2023 (8) TMI 382 - AT - Income Tax

Income taxable in India - salary derived from Tanzania - resident but not ordinarily resident in India - eligibility of Relief u/s 90 - TDS deducted in Tanzania as per the DTAA within the Governments of India and Tanzania - assessee has belatedly filled the required Form No.67 alongwith certificate of tax withheld issued by the Tanzanian Revenue Authorities - HELD THAT - The observation of the CIT(A) that the assessee has not disclosed the salary from Tanzania appears to be incorrect as the assessee has categorically in his return of income mentioned salary which is none other than the salary derived from Tanzania. It is pertinent to note that the late filing of Form No.67 cannot deny the entitlement of the assessee the benefit of treaty when the salary earned is from Tanzania and there is DTAA between India and Tanzania. It is undoubtedly clear that the salary is earned outside India and the assessee has paid tax on the said element on foreign country and, therefore, the assessee cannot be taxed twice on the same amount. This will amount to double taxation. Hence, the CIT(A) as well as the Assessing Officer was not right in denying the claim of the assessee. Appeal of the assessee is thus allowed.

Summary

Issues:
The appeal involves the denial of relief under Section 90, consideration of late filing of Form 67 for treaty benefit, and the levy of interest under sections 234B/C/D of the Income Tax Act, 1961.

Relief under Section 90:
The assessee, an individual, filed the return for A.Y. 2020-21 as a resident but not ordinarily resident in India, declaring total income including earnings from India and Tanzania. The assessee claimed relief under Section 90 for TDS deducted in Tanzania as per the DTAA between India and Tanzania. Despite filing Form No.67 belatedly, the CPC did not grant the claimed relief, leading to a demand. The CIT(A) upheld this decision. However, the AR argued that the delay in filing Form No.67 was due to obtaining the required certificate from Tanzanian Revenue Authorities. The AR contended that the income from Tanzania had been taxed there, and the denial of relief under Section 90 was unjust. The Tribunal agreed, emphasizing that the assessee cannot be taxed twice on the same income, preventing double taxation.

Late Filing of Form 67 for Treaty Benefit:
The delay in filing Form No.67 was a crucial point of contention. The DR argued that since the assessee did not initially declare the Tanzanian salary, the late filing of Form No.67 should not be overlooked. However, the Tribunal noted that the salary from Tanzania was indeed disclosed in the return, and the late filing of Form No.67 should not bar the assessee from treaty benefits when there is a DTAA between India and Tanzania.

Levy of Interest under Sections 234B/C/D:
The CIT(A) had also confirmed the levy of interest under sections 234B/C/D of the Act, which was challenged by the assessee. The Tribunal, after considering all relevant material, found in favor of the assessee, stating that the denial of the claim and the levy of interest were not justified. Consequently, the appeal of the assessee was allowed, emphasizing the prevention of double taxation in cases involving income from foreign sources.

Conclusion:
The Tribunal allowed the appeal of the assessee, highlighting the incorrect denial of relief under Section 90, the importance of preventing double taxation on foreign income, and the significance of honoring treaty benefits as per the DTAA between India and Tanzania.