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2024 (7) TMI 345 - AT - Income TaxDenial of Foreign Tax Credit on delayed filling Form no. 67 - Filing of form 67 is a directory OR mandatory requirement - As submitted tax was paid overseas and Form 67 was filed before the end of the assessment year - HELD THAT - As decided in VAIBHAV SINGHAL case 2024 (5) TMI 1441 - ITAT DELHI CIT (A) has primarily taken adverse inference on the ground that necessary claim was not pressed before the AO but the claim was very much before the AO. In the interest of justice and exercising our discretion as spelt out in the case of Goetze (India) Ltd. 2006 (3) TMI 75 - SUPREME COURT , we admit this claim of the assessee in the light of the submissions above and case laws cited. We remit the issue to the file of AO. AO shall duly consider the claim of the assessee in the light of the documents already submitted and decide as per law on this claim duly admitted. We find that facts in the present case are identical to the aforesaid case. Accordingly, we follow the aforesaid order and remit the issue to the file of AO with similar directions. Appeal of the assessee is allowed for statistical purposes.
Issues involved:
1. Disallowance of Foreign Tax Credit by the assessing officer. 2. Late filing of Form 67 for claiming foreign tax credit. Issue 1: Disallowance of Foreign Tax Credit by the assessing officer: The appeal was against the order of the ld. CIT (Appeals)/National Faceless Appeal Centre (NFAC) dated 28.07.2023 for the assessment year 2020-21. The assessee had claimed a foreign tax credit (FTC) of Rs. 16,74,950/- by filing Form 67 u/s 90(2) of the Income Tax Act, 1961. However, the CPC denied the FTC and raised a demand. The assessee requested rectification under section 154, which was rejected. The ld. CIT (A) upheld the denial of FTC by stating that the Form 67 was filed beyond the due date of filing the return, hence, the credit was rightly not granted. The CIT (A) emphasized that the provisions of section 143(1) and 154 only allow considering a mistake apparent from the record. The CIT (A) dismissed the grounds of appeal, upholding the assessing officer's action. The assessee then appealed to the ITAT. Issue 2: Late filing of Form 67 for claiming foreign tax credit: The assessee argued before the ITAT that Rule 128(9) does not provide for disallowance of FTC due to a delay in filing Form 67. They contended that filing Form 67 is a directory requirement, not a mandatory one, and that the Income Tax Act and Double Taxation Avoidance Agreement (DTAA) override rules. The assessee claimed that FTC should not be disallowed solely due to late filing of Form 67, as it is a procedural formality. The ITAT considered the submissions of both parties and referred to a previous case where a claim was admitted in the interest of justice. The ITAT remitted the issue to the AO with similar directions to consider the claim of the assessee in light of the documents submitted and decide as per law. Consequently, the appeal of the assessee was allowed for statistical purposes. In conclusion, the ITAT allowed the appeal of the assessee concerning the disallowance of Foreign Tax Credit by the assessing officer and the late filing of Form 67 for claiming foreign tax credit. The ITAT remitted the issue to the AO for reconsideration in line with the submissions and legal provisions, ultimately deciding in favor of the assessee for statistical purposes.
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