Priyesh Singhania Vs ITO (ITAT Raipur)
ITAT Restores 10(10D) Exemption -CPC Exceeded Powers – 143(1) Adjustment on Insurance Policy Quashed
Assessee had taken a Reliance Life Insurance policy on 31.03.2011 with sum assured of Rs. 20,00,000/- & paid single premium of Rs. 5,00,000/-. On surrender in April 2016, he received Rs. 7,41,718/- on which TDS was deducted u/s 194DA. While processing return u/s 143(1), CPC added the maturity proceeds to total income, denying exemption u/s 10(10D). CIT(A) confirmed adjustment holding that premium exceeded 20% of sum assured, making exemption inapplicable.
Assessee contended that policy was issued prior to 01.04.2012 & surrendered after 5 years, hence exemption u/s 10(10D) was fully available. It was further argued that CPC exceeded jurisdiction, as such adjustments requiring legal interpretation & factual verification cannot be made u/s 143(1). Reliance was placed on ITAT Kolkata in Anita Seth v. DCIT CPC (ITA No. 109/Kol/2022).
Tribunal noted that identical issue had already been decided in favour of another family member in Mitesh Singhania v. ITO (ITA No. 410/RPR/2025, order dated 22.07.2025). It held that exemption u/s 10(10D) was wrongly denied since provision restricting exemption where premium exceeds 20% was not applicable in this case. It further observed that CPC had acted beyond powers by making addition requiring legal interpretation. Following the ratio of Sanjeev Kumar v. ITO (ITAT Delhi) & Sarika Jain v. CIT (407 ITR 254, All HC), Tribunal ruled that addition made on wrong appreciation of facts & law was perverse & unsustainable. Accordingly, entire addition of Rs. 7,41,718/- was deleted & appeal allowed.
