Jignesh Naresh Jariwala vs Deputy Director of Income-tax, CPC, Bengaluru

Court/Forum: ITAT

Bench: Mumbai Bench 'F', Shri Narendra Kumar Billaiya (Accountant Member) and Shri Anikesh Banerjee (Judicial Member)

Order Date: 2025-09-04

Outcome: Assessee

Sections: Section 89A, Section 143(1), Rule 21AAA

Core Ratio

Once Form 10EE is filed for a previous year, the option exercised continues to apply to all subsequent years without the need for refiling.

Outcome

The appeal filed by the assessee was allowed, and the relief claimed under Section 89A amounting to Rs. 4,34,661/- was directed to be granted to the assessee.

Favourability

Assessee

Core Issue

The central legal question was whether the assessee was required to file Form 10EE for each assessment year to claim relief under Section 89A, despite having filed it in a previous year.

Facts of the Case

The assessee, a resident individual, filed a return for AY 2023-24 claiming relief under Section 89A for income accrued in a retirement benefit account in the USA. The CPC disallowed the relief due to non-filing of Form 10EE for AY 2023-24, despite it being filed for AY 2022-23.

Arguments by Assessee

The assessee argued that Form 10EE was already filed for AY 2022-23, and as per Rule 21AAA(6), the option exercised applies to all subsequent years, negating the need for refiling.

Arguments by Revenue

The Revenue contended that the relief was rightly denied as the assessee did not file Form 10EE for AY 2023-24.

Key Sections & Provisions

Section 89A allows relief for income from retirement accounts in notified countries. Rule 21AAA(6) specifies that once the option is exercised, it applies to all subsequent years.

Ratio Decidendi

The tribunal held that the procedural requirement of filing Form 10EE is satisfied once it is filed for any previous year, and it continues to apply to subsequent years as per Rule 21AAA(6). Therefore, denial of relief under Section 89A on procedural grounds of non-filing for subsequent years is not sustainable.

Court Reasoning & Analysis

• The tribunal noted that Rule 21AAA(6) clearly states the option once exercised applies to all subsequent years.
• The procedural requirement of filing Form 10EE is satisfied once for any previous year.
• Denial of relief on procedural grounds is contrary to the rule's mandate.
• The assessee's filing for AY 2022-23 suffices for subsequent years.

Key Observations

• The tribunal observed that the procedural requirement was misinterpreted by the Revenue.
• The denial of relief was not sustainable in law given the clear provisions of Rule 21AAA.

Related Issues

• Procedural compliance in tax filings
• Interpretation of tax rules and regulations
• Relief claims under international taxation provisions

Important Passages

• Once Form No. 10EE has been filed in respect of a previous year, the option exercised therein continues to apply to all subsequent previous years.

Practical Takeaway

Practitioners should note that once procedural compliance is met for a specific tax relief, it may not need to be repeated annually if the rules provide for continuity.

Supporting Judgments

• Twylight Infrastructure Pvt Ltd vs Income Tax Officer Ward 25 3 Delhi and Ors. (HC) — Approval from the specified authority is mandatory for issuing reassessment notices under Section 148.
• GM Modular Private Limited vs Principal Commissioner of Income Tax – 1 and Ors (HC) — A bona fide claim based on a binding judicial precedent cannot attract penal consequences even if the precedent is later reversed.
• Commissioner of Income Tax (Central)-III vs Kabul Chawla (HC) — Additions to income under Section 153A can only be made based on incriminating material found during the search.
• Interglobe Technology Quotient Private Limited vs ACIT (ITAT, 2024) — CSR contributions can be eligible for deduction under section 80G if they meet the necessary conditions.
• Commissioner of Income Tax vs M/s. Manjunatha Cotton and Ginning Factory (HC, 2012) — The imposition of penalty under Section 271(1)(c) requires clear evidence of concealment or inaccurate particulars, which was not established in this case.
• Principal Commissioner of Income Tax 2 vs Gruh Finance Ltd. (HC, 2018) — The absence of evidence of non-disclosure of income negates the basis for imposing a penalty under Section 271(1)(c).

Contrary Judgments

• J K Investo Trade (India) Limited vs DCIT (ITAT, 2023) — The assessee is eligible to claim deduction under Section 80G irrespective of the fact that the corpus contribution relates to CSR activities.
• AT & T Global Network Services India Private Limited vs Assistant Commissioner of Income Tax (ITAT) — Inadvertent errors in reporting should not preclude the allowance of legitimate deductions if the factual basis is verified.
• M/s. Alubound Dacs India Private Limited vs. Dy. CIT (ITAT, 2024) — CSR expenses mandated by law can be claimed as a deduction under Section 80G if they meet the stipulated conditions.
• The Commissioner of Income-Tax, Bombay City II vs Shri Sitaldas Tirathdas (SC) — Income is not deductible if it is applied to discharge an obligation after it reaches the assessee.
• Commissioner of Income Tax vs P. Mohanakala (SC) — The opinion of the Assessing Officer that the explanation offered by the assessee is not satisfactory constitutes prima facie evidence against the assessee.
• A2455 Madurai Electricity System PSCS vs The Income Tax Officer (ITAT) — The Tribunal remanded the case to allow the assessee another opportunity to substantiate its claim for deduction under Section 80P(2)(a)(i).