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TMI Blog2024 (2) TMI 860X X X X Extracts X X X X X X X X Extracts X X X X ..... ORDER Per George George K, Vice President: This appeal at the instance of the Revenue is directed against CIT(A) s order dated 30.06.2023, passed under section 250 of the Income Tax Act, 1961 (hereinafter called the Act ). The relevant Assessment Year is 2019-20. 2. There is a delay of 36 days in filing this appeal. The Revenue has filed a petition for condonation of delay stating therein the reasons for belated filing of this appeal. We have perused the reasons stated in the condonation petition for late filing of this appeal. We are of the view that there is reasonable cause for delay in filing this appeal and no latches can be attributed to the Revenue. Hence the delay of 36 days in filing this appeal is condoned and we proceed to dispose off the same on merits. 3. The grounds raised read as follows: 1. On the facts and circumstances of the case, the learned CIT(A) erred in allowing the foreign credit as disallowed by the CPC while processing of return u/s 143(1) of the IT Act, 1961. 2. On the facts and circumstances of the case, the learned CIT(A) erred in stating that filing of Form No 67 is not mandatory but it is directory and thereby, allowed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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). Consequently, the Ld. Asstt. Director of Income Tax, Central Processing Centre, Bengaluru, while processing the return of income vide intimation dated 23.03.2021 issued under section 143(1) of the Act denied the foreign tax credit of Rs. 62,28,734/, claimed by the assessee under section 90 of the Act. This matter on similar facts wherein the taxoayer filed Form No. 67, after the due date for filing the return of income has been already been decided by my higher authority in favour of the assessee. 9. Hon ble Income tax Appellate Tribunal, Mumbai in Sonakshi Sinha vs CIT, in ITA No. 1704/Mum.i 2022, vide order dated 08/09/2022 has observed as under: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re 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 wisdom has extended such date which is beyond the due date of filing of the return of income. Further, the fact in the present case is quite distinct then the issue involved in the decision of honourable Supreme Court in case of Wipro Ltd (supra). Here it is not the case of violation of any of the provisions of the act but of the rule. which does not provide for any consequence, if not complied with. Therefore, respectfully following the decisions of the coordinate bench on this issue, we hold the assessee is eligible for foreign tax credit. as she has filed form number 67 before completion of the assessment, though not in accordance with rule 128 (9) of The Income Tax Rules, which provided that such form shall be filed on or, before the due date of filing of the return of income. Accordingly, groun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0/Bang/2022 (order dated 06.09.2022). 10. We have heard the rival submissions and perused the material on record. In the instant case, assessee had claimed FTC in the return of income which was filed within the due date specified under section 139(1) of the Act. On realizing the mistake that Form 67 was not filed along with the return of income, the same was filed on 22.06.2022. The assessee, after filing Form 67 made several attempts to get the rectification done through CPC and since his efforts did not fructify, he had to resort to filing the appeal an appeal before the FAA. The Bangalore Bench of the Tribunal, in the case of Vinodkumar Lakshmipathi Vs. CIT(A), NFAC, Delhi (supra), had held that filing of Form 67 is only procedural in nature and the delay in filing the same is not fatal to claim FTC. The relevant finding of the Tribunal reads as follows: 4. We have heard the rival submissions and perused the materials available on record. The claim of the assessee has been denied while processing return of the assessee u/s 143(1) of the Income-tax Act,1961 ['the Act' for short] dated 11.6.2020 on the reason that assessee has not filed the Form No.67 along with re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hose years in the same proportion in which the income is offered to tax or assessed to tax in India. One of the requirements of Rule 128 for claiming FTC is provided by Rule 128 (8) (9) of the Rules and the same reads thus: (8) Credit of any foreign tax shall be allowed on furnishing the following documents by the assessee, namely: (i) a statement of income from the country or specified territory outside India offered for tax for the previous year and of foreign tax deducted or paid on such income in Form No.67 and verified in the manner specified therein; (ii) certificate or statement specifying the nature of income and the amount of tax deducted therefrom or paid by the assessee, (a) from the tax authority of the country or the specified territory outside India; or (b) from the person responsible for deduction of such tax; or (c) signed by the assessee: Provided that the statement furnished by the assessee in clause (c) shall be valid if it is accompanied by, (A) an acknowledgement of online payment or bank counter foil or challan for payment of tax where the payment has been made by the assessee; (B) proof of deduction where the tax has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e present context. Same is extracted below: 4. In the case of India, double taxation shall be avoided as follows: (a) the amount of Australian tax paid under the laws of Australia and in accordance with the provisions of this Agreement, whether directly or by deduction, by a resident of India in respect of income from sources within Australia which has been subjected to tax both in India and Australia shall be allowed as a credit against the Indian tax payable in respect of such income but in an amount not exceeding that proportion of Indian tax which such income bears to the entire income chargeable to Indian tax; It was submitted by him that section 90 of the Act read with Article 24(4)(a) provides that Australian tax paid shall be allowed as a credit against the Indian tax but limited to proportion of Indian tax. Neither section 90 nor DTAA provides that FTC shall be disallowed for noncompliance with any procedural requirements. FTC is Assessee s vested right as per Article 24(4)(a) of the DTAA read with Section 90 and same cannot be disallowed for non-compliance of procedural requirement that is prescribed in the Rules. 8. It was further submitted by him that Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that: 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 non-observance of all conditions irrespective of the purposes they were intended to serve. Further reliance was placed on the decision of the Hon ble Supreme Court, in the case of Sambhaji and Others v. Gangabai and Others, reported in (2008) 17 SCC 117, wherein it has been 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. The procedures are handmaid and not the mistress. It is a lubricant and not a resistance. A procedural law should not ordinarily be construed as mandatory; the procedural law is always subservient to and is in aid to justice. It was submitted that filing of Form 67 as per the provisions of section 90 read with Rule 128(9) is a procedural law and should not control the claim of FTC. 12. It was further submitted that even in the context of 80IA(7), 10A(5) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was passed. He pointed out that the AO or the CIT(A) did not dismiss the Assessee application for rectification u/s.154 of the Act on the ground that the issue was debatable but rather the decision was given that the relevant rule was mandatory and hence non-furnishing of Form No.67 before the due date u/s.139(1) of the Act was fatal to the claim for FTC. 16. I have given a careful consideration to the rival submissions. I agree with the contentions put forth by the learned counsel for the Assessee and hold that (i) Rule 128(9) of the Rules does not provide for disallowance of FTC in case of delay in filing Form No.67; (ii) filing of Form No.67 is not mandatory but a directory requirement and (iii) DTAA overrides the provisions of the Act and the Rules cannot be contrary to the Act. I am of the view that the issue was not debatable and there was only one view possible on the issue which is the view set out above. I am also of the view that the issue in the proceedings u/s.154 of the Act, even if it involves long drawn process of reasoning, the answer to the question can be only one and in such circumstances, proceedings u/s.154 of the Act, can be resorted to. Even otherwise the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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