Income Tax Appellate Tribunal Remands Case for Fresh Adjudication in Anupama Agarwal v. DCIT

Principles of Natural Justice Violated; Exemption Claim Under Section 10(10D) to Be Re-examined  

In a significant development, the Income Tax Appellate Tribunal (ITAT) Delhi Bench 'SMC' has remanded the case of Anupama Agarwal v. Deputy Commissioner of Income Tax (DCIT) for fresh adjudication. The tribunal found that the principles of natural justice were violated during the previous proceedings as fresh evidence was not considered, and a remand report from the Assessing Officer (AO) was lacking. The appeal, registered under ITA No. 5676/Del of 2025, was heard by Vice President Shri Mahavir Singh, with the decision delivered on October 28, 2025.

The case concerns the appellant, Anupama Agarwal, who filed her income tax return for the Assessment Year (AY) 2018-19, declaring a total income of Rs. 15,57,940. However, the case was selected for scrutiny under the Centralized Processing Centre Automated Scrutiny Selection (CASS) due to issues related to investment in immovable property and capital gains deduction claims. The assessment was completed with an addition of Rs. 17,21,385 under Section 69, leading to a total income assessment of Rs. 32,79,330.

The CIT(A) had previously upheld the addition, prompting Agarwal to appeal to the ITAT. During the proceedings, it was noted that the AO had rejected a deduction claimed under Section 54 due to a lack of evidence supporting the genuineness of the long-term capital gains claim. Agarwal contended that the amount in question was from the maturity of Unit Linked Insurance Schemes, which is exempt under Section 10(10D) of the Income Tax Act, 1961. She argued that despite not specifically claiming the exemption in her return, she was entitled to it.

The CIT(A) had admitted additional evidence and attempted to obtain a remand report from the AO, which was not received despite multiple reminders. Consequently, the CIT(A) adjudicated the issues without the report, concluding that the exemption claim was not raised during the original proceedings under Section 143(3).

In its order, the ITAT emphasized the need for a fresh examination of additional evidence and directed the AO to adjudicate the matter anew. The tribunal instructed the AO to provide Anupama Agarwal with an opportunity to present her case and directed her to furnish all requisite evidence and cooperate during the proceedings.

The ITAT's decision underscores the importance of adhering to the principles of natural justice and ensuring that all evidence is duly considered in tax-related adjudications. The tribunal's directive for a fresh review aims to ensure a fair and just resolution of the case.

Bottom Line:

Income Tax - Remittance of matter to Assessing Officer (AO) for fresh adjudication - Principles of natural justice violated due to non-consideration of fresh evidence and lack of remand report from AO - Exemption claim under Section 10(10D) to be re-examined - Assessee directed to furnish requisite evidences and cooperate during proceedings.

Statutory provision(s): Section 10(10D), Section 54, Section 69, Section 115BBE of the Income Tax Act, 1961

Anupama Agarwal v. DCIT, (ITAT)(Delhi Bench 'SMC') : Law Finder Doc Id # 2811851