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2024 (8) TMI 751 - AT - Income TaxDenying the relief claimed u/s 90 - CIT(A) denying the relief on the ground that the Appellant has not filed Form 67 within the due date of filing of return of income prescribed u/s 139(1) - assessee has paid the taxes outside India u/s 90 - assessee filed revised return of income - HELD THAT - Assessee has filed return of income beyond the due date of filing of return of income, but the same was filed within the extended due date of the return of income. The revised return of income was also filed on 09.06.2020 and Form 67 was also filed within the extended period of filing of the due return. This aspect was not taken into account and, in fact, the assessee has paid the taxes outside India u/s 90 of the Act read with Article 23 of the India Netherlands DTAA. This fact is not denied by the AO or by the CIT(A). The late filing of Form No.67 cannot be the reason for denying the entitlement of the assessee in respect of the benefit of treaty when the salary earned in Netherlands and the tax thereof was paid in the said foreign country as per the provisions of Article 23 of the DTAA between India and Netherlands. The same should have been taken into account. The salaries earned outside India and this fact was not disputed, in fact, the payment of tax in foreign country was also not disputed. Therefore, the assessee cannot be taxed twice on the same amount which results into double taxation. CIT(A) as well as AO was not right in denying the claim of the assessee. Accordingly, the appeal filed by the assessee is allowed.
Issues:
1. Relief under section 90 of the Income Tax Act denied. 2. Consequential levy of interest under sections 234B and 234C of the Act. Analysis: 1. Relief under section 90 of the Income Tax Act denied: - The assessee filed a revised return of income claiming relief under section 90 of the Act of INR 2,65,367. The CIT(A) denied the relief stating that Form 67 was not filed within the due date of the return of income under section 139(1) of the Act. - The assessee argued that Form 67 was submitted along with the revised return of income as required by Rule 128 of the Income-tax Rules, 1962. The CIT(A) failed to appreciate that the original and revised returns were filed within the respective due dates. - The Appellant contended that Form 67 is a procedural requirement and, based on the Act and the Double Taxation Avoidance Agreement (DTAA) with Netherlands, the relief should be granted. The Appellant requested an opportunity to rectify any defects in the submission. 2. Consequential levy of interest under sections 234B and 234C of the Act: - The CIT(A) confirmed the levy of interest under sections 234B and 234C of the Act, despite the Appellant filing a revised return showing NIL interest. The Appellant disputed this levy. 3. General: - The Appellant, a resident in India for AY 2019-20, was on deputation to Netherlands. The Appellant claimed relief under section 90 of the Act for taxes paid in Netherlands. The Assessing Officer issued a demand, leading to the appeal before the CIT(A). - The Appellant argued that taxes paid in Netherlands should be considered for relief under the India-Netherlands DTAA. The Appellant submitted necessary documentation, including Form 67, within the extended due date for filing the return. - The Tribunal noted that the Appellant paid taxes in Netherlands as per the DTAA, and the late filing of Form 67 should not negate the entitlement to treaty benefits. Denying the relief would result in double taxation, which is unjustifiable. - The Tribunal allowed the appeal, emphasizing that the Appellant should not be taxed twice on the same income. The decision of the CIT(A) and the Assessing Officer was overturned, and the relief under section 90 was granted to the Appellant. In conclusion, the ITAT Ahmedabad allowed the appeal of the assessee, granting relief under section 90 of the Income Tax Act and overturning the consequential levy of interest. The Tribunal emphasized the importance of honoring international tax agreements to prevent double taxation and highlighted the procedural compliance of the assessee in claiming the relief.
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