CENTRAL INFORMATION COMMISSION Club Building (Near Post Office) Old JNU Campus, New Delhi Tel: File No.CIC/DS/A/2011/001995/RM

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1 CENTRAL INFORMATION COMMISSION Club Building (Near Post Office) Old JNU Campus, New Delhi Tel: File No.CIC/DS/A/2011/001995/RM Appellant: Mr. Rakesh Kumar Gupta, New Delhi Public Authority: LIC of India, Mumbai Date of Hearing: Date of decision: Heard today, dated Appellant is present. The Public Authority is represented by Shri K.K.Das, Secretary, RTI, representing AA along with Shri Nanda, Secretary, Software Development, representing CPIO. The above parties were heard and records perused. 1

2 FACTS Vide RTI dated , appellant had sought information on Key Man Insurance taken in by LIC. 2. CPIO vide letter dated denied the information u/s 8(1)(e) and 7(9) of the RTI Act. 3. An appeal was filed. 4. AA vide order dated , upheld the decision of the CPIO. 5. Not satisfied with the response, he filed the present appeal. 6. The appellant has filed five identical RTI applications dated , seeking information on Keyman Insurance Policies with various offices of LIC, which have been registered with the Commission as follows:- 1. CIC/DS/A/2011/001860/RM LIC Eastern Zonal Office, Kolkota 2. CIC/DS/A/2011/001995/RM LIC Central Office, Mumbai. 3. CIC/DS/A/2011/001997/RM LIC Western Zonal Office, Mumbai 4. CIC/DS/A/2011/001998/RM LIC North Central Zonal Office,Kanpur 5. CIC/DS/A/2011/002381/RM LIC South Central Zonal Office, Hyderabad As the subject matter of all the five RTI is same they are being taken together. 7. It has been brought to our notice that three more identical RTI applications of the same date were filed with three different Zonal Offices of LIC, and the appeals of which were registered with the following numbers:- 2

3 1. CIC/DS/A/2011/00898 LIC Southern Zonal Office, Chennai 2. CIC/DS/A/2011/ LIC Central Zonal Office, Bhopal 3. CIC/DS/A/2011/ LIC Northern Zonal Office, Delhi The appeals in the above three cases were heard by the Bench of Mrs. Annapurna Dixit, Information Commissioner and vide order dated , the information was denied u/s 8(1)(d) and (e) of the RTI Act. 8. In the present appeal, the appellant has contended that these policies are assigned in favour of Key persons at around 15% of the amount paid by the Company resulting in tax evasion and siphoning of funds by Key persons. The information is being sought to protect the interest of minority shareholders and there was the issue of strong public interest. 9. The public authority have made their submissions on common lines, as follows:- a) The information pertaining to Keyman Insurance Policies is held by the LIC in a fiduciary capacity hence exempted u/s 8(1)(e). b) The information is of commericial confidence and hence exempt u/s 8(1)(d). c) The LIC does not maintain the data on Keyman Insurance Policies separately and it would be impossible to cull out the information from a data bank of 47 crore policies and would disproportionately divert resources- hence exempted u/s 7(9) of the Act. 10. The appellant in his further submissions requests that if it is not possible to extract the data as asked by him, he may be provided information in r/o the following policies:- Annual premium of more than Rs.5 lakh- of endowment policies. Policy related to table applicable to insurance policy number given in the letter by him related to Escort Group. And money siphoned of (85%) by Keyman in Escort Group exceed promoter present holding in the Escort Group. 3

4 And Keyman Insurance Policy sold by insurance agent Ms. Ritu Nanda/ Ritu Nanda Insurance Services Pvt. Ltd. and detail of Keyman to trace their other policy details. 11. The public authority submitted that it was not possible to extract even this data without sifting through 47 crore policies. 54. No doubt, the parties here, viz., the company as well as the individual taken huge benefit of these provisions, but it cannot be treated as the case of tax evasion. It is a case of arranging the affairs in such a manner as to evade the State exemption as provided in Section 10(10D) of the Act. Law is clear. Every assessee has the right to plan its affairs in such a manner which may result in payment of least tax possible, albeit, in conformity with the provisions of the Act. It is also permissible to the assessee to take advantage of the gaping holes in the provisions of the Act. The job of the Court is to simply look at the provisions of the Act and to see whether these provisions allow the assessee to arrange their affairs to ensure lesser payment of tax. It that is permissible, no further scrutiny is required and this would not amount to tax evasion In view of the above decision of the Hon ble Delhi High Court, the contention of the appellant that the issue of larger public interest involving tax evasion and siphoning of funds by Key persons, is devoid of any merit. DECISION 14. The Commission sees no reason to interfere with the decision of the CPIOs/AAs. The appeals are disposed of. Authenticated true copy forwarded to : 12. The issue of tax evasion in r/o Keyman Insurance Policies has been discussed in detail by the Hon ble Delhi High Court in the case of Commissioner of Income Tax V/s Rajan Nanda and 20 other writ petitions, dated The operative para of the Judgement is extracted below:- Sd/- (Rajiv Mathur) Central Information Commissioner 4

5 Shri Rakesh Kumar Gupta, 127, S.F.S. Flats DDA, C & D Block, Shalimar Bagh, Outer Ring Road, New Delhi The Executive Director & CPIO, Central Office, Yogakshema, Jeevan Bima Marg, Church Gate, Mumbai The Asstt. Secretary & Appellate Authority, Central Office, Yogakshema, Jeevan Bima Marg, Church Gate, Mumbai (Raghubir Singh) Deputy Registrar