the assessment year 2013-14 on 27.9.2013 showing total income of Rs.16,38,170/- after claiming rebate in respect of life insurance premium, housing loan etc. restricting to Rs.1,00,000/- and further claim was also made under Section 80G of the Act. The petitioner stated that he did not put forth any claim under Section 80C in respect of the investment made with Bajaj Alliance Insurance Private Limited. It was stated that thereafter by letter dated 21.11.2017 and others, the Assessing Officer asked the petitioner to provide clarification regarding premature surrender of policy of Bajaj Alliance which was surrendered on 21.11.2012. Reply was filed by the petitioner, in which, stated the petitioner, he furnished the source of investment and other details. He further mentioned that he had C/SCA/17829/2018 CAV JUDGMENT DATED: 11/11/2022 never claimed any relief under Section 80CCC of the Act in respect of the pension policy of the Bajaj Alliance Private Limited.

3.1 It was thereafter that the notice under Section 148 dated 29.3.2018 was issued to the petitioner seeking to reopen the assessment. The reasons for reassessment was supplied by letter dated 28.9.2018. The petitioner filed his objections on 15.10.2018. The petitioner inter alia stated that he had not made any claim under Section 80CCC (1). The objections of the petitioner came to be disposed of and rejected by the Assessing Officer as per the order dated 16.10.2018.

3.5 The Assessing Officer however did not accept the objections and recorded that the assessee had not offered the gain of Rs.11,29,740/- earned out of premature surrender of policy. According to the Assessment Officer, the income had escaped to the said extent.

4. Learned advocate for the petitioner assailing the impugned C/SCA/17829/2018 CAV JUDGMENT DATED: 11/11/2022 notice and the order of rejection of objections submitted that despite the information and necessary clarification provided to the Assessing Officer, the same were not considered. What learned advocate for the petitioner highlighted was that the assessee never claimed relief under Section 80CCC (1) of the Act, therefore question of applicability of Section 80CCC (2) of the Act could not arise.

5.4 On the facts operated as above, the case of the department that the petitioner had received the surrender value of policy upon its premature redemption and the same was liable to tax under Section 80CCC (2) of the Act, stands erroneous. Once it is a position obtained that the petitioner- assessee had not obtained a relief under Section 80CCC (1) of the Act, the redemption amount of the policy prematurely surrendered would not be liable to be taxed.

5.5 This aspect would be clear on bare reading of Section 80CCC of the Act. Section 80CCC deals with the deduction in respect of contribution to certain pension funds to provide in Sub section (1) that where any individual assessee has in the previous year paid amount out of his income chargeable to tax in respect of annuity plan of Life Insurance Corporation of India, such amount shall be allowed deduction in computation of total income. Sub section (2) says that any amount standing to the credit of assessee referred in Sub section (1) which was allowed deduction along with the bonus etc. would be liable to tax upon surrender of annuity plan or as a pension received from such plan. Therefore, the condition for taxability of policy surrender C/SCA/17829/2018 CAV JUDGMENT DATED: 11/11/2022 value is that the amount invested was claimed as relief under Section 80CCC (1) of the Act which is not the case here.