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TMI Blog2024 (6) TMI 880X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee is allowed and the Assessing Officer is directed to give benefit of foreign tax credit in respect of tax paid outside India by the assessee in accordance with law and the DTAA between India and the Bhutan. Since in the instant case the assessee had filed Form No. 67 along with the return of income filed u/s. 139(4) of the Act, the foreign tax credit was allowable. The AO is directed to allow the credit in accordance with the provisions of section 90 read with DTAA. Appeal of the assessee is allowed. - Shri Sanjay Garg, Judicial Member And Shri Rakesh Mishra, Accountant Member For the Appellant : Shri Siddarth Agarwal, Advocate For the Respondent : Shri Sailen Samadder, Addl. CIT, Sr. DR ORDER PER RAKESH MISHRA, ACCOUNTANT MEMBER: This appeal filed by the assessee is against the order of Ld. Commissioner of Income Tax (Appeals), Addl/JCIT(A)-9, Mumbai (hereinafter referred to as the Ld. CIT(A) passed u/s. 250 of the Income Tax Act, 1961 (hereinafter referred to as the Act ) for AY 2020- 21 vide Appeal No. ITBA/APL/S/250/2023-24/1057291834(1) dated 23.10.2023. 2. Grounds of appeal raised by the assessee are reproduced as under: 1. For that on the facts and in the circumstan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ground of delay. The appellate order and notice of hearing were never served physically. 6. That thereafter on or around 1st week of March, 2024 when the said appellate order was located while searching the old emails. Your petitioner immediately contacted Shri Siddharth Agarwal, Advocate and handed over all the necessary papers for filing an appeal against the said appellate order before the Ld. ITAT, Kolkata. 7. That then Sri Siddharth Agarwal, Advocate prepared the appeal papers and finally the same was filed on 15.03.2024 before the Hon'ble Tribunal with a delay of 85 days. 8. That your petitioner prays that in the facts and circumstances stated above, the delay of 85 days in filing appeal before the Ld. Tribunal be condoned and the appeal be heard on merit of the case. 3.1. The assessee has substantiated the reasons for the delay with the reason that he is a senior citizen aged about 75 years, was suffering from various ailments and was not aware that the appellate order was passed on 23.10.2023. Thereafter, on or around 1st week of March, 2024 when the said appellate order was located while searching the old e-mails, he immediately contacted his Advocate and handed over a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Ajji Basha Vs. CIT (2019) 111 taxmann.com 348 it has been held that a speaking order on merits with reasons and findings is to be passed by the Commissioner (Appeals) on the basis of ground raised in the assessee's appeal. For the reason of being a senior citizen aged about 75 years and suffering from various ailments and apparently not well versed with the legal requirements and procedure for filing the appeal, the delay in filing the appeal ought to have been condoned by the Ld. CIT(A) and the appeal should have been decided on merit. A perusal of Form No. 35 shows that in the statement of facts in the appeal filed before the Ld. CIT(A), the assessee has mentioned that it had filed Form No. 67 vide Acknowledgment No. 306 dated 25.03.2021 and in the ground of appeal it has been mentioned that the Ld. AO/CPC did not take cognizance of the relevant document/evidence/explanation submitted by the assessee in the course of assessment and the AO erred in disallowing relief of Rs. 4,63,266/- claimed u/s. 90/90A of the Act inspite of submission of Form No. 67 in due course of time. 7. As regards ground of condonation of delay, it is mentioned in column 15 that since I had the firs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. Article 22 of DTAA between India and Bhutan provides for credit for foreign taxes. Article 22(2) is relevant in the present context same is extracted below: ARTICLE 22 METHODS FOR ELIMINATION OF DOUBLE TAXATION 1 2. Double taxation shall be eliminated as follows: (i) In India: (a) Where a resident of India derives income which, in accordance with the provisions of this Agreement, may be taxed in Bhutan, India shall allow as a deduction from the tax on the income of that resident, an amount equal to the tax paid in Bhutan. Such deduction shall not, however, exceed that portion of the tax as computed before the deduction is given, which is attributable, as the case may be, to the income which may be taxed in Bhutan. (b) Where in accordance with any provision of the Agreement income derived by a resident of India is exempt from tax in India, India may nevertheless, in calculating the amount of tax on the remaining income of such resident, take into account the exempted income. (ii) In Bhutan: (a) Whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No.29/Bang/2021 iv. Duraiswamy Kumaraswamy vs. PCIT, W.P No.5834 of 2022 13. Hon ble Supreme Court, in the case of Mangalore Chemicals Fertilizers Ltd. v. Deputy Commissioner, (1992 Supp (1) Supreme Court Cases 21) in respect of compliance with the procedural requirements have 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. 14. Further, in the case of Engineering Analysis Centre of Excellence Private Limited vs the Commissioner of Income-tax Anr. Civil Appeal Nos. 8733-8734 of 2018 Ors., Hon ble Supreme Court have held as under that the provisions of DTAA shall override the provisions of the Income-tax Act unless they are more beneficial to the assessee: 165. The conclusions in the aforestated paragraph have no direct relevance to the facts at hand as the effect of section 90(2) of the Income Tax Act, read with explanation 4 thereof ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not extinguish the substantive right of claiming the credit of FTC. We accordingly direct the AO to allow the credit of FTC and hold that rule 128(9) of the Rules 3 does not provide for disallowance FTC in case of delay filing of form 67 is not mandatory but a directory requirement and DTAA overrides the provisions of the Act and the Rules cannot be contrary to the Act. 9. In the result, the appeal filed by the assessee is allowed. 17. Similarly, in the case of Ashish Agrawal Vs. Income Tax Officer, Ward-12(1), Hyderabad ITA No. 337/Hyd/2023 ITAT HYDERABAD BENCHES B , have held vide order dated 26/09/2023 that: 11. As far as the issue of FTC is concerned, learned AR placed reliance on the decision in the case of Ms. Brinda Rama Krishna (supra). In the case of Ms. Brinda Rama Krishna (supra), the Bench considered the issue in the light of the provisions of DTAA, section 295(1) of the Act, the decisions of the Hon'ble Apex Court in the case of Mangalore Chemicals Fertilizers Ltd. Vs. Deputy Commissioner (1992 Supp (1) SCC 21), Sambhaji Vs. Gangabai (2008) 17 SCC 117 and a lot many decisions of the Hon'ble Apex Court including the case in Union of India Vs. Azadi Bachao Andol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the CPC to give effect to the FTC was not accepted and intimation along with notices of demand was received. The assessee also could not succeed with the rectification application filed and approached the CIT u/s 264 of the Act and at the same time filed a writ petition before the Hon ble Madras High Court. It was stated by the respondent-department that rule 128 is mandatory and cannot be considered as directory in nature. The petitioner referred to the judgment of the Hon ble Supreme Court in the case of CIT vs. G.M. Knitting Industries (P) Ltd. Civil Appeal Nos.10782 of 2013 and 4048 of 2014 dated 24.06.2015. The Hon ble High Court allowed the Writ Petition in favour of the assessee by holding as under: 11. The law laid down by the Hon'ble Apex Court in Commissioner of Income-Tax, Maharashtra v. G.M.Knitting Industries (P) Limited in Civil Appeal Nos.10782 of 2013 and 4048 of 2014 dated 24.06.2015, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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