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2023 (10) TMI 621 - AT - Income TaxForeign Tax Credit (FTC) denied - assessee did not file statement in Form No. 67 before the due date for filing the return u/s 139(1) but along with the revised return u/s 139(5) - HELD THAT - The assessee due to factors beyond her control was unable to file Form 67 along with the original return u/s 139(1) - on obtaining the information/documents assessee could file Form 67 along with the revised return u/s 139(5) - The reason for the delay was stated to be that due to the death of her employer it resulted in procedural delay in receipt of documents from Ghana with respect to foreign income. Identical issue arose in the case of Nirmala Murli Relwani 2022 (12) TMI 395 - ITAT MUMBAI who is the mother of the assessee and on identical facts held that the assessee is entitled for foreign tax credit. Assessee is entitled for foreign tax credit. Since the claim of the assessee was denied on the technical aspect i.e. for not filing Form 67 along with the original return and without going into the merits of the claim, we deem it proper to direct the AO to decide the claim for foreign tax credit on merits after accepting Form 67 and other related documents filed by the assessee - Appeal of the assessee is allowed for statistical purpose.
Issues Involved:
1. Denial of Foreign Tax Credit (FTC) due to the timing of filing Form 67. 2. Interpretation of Rule 128(9) regarding the filing deadline for Form 67. 3. Impact of procedural delays and external factors on compliance. Summary: Denial of Foreign Tax Credit (FTC): The appeal was filed by the assessee against the order of the CIT (Appeals)/NFAC, which denied the Foreign Tax Credit (FTC) for the assessment year 2019-20. The denial was based on the fact that the assessee did not file Form 67 before the due date for filing the return under section 139(1) of the Income Tax Act, 1961, but did so along with the revised return under section 139(5). Interpretation of Rule 128(9): The main issue addressed was whether the assessee is entitled to FTC despite filing Form 67 along with the revised return under section 139(5) instead of the original return under section 139(1). The Tribunal noted that both the original and revised returns were filed within the extended due dates, and the delay in filing Form 67 was due to factors beyond the assessee's control, such as the death of the employer and procedural delays in receiving documents from Ghana. Impact of Procedural Delays and External Factors: The Tribunal referred to a similar case (Nirmala Murli Relwani Vs. ADIT) where it was held that mere delay in filing Form 67 would not preclude the assessee from claiming FTC. The Tribunal observed that Rule 128(9) does not mandate the disallowance of FTC for delayed filing of Form 67 and that recent amendments have extended the filing deadline to the end of the assessment year. Conclusion: The Tribunal concluded that the delay in filing Form 67 should not prevent the assessee from claiming FTC. The Assessing Officer was directed to decide the claim for FTC on merits after accepting Form 67 and other related documents. The appeal was allowed for statistical purposes, ensuring the assessee is provided with an adequate opportunity to be heard.
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