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TMI Blog2024 (6) TMI 268X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessee against the order dated 08.02.2024 passed by the Learned Commissioner of Income Tax (Appeal) (hereinafter referred to as CIT (A) )/ National Faceless Appeal Centre (NFAC), Delhi for the Assessment Year ( AY ) 2021-22. 2. Facts of this case may be summarized that assessee / appellant filed its return of income on dated 13.10.2021 declaring total income of Rs. 28,77,320/-. The return was processed u/s 143(1) of the Income Tax Act, 1961 (hereinafter referred to as the Act ) and intimation was issued on 05.07.2022. The Learned Assessing Officer ( Ld. AO ) assessed the income at Rs. 28,77,320/- but disallowed the relief claimed U/s 90 of the Act by stating that Form 67 was not filed and same was filed by the assessee on 25.01.2022. thereafter, the assessee / appellant filed application for rectification of the above assessment order u/s 154 of the Act on 23.01.2023 but the relief u/s 90 of the Act was again declined by CPC. Aggrieved by the above order, preferred an appeal before the Ld. CIT(A), but said appeal of the assessee was dismissed. Relevant operative para of impugned order as below: In view of the aforementioned detail, the Appellant was required to file return of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hout basis and appreciation of facts and circumstances and it is violative of principle of natural justice, also. He further submitted that CIT(A) ought to have allowed the relief of Rs. 4,27,677/- as claimed by assessee / appellant U/s 90/91 of the Act and deleted alleged demand raised amounting to Rs. 4,74,780/-. 6. Per contra, Learned Departmental Representative ( Ld. DR ) relied on the orders passed by lower authorities. 7. During submissions, following Judgments and orders f Coordinate Benches of ITAT have been referred by Ld. AR, for ease of reference the relevant operative part are held as under: In the case of Duraiswamy Kumaraswamy vs. PCIT, (2024), 460 ITR 615 (Mad.) held as under: 11. The law laid down by the Hon'ble Apex Court in G.M.Knitting Industries (P) Ltd. (supra), which was referred above, would be squarely applicable to the present case. In the present case, the returns were filed without FTC, however the same was filed before passing of the final assessment order. The filing of FTC in terms of the Rule 128 is only directory in nature. The rule is only for the implementation of the provisions of the Act and it will always be directory in nature. This is what ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such condition cannot be read into rule 128(9). 11. It was further submitted that Filing of Form 67 is a procedural/directory requirement and is not a mandatory requirement. It was submitted that violation of procedural norm does not extinguish the substantive right of claiming the credit of FTC. Reliance was placed on the decision of the Hon'ble Supreme Court, in the case of Mangalore Chemicals Fertilizers Ltd. v. Dy. Commissioner AIR 1952 SC 152 wherein it observed 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 v. Gangabai [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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ground on which the revenue authorities rejected the Assessee's application u/s. 154 of the Act was not on the ground that the issue was debatable but on merits. I therefore do not agree with the submission of the learned DR in this regard. Vikas Daga vs. ACIT, in ITA No. 2536 of 2022, DATED 14.06.2023 (DELHI) 8. We have given a thoughtful consideration to the orders of the authorities below. The undisputed fact is that the assessee holds a foreign tax credit certificate for Rs. 1887114/-. In our considered opinion filing of form 67 is a procedural / directory requirement and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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