Case Law Details
Microsec Insurance Brokers Ltd. Vs ITO Ward (ITAT Kolkata)
It is observed that the penalty of Rs. 5,00,000/- in question was levied by IRDA for non-compliance of Regulation 34(2) of IRDA (insurance brokers) Regulations, 2002. As pointed out by the learned counsel for the assessee, the assessee company as a broker was required to observe certain restrictions and follow certain procedures as prescribed in regulation 34.There was however a non-compliance on the part of the assessee of the said regulation which resulted in imposition of penalty by IRDA.
In the case of M/s. Dayco Securities Pvt. Ltd. (supra) cited by the learned counsel for the assessee, the assessee as a member of National Stock Exchange was bound to abide by rules and regulations and by-laws of the National Stock Exchange. There was however violation of such rules and regulations by the assessee and when the question of allowability of fine imposed by the National Stock Exchange for such violation arose, the Division Bench of this Tribunal held that violation of such rules and regulations could not be treated as violation of statutory law or rule. It was also held by the Tribunal that the fine paid by the assessee for such violation was only for non observation of internal regulation of Stock Exchange and the same could not be equated with violation of statutory rule or law warranting disallowance of fine.
In my opinion, the ratio of the decision of Division Bench of this Tribunal in the case of M/s. Dayco Securities Pvt. Ltd. (supra) is squarely applicable to the issue involved in the present case and respectfully following the same, I delete the disallowance made by the A.O. and confirmed by the Ld. CIT(A) on account of penalty charges levied by the IRDA on the assessee.
FULL TEXT OF THE ITAT JUDGMENT
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