SBI LIFE INSURANCE COMPANY LIMITED ,MUMBAI vs. COMMISSIONER OF INCOME TAX (APPEAL), NFAC, DELHI, MUMBAI

3 ITA 4095 & 4096/Mum/2023; A.Y.2018-19, 2019-20 SBI Life Insurance Company Limited 2. Ground No. 2: On account of not considering the claim of eligible deduction under section 80JJAA of the Act during the course of assessment On the facts and circumstances of the case and in law, the Learned CIT(A) has: 2.1. erred in not considering the fact that as per the provisions of section 80JJAA of the Act, the appellant is entitled to claim a deduction of Rs. 13,80,23,106 representing 30% of additional employee cost incurred during the Financial Year ('FY') 2018-19, however, the appellant had inadvertently claimed a deduction amounting to Rs. 4,37,47,671 under section 80JJAA of the Act while filing the Return of Income for the above captioned AY; 2.2. failed to appreciate the fact that the appellant has also made a detailed submission for the eligible claim of deduction under section 80JJAA of the Act along with documentary evidences thereof; 2.3. erred in ignoring the submission made by the appellant and has allowed a claim of deduction amounting to Rs. 4,37,47,671 as claimed by the appellant in its Return of Income for the year under consideration relying on the Apex Court's decision in case of Goetze (India) Ltd vs CIT ((284 ITR 323)) and Hon'ble Bombay High Court's decision in case of Ultratech Cement Limited vs Addl. CIT (ITA No. 1040 of 2014) wherein it is held that new claims cannot be accepted by Assessing Officer if the same are not claimed in Return of Income filed by the assessee under section 139 of the Act; 2.4. erred in not appreciating the fact that the claim of deduction under section 80JJAA of the Act was made in Return of Income and that no new claim was made during the course of assessment; 2.5. erred in not understanding the fact that the amount allowed as a deduction under section 80JJAA of the Act is Rs. 4,37,47,671 which was inadvertently claimed by the appellant in its Return of Income for the year under consideration instead of correct amount of Rs. 13,80,23,106 as claimed by the appellant during the course of assessment; 2.6. erred in not acknowledging the fact that Hon'ble Bombay High Court in case of Commissioner of Income-tax vs M/s Pruthvi Brokers & Shareholders Private Limited ((349 ITR 336)) has held

4 ITA 4095 & 4096/Mum/2023; A.Y.2018-19, 2019-20 SBI Life Insurance Company Limited that even assuming that the Assessing Officer ('AO') is not entitled to grant a deduction on the basis of a letter requesting an amendment to the return filed, the appellate authorities are entitled to consider the claim and to adjudicate the same; 2.7. erred in not appreciating the fact that Hon'ble Bombay High Court in case of Sesa Goa Limited vs Joint Commissioner of Income-tax, Panaji, Goa (423 ITR 426)) has held that even if we proceed on the basis that there was no obligation on the Assessing Officer to consider the claim for deduction in such letter, the Commissioner (Appeals) or the ITAT, before whom such deduction was specifically claimed was duty bound to consider such claim; In light of the above, the Appellant prays Learned CIT(A) to be directed to compute the correct claim of deduction under section 80JJAA of the Act in the light of details or submissions made by the Appellant company in this regard. The Appellant craves to leave to submit such further facts at any time before or at the time of hearing of the appeal, so as to enable the Learned Income Tax Appellate Tribunal (ITAT) to decide this appeal according to law.” Brief facts of the case are as under:

5 ITA 4095 & 4096/Mum/2023; A.Y.2018-19, 2019-20 SBI Life Insurance Company Limited liability whether direct or indirect arising from happening of no event or the fulfilment or non-fulfilment contingency, obligation or undertaking whatsoever and to carry on transfer or any every kind of life insurance and reinsurance whether indoor or outside ending. 2.2 During the assessment proceedings the Ld.AO issued show caused dated 23/03/2022 calling upon the assessee as to why the actuarial surplus in Form I should not be taxed as income of insurance business as per provisions of the Act. The Ld.AO also called upon the assessee to furnished as to why the net profit from shareholders account should not be taxed as income from other business activities as per provisions of section 28 to 43B other than the activity of insurance business as per section 44 of the Act. The Ld.AO also called upon the assessee to furnish the details as to why the dividend income claimed to be exempt u/s.10(34) of the Act should not be treated as income from other business activity in the hands of the assessee. The assessee was also called upon to furnished the expenditure u/s.14A not disallowed in the light of the income alleged to be exempt u/s.10(34) of the Act. The assessee was also called upon to justify the exemption claimed u/s.10(23AAB) and 10(15) of the Act. Based on the reply filed by the assessee on the above issue the Ld.AO rejected the contention of the assessee and made additions in respect of the issues under the head income from other sources. The Ld.AO also reduced the deduction claimed u/s.80JJAA to Rs.4,27,47,671/- as against the claim of assessee at Rs.13,80,23,106/-.

6 ITA 4095 & 4096/Mum/2023; A.Y.2018-19, 2019-20 SBI Life Insurance Company Limited Aggrieved by the order of the Ld.AO assessee preferred appeal before the Ld. CIT(A).

Aggrieved by the order of the Ld.CIT(A) the assessee is in appeal before this Tribunal.

7 ITA 4095 & 4096/Mum/2023; A.Y.2018-19, 2019-20 SBI Life Insurance Company Limited Accordingly Ground No.1 raised by the assessee stands dismissed and liberty is granted to raise the issue in appropriate circumstances.

8 ITA 4095 & 4096/Mum/2023; A.Y.2018-19, 2019-20 SBI Life Insurance Company Limited 30% of the additional employee cost incurred during FY 2016-17 and the deduction amount of 2,88,31,392 representing 30% of additional employee cost incurred during FY 2017-18. 5.4 In support of the assessee enclosed revised manually signed Form 10DA obtained from a Chartered Accountant certifying the correct amount of deduction to be claimed in AY 2018-19 in aggregate, i.e. after considering claim of deduction pertaining to second year (i.e., AY 2018-19) of Rs. 6,54,44,043 in respect of additional employment cost of AY 2017-18. As regards deduction amount of 6,54,44,043 pertaining to additional employee cost incurred during FY 2016-17, a copy of Form 10DA certified by a Chartered Accountant was filed by the, assessee for AY 2017-18. 5.5 The Ld.AR submitted that both the authorities below rejected the claim of the assessee by observing that, the assessee had not made the claim by way of filing the revised return. The Ld.AR placed reliance on the decision of Hon’ble Supreme Court in case of Goetze (India) Ltd. v. CIT (supra). The relevant portion of the judgement is as under:

"4.4 The decision in question is that the power of the Tribunal under Section 254 of the Income Tax Act, 1961 is to entertain for the first time a point of law provided the fact on the basis of which the issue of law can be raised before the Tribunal. The decision does not in any way relate to the power of the Assessing Officer to entertain a claim for deduction otherwise than by filing a revised return. In the circumstances of the case, we dismiss the civil appeal. However, we make it clear that the issue in this case is limited to the power of the Assessing Authority and does not impinged on the power of the Income Tax Appellate Tribunal under Section 254 of the Income Tax Act, 1961. There shall be no order as to costs." 5.6 On the contrary, the Ld.DR relied on the orders passed by the authorities below.

9 ITA 4095 & 4096/Mum/2023; A.Y.2018-19, 2019-20 SBI Life Insurance Company Limited We have perused the submissions advance by both sides in the light of record placed before us.