Jignesh Naresh Jariwala Vs Deputy Director of Income Tax (ITAT Mumbai)
In the case of Jignesh Naresh Jariwala vs. Deputy Director of Income Tax, the Income Tax Appellate Tribunal (ITAT), Mumbai, addressed the issue of a taxpayer being denied a benefit under Section 89A of the Income Tax Act for not filing Form 10EE in a subsequent assessment year, even though they had filed it in a previous year. The Tribunal ruled in favor of the taxpayer, clarifying that once Form 10EE is submitted, the option for deferred taxation on foreign retirement accounts applies automatically to all subsequent years.
The assessee, Jignesh Naresh Jariwala, a resident individual, had filed his income tax return for the Assessment Year (AY) 2023-24. In his return, he claimed a relief of ₹4,34,659 under Section 89A on income accrued in his US-based retirement accounts, including Vanguard, Fidelity, and Avenir accounts. This section allows a person to defer the taxation of income from a “specified retirement account” in a “notified country” until the year it is withdrawn or redeemed in that country.
The assessee had previously exercised this option by filing Form 10EE for the Assessment Year 2022-23. According to Rule 21AAA of the Income Tax Rules, 1962, particularly sub-rule (6), this option, once exercised, “shall apply to all subsequent previous years and cannot be subsequently withdrawn.” Despite this, the Central Processing Centre (CPC), Bengaluru, disallowed the relief in the assessee’s return for AY 2023-24, stating that a new Form 10EE had not been filed for the current year. The CPC proceeded with an intimation under Section 143(1) of the Act, rejecting the claim.
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