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TMI Blog2023 (9) TMI 1401X X X X Extracts X X X X X X X X Extracts X X X X ..... lay in compliance of a procedural provision. Even otherwise, the said Form 67 filed by the assessee before the tax authorities was available before the AO when the intimation under section 143(1) of the Act was passed. Therefore, in such circumstances, in my view, there were no reasons with the tax authorities for making disallowance when the said Form 67 was very much available with the AO at the time of framing the assessment - assessee is entitled for the credit of FTC under section 90 - Decided in favour of assessee. - Hon ble Shri Sandeep Gosain, JM And Hon ble Shri Rathod Kamlesh Jayantbhai, AM For the Appellant : Shri Sidharth Ranka, Advocate And Shri Saurv Harsh, Advocate. For the Respondent : Shri A.S.Nehra, (Addl. CIT) ORDER PER: SANDEEP GOSAIN, J.M. This appeal by the assessee is directed against the order dated 17.05.2023 of ld. CIT (A), National Faceless Appeal Centre (NFAC), Delhi passed under section 250 of the IT Act, 1961 for the assessment year 2021-22. The assessee has raised the following grounds of appeal :- 1. That in the facts and in circumstances of the case and in law, the Id. Lower authorities has grossly erred in dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ights. It is one of their duties to assist a taxpayer in every reasonable way, particularly in the matter of claiming and securing reliefs and in this regard the Officers should take the initiative in guiding a taxpayer where proceedings or other particulars before them indicate that some refund or relief is due to him. This attitude would, in the long run, benefit the Department for it would inspire confidence in him that he may be sure of getting a square deal from the Department. Although, therefore, the responsibility for claiming refunds and reliefs rests with assessees on whom it is imposed by law, officers should:- (a) draw their attention to any refunds or reliefs to which they appear to be clearly entitled but which they have omitted to claim for some reason or other; (b) freely advise them when approached by them as to their rights and liabilities and as to the procedure to be adopted for claiming refunds and reliefs. 2. The appellant craves leave to add, alter, modify or amend any ground on or before the date of hearing. 2. The brief facts of the case are that assessee is an Individual and is not an ordinarily resident. The assessee is a foreign national. During t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Alisha), which deducted TDS of Rs. 51,563/-. In the same year the assessee appellant also received salary of Rs. 1,12,42,236/- from Grupo Tapas Torrent S.L. (Torrent) situated in Spain and on which tax of Rs. 37,41,228/- was deducted and paid in Spain. Accordingly, he has filed his return of Income on 08.09.2021 declaring total salary income of Rs. 1,20,67,236/- [11242236+825000] on which total tax payable was worked out at Rs. 40,15,776/- and the assessee paid self-assessment tax of Rs. 2,47,620/- after claiming deduction of tax paid in Spain (37,41,228/-) TDS deducted by Alisha (51,563/). 3. However, the id. Assessing Officer, CPC while processing the return under u/s 143(1) of the Act vide order dated 13.10.2022 has disallowed the credit of tax paid of Rs. 37,41,228/- in Spain and has raised demand of Rs. 43,52,848/ including interest. 4. That surprisingly in the Assessment order passed under section 143(1) itself in the Annexure TR (As computed) under the heading of Total tax relief available in respect of country where DTAA is applicable (section 90/90A) (Part of total of 1(d)) - Rs. 37,41,228/-, That the order acknowledges the Tax relief to be given to the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4.2023] while dealing with a similar issue has held that: As decided in case of Brinda Rama Krishna (2022 (2) TMI 752-ITAT BANGALORE] has observed that filing of Form 67 is not mandatory but directory requirement. CIT(A) in the case in hand however, has not followed the aforesaid judgment. The Bench is of considered opinion that Ld. first Appellate Authority being Subordinate to the Tribunal was supposed to follow the principles of law set down and without citing any proposition of law of binding nature contradictory could not have ignored the judgment on observation that it is not known as to whether the aforesaid decision has attained finality or not. Appeal of assessee is allowed. 6.3. The Hon'ble Income Tax Appellate Tribunal, Chennai Bench in the case of Jerry Nirmal Francis v. ADIT (2023 (3) TMI 146 vide order dated 28.02.2023] while dealing with a similar issue has held that: As we find that this issue is squarely covered in favour of the assessee by the decision of ITAT, Chennai in the case of Shri. Govindarajan Roopkumar [2022 (9) TMI 557 - ITAT CHENNAI] where under identical circumstances, the Tribunal by following the decision of ITAT Bangalore in the case of Ms. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h law. Appeal of the assessee is allowed. 6.5 The Hon'ble Income Tax Appellate Tribunal, Mumbai Bench in the case of Bhagwandas Tikamdas Khinani v. CIT (Appeals) [2022 (12) TMI 357 vide order dated 01.12.2022] while dealing with a similar issue has held that: mere delay in filing Form No. 67 as per the provisions of Rule 128(9), as they stood during the year under consideration, will not preclude the assessee from claiming the benefit of foreign tax credit in respect of tax paid outside India. Since in the present case, the claim of the assessee was denied on this technical aspect without going into the merits, therefore, we deem it appropriate to direct the jurisdictional Assessing Officer 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. 6.6. The Hon'ble Income Tax Appellate Tribunal, Bengaluru Bench in the case of Anju Agast Srivats v. ITO [2023 (3) TMI 662 vide order dated 23.02.2023] while dealing with a similar issue has held that: As stated that this was a bona fide mistake and the said dividend income has already been taxed outside India. It is claimed that since the due ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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. We find that coordinate bench in 42 Hertz Software India (P) Ltd v. ACIT [2022] 139 taxmann.com 448 (Bangalore Trib.) wherein following its earlier order in the case of Ms. Brinda Rama Krishna v. ITO [2022] 135 taxmann.com 358 (Bang Trib) it was held that one of the requirements of Rule 128 for claiming FTC is that Form 67 is to be submitted by assessee before filing of the returns and that this requirement cannot be treated as 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 pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us by assessee in defence of his argument that FTC cannot be denied merely on the basis of late filing of Form 67. We have perused the decision of Co-ordinate Bench of Bangalore in the case of M/s Brinda Rama Krishna [2022 (2) TMI 752- ITAT BANGALORE] and find that similar issue has been decided in favour of the assessee. We also note that similar issue also has been decided [2022 (9) TMI 926 ITAT JAIPUR] wherein the Co-ordinate Bench has allowed FTC by holding that the filing of form 67 is a procedural formality and could not the basis for denial of FTC to the assessee. Appeal of the assessee allowed. 6.9 The Hon'ble Income Tax Appellate Tribunal, Mumbai Bench in the case of Anuj Bhagwati vs DCIT [2022 (9) TMI 1397 vide order dated 20.09.2022] while dealing with a similar issue has held that: We considering the facts, circumstances provisions of the Act and judicial decisions are of the opinion that there is no amendment on these aspects in the Section 90 of the Act and the Rules cannot override the Act and therefore the filing of Form No 67 is not mandatory but it is directory. Accordingly. We restore the disputed issue to the file of the CIT(A) to adjudicate afresh on me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... through the facts of the present case, we are of the view that there is no dispute that assessee is entitled to claim relief under section 90 of the IT Act but the disallowance was confirmed on the sole ground that the relevant form 67 prescribed under section 128(8) was not filed within the time stipulated under sub rule 9 of Rule 128. It is important to mention here that section 90 of the Act provides that Government of India can enter into Agreement with other countries for granting relief in respect of income on which taxes are paid in country outside India and such income is also taxable in India. In this regard Article 22 of India Finland DTAA provides for credit for foreign taxes. The relevant portion of sub clause (2) of Article 22 is reproduced below :- 2. In India double taxation shall be eliminated as follows :- Where a resident of India derives income which, in accordance with the provisions of this Agreement, may be taxed in Finland, India shall allow as a deduction from the tax on the income of that resident, an amount equal to the tax paid in Finland. Such deduction shall not, however, exceed that portion of the tax as computed before the deduction is given, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e right of claiming the credit of FTC. While reaching to this conclusion, we draw strength from the decision of Hon ble Supreme Court of India in the case of Mangalore Chemicals Fertilizers Ltd. vs. Deputy Commissioner, (1992) Supp (1) Supreme Court Cases 21 wherein the Hon ble Supreme Court has held as under :- The mere fact that it is statutory does not matter one way or the other. There are conditions and conditions. Some may be substantive, mandatory and based on considerations of policy and some others may merely belong to the area of procedure. It will be erroneous to attach equal importance to the nonobservance of all conditions irrespective of the purposes they were intended to serve. Apart from the above decision, I further rely upon the decision of Hon ble Supreme Court in the case of Sambhaji Ors. vs. Gangabai Ors., (2008) 17 SCC 117 (SC) wherein it was held that procedure cannot be a tyrant but only a servant. It is not an obstruction in the implementation of the provisions of the Act, but an aid. According to Hon ble Supreme Court, the procedures are handmaid and not the mistress. It is a lubricant and not a resistance. Thus, a procedural law should n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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