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TMI Blog2023 (4) TMI 729X X X X Extracts X X X X X X X X Extracts X X X X ..... risdictional AO to decide the claim of the foreign tax credit on merits, after accepting the Form No.67 and other related documents filed by the assessee. Accordingly, grounds raised by the assessee are allowed for statistical purposes. - ITA no.3238/Mum./2022 - - - Dated:- 17-2-2023 - SHRI M. BALAGANESH, ACCOUNTANT MEMBER AND SHRI SANDEEP SINGH KARHAIL, JUDICIAL MEMBER For the Assessee : Shri Mukesh Trivedi For the Revenue : Shri Indira Adakil ORDER PER SANDEEP SINGH KARHAIL, J.M. The present appeal has been filed by the assessee against the impugned order dated 20/12/2022, passed under section 250 of the Income Tax Act, 1961 ( the Act‟) by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [ learned CIT(A)‟], which in turn arose from the order dated 17/03/2021, passed under section 154, for the assessment year 2019-20. 2. In this appeal, the assessee has raised the following grounds: 1. The Appellate Order of Learned Commissioner of Income tax Appeals National faceless Appeals centre Hereafter referred to as CIT(A) is bad and erroneous both on facts and in law 2. On the facts and in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee joined a new company in Rotterdam Netherlands with effect from 01/01/2019. For the year under consideration, the assessee was in India for more than 183 days and therefore her residential status is resident‟ for the purpose of the Act. While filing her return of income on 01/08/2019, the assessee included all her income including those earned in India and also those earned in the Netherlands. In her return of income, the assessee claimed relief of Rs.3,29,929, as per the provisions of section 90/90A of the Act, in respect of tax paid outside India. The return filed by the assessee was processed vide intimation dated 18/01/2021, issued under section 143(1) of the Act, whereby the foreign tax credit of Rs.3,29,929, claimed by the assessee under section 90/90A of the Act was denied. Thereafter, the assessee filed Form No.67 on 09/02/2021, along with certificates/statements specifying the nature of income and amount of tax paid in order to claim the credit of foreign tax paid. The assessee also filed a rectification application under section 154, which was also disposed off vide order dated 17/03/2021, assessing the same income as per intimation issued under section 143(1) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (9) and thus claim of the assessee was rejected. 8. We find that under Rule 128(9), as it stood during the year under consideration, provided that the statement in Form No.67, referred to in clause (i) of sub-rule (8) and the certificate or the statement referred to in clause (ii) of sub-rule (8) shall be furnished on or before the due date specified for furnishing the return of income under sub-section (1) of section 139, in the manner specified for furnishing such return of income. Thus, during the year under consideration, the assessee was required to furnish Form No. 67 on or before the due date of filing the return of income under section 139(1) of the Act, as per the provisions of Rule 128(9). We further find that Rule 128(9) has been substituted by the Income-tax (Twenty-seventh Amendment) Rules, 2022, w.r.e.f. 01/04/2022, and the same reads as under: (9) The statement in Form No. 67 referred to in clause (i) of sub-rule (8) and the certificate or the statement referred to in clause (ii) of sub-rule (8) shall be furnished on or before the end of the assessment year relevant to the previous year in which the income referred to in sub-rule (1) has been offered to tax o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mandatory, rather it is directory in nature. This is because, Rule 128(9) does not provide for disallowance of FTC in case of delay in filing Form No. 67. Same view is also taken by a coordinate division bench in Vinodkumar Lakshmipathi V CIT(A) NFAC ITA No.680/Bang./2022 06.09.2022. It is well settled that while laying down a particular procedure, if no negative or adverse consequences are contemplated for non-adherence to such procedure, the relevant provision is normally not taken to be mandatory and is considered to be purely directory. Admittedly, Rule 128 does not prescribe denial of credit of FTC. Further the Act i.e. section 90 or 91 also do not prescribe timeline for filing of such declaration on or before due date of filing of ROI. Further rule 128 (4) clearly provides the condition where the foreign tax credit would not be allowed. Rule 128 (9) does not say that if prescribed form would not be filed on or before the due date of filing of the return no such credit would be allowed. Further by the amendment to the rule with effect from 1 April 2022, the assessee can file such form number 67 on or before the end of the assessment year. Therefore, legislature in its own wisd ..... X X X X Extracts X X X X X X X X Extracts X X X X
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