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2022 (9) TMI 694 - AT - Income TaxDisallowance of Foreign tax credit u/s. 90 - CIT(A) taken view that belated filing Form no. 67 was violation of Rule 128(9) of the Act and disallowed the claim for tax credit to the assessee - as alleged that FTC had not been paid by the assessee but by his employer and therefore, no credit of the same would be granted to the assessee - HELD THAT - We after going through the facts of the cases find that FTC has been offered by the assessee(s) as perquisites in the gross total income and tax has been paid thereon. Once this income has been offered to tax, the corresponding credit of the same would be available to the assessee(s). Therefore, once the payments has been included by the assessee(s) in the income and tax have been paid thereon then this credit would certainly be available to the assessee(s). So far as filing of Form 67 is concerned the same has been held to be mere directory requirement by the SMC Bangalore Tribunal 2022 (2) TMI 752 - ITAT BANGALORE This decision has been followed by co-ordinate bench of Bangalore Tribunal in M/s 42 Hertz Software India Pvt. Ltd. 2022 (3) TMI 834 - ITAT BANGALORE and also before the Madras bench in the case of Shri. Govindarajan Roopkumar 2022 (9) TMI 557 - ITAT CHENNAI - We also concur with the same. It is the findings of Ld. CIT(A) that the assessee(s) has already filed Form No.67 although belatedly. Therefore, we direct Ld. CIT(A) to verify the forms and allow tax credit to the assessee(s), if found in order. Appeals filed by assessee(s) are partly allowed in terms of our above order.
Issues:
- Appeal against orders of Commissioner of Income Tax (Appeals) - Disallowance of relief claimed under section 90/90A of the Income Tax Act - Denial of foreign tax credit (FTC) by the Assessing Officer - Non-filing of mandatory Form 67 - Dispute regarding payment of FTC by the assessee or employer Analysis: 1. Appeal against Commissioner of Income Tax (Appeals) Orders: The appeals before the Appellate Tribunal ITAT Chennai arose from orders of the Commissioner of Income Tax (Appeals) for different assessment years. The Tribunal consolidated the appeals as the facts and issues were common for the sake of convenience. 2. Disallowance of Relief Claimed under Section 90/90A: The appellant assessees raised various grounds of appeal, challenging the orders of the Commissioner of Income Tax (Appeals). They contended that the orders were bad, erroneous in law, and against the principles of natural justice. Specifically, they disputed the confirmation of penalties for "concealment of income" instead of "furnishing inaccurate particulars of income." The Tribunal considered these grounds during the hearing. 3. Denial of Foreign Tax Credit (FTC): In one case, the appellant's claim for foreign tax credit (FTC) was denied by the Assessing Officer due to non-compliance with Rule 128 of the Income Tax Rules. The Commissioner of Income Tax (Appeals) upheld this denial, stating that the necessary evidence for claiming FTC was not filed within the specified timeline. The Tribunal reviewed this decision during the hearing. 4. Non-filing of Mandatory Form 67: Another issue involved the non-filing of mandatory Form 67 by the appellants within the due date for filing returns under section 139(1) of the Income Tax Act. The Commissioner of Income Tax (Appeals) disallowed the claim for tax credit based on this non-compliance. The Tribunal examined this aspect during the proceedings. 5. Dispute Regarding Payment of FTC by Assessee or Employer: Regarding the dispute over the payment of FTC by the assessee or the employer, the Tribunal noted that the FTC had been offered by the assessee as perquisites in the gross total income, and tax had been paid accordingly. The Tribunal held that once the income had been included in the tax return and tax paid on it, the corresponding credit should be available. Additionally, the Tribunal considered the filing of Form 67 as a directory requirement rather than mandatory, citing precedents from other Tribunals. 6. Decision and Order: After hearing the arguments and reviewing the facts of the cases, the Tribunal partially allowed the appeals filed by the assessees. It directed the Commissioner of Income Tax (Appeals) to verify the belatedly filed Form 67 and allow tax credit if found in order. The order was pronounced in court on 26th August 2022 at Chennai. This detailed analysis covers the key issues raised in the legal judgment delivered by the Appellate Tribunal ITAT Chennai, providing a comprehensive overview of the facts, arguments, and decisions made in each case.
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