2023 (5) TMI 151 - AT - Income Tax

Denial of foreign tax credit - assessee has not filed a statement in Form-67 on or before the due date specified for filing the return of income u/s. 139(1) - Extension of due date for filling returns due to COVID outbreak - AR argued that the assessee filed its original return of income on 15/2/2021 which is the extended due date allowed by the Central Board of Direct Taxes CBDT due to Covid-19 - HELD THAT - Admittedly, the foreign tax credit is claimed by the assessee by filing the statement in Form-67 on 31/3/2021. We find that as argued by the Ld. AR, THE TAXATION AND OTHER LAWS (RELAXATION AND AMENDMENT OF CERTAIN PROVISIONS) ACT, 2020 allows any statement to be filed on or before 31/3/2021. As per Sl.No.4(b) of the Press Release for extension of time limits dated 30/12/2020, the period has been extended for filing the return of income upto 15/2/2021. We therefore find that the assessee has rightly filed the return of income on or before the due date for filing the return of income and also the statement in Form-67 within the extended due date of 31/3/2021. As in the present case the assessee has filed the return of income and the statement in Form-67 within the respective due dates as extended by the Ministry of Finance, Government of India. We are therefore of the considered view that the foreign tax credit shall be allowed to the assessee. Decided in favour of assessee.

Summary

Issues involved:
The issues involved in the judgment are the denial of foreign tax credit claimed by the assessee due to non-filing of statement in Form-67 within the specified due date under the Income Tax Act, 1961.

Summary:

Issue 1: Denial of foreign tax credit by Ld. CIT(A)
The appeal was filed by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals) denying the foreign tax credit claimed by the assessee. The Ld. CIT(A) dismissed the appeal stating that the assessee did not file a statement in Form-67 by the due date specified for filing the return of income under section 139(1) of the Act.

Issue 2: Compliance with extended due date
The Ld. AR argued that the original return of income was filed within the extended due date allowed by the CBDT due to Covid-19. The statement in Form-67 was filed on 31/3/2021, which the Ld. AR contended was within the extended due date as per the provisions of THE TAXATION AND OTHER LAWS (RELAXATION AND AMENDMENT OF CERTAIN PROVISIONS) ACT, 2020.

Issue 3: Tribunal's decision
After hearing both parties, the Tribunal found that the assessee had filed the return of income and the statement in Form-67 within the respective extended due dates as per the provisions applicable during the Covid-19 pandemic. The Tribunal distinguished the present case from a previous case relied on by the Ld. DR, where the filing was delayed significantly. The Tribunal held that the foreign tax credit claimed by the assessee should be allowed, directing the Ld. AO to verify and grant the credit accordingly.

In conclusion, the Appellate Tribunal ITAT VISAKHA PATNAM allowed the appeal filed by the assessee, directing the Ld. AO to grant the foreign tax credit claimed after verifying its correctness.