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TMI Blog2024 (2) TMI 1426X X X X Extracts X X X X X X X X Extracts X X X X ..... 10.2023, which in turn arises from the order passed by the AO passed under Section 154 of the Income tax Act, 1961 (in short 'the Act') dated 23.10.2022. 2. The assessee has taken following grounds in this appeal; 1. The order of the assessing officer is erroneous on the facts and in the law. On the facts and in the circumstances of the case he should be considered the relief u/s 90 of IT Act, 1961 or foreign tax credit (FTC) rule 128(9). 2. The assessing officer is not justified, because he is not allowing the relief u/s-90 of IT Act, 1961 (FTC rule 128(9). Where facts and evidence relating to the TAX DEDUCTION CERTIFICATE (TDS) already submit to the Assessing Officer during the course of rectification request u/s- 154. On the facts and evidence submitted to the AO of the case he ought to have accepted TDS as sufficient evidences have been allowing the relief u/s-90 (FTC rule 128(9). 3. As per the provisions of the Double Taxation Avoidance Agreement of INDIA and BELGIUM country, Stated that if a resident of India derives income which, in accordance with the provisions of the Agreement, may be taxed in Belgium, India SHALL allow as a deduction from the tax on the income of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant submitted that he is an individual and an ordinary resident in India during the year under consideration and worked with EBE NV-BACCO Belgium and offered to tax salary income earned there but did not file Form 67 before filing the income tax return but filed the same later after filing of ITR. 4.3 In view of the above facts and circumstances, it is noted that the only issue with respect to the grounds raised by the appellant is regarding non-filing of Form No. 67 filing of return income and consequential denial of foreign tax credit by invoking the rule 128(9) of the IT Rules. The undersigned extract herein below Rule 128(9) of the IT Rules, 1962 for reference:- 128 (9) The statement in Form No. OTMENT 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. 4.4. From the plain reading of rule 128(9) of the IT Rules, it is clear that the statement in Form No. 67 shall be furnished on or before the due date specified f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Double Taxation Avoidance Agreement (DTAA) with country Spain, the tax payable by assessee in that country is eligible for relief under section 90 of the Income Tax Act, 1961 to the assessee. The said relief was denied by the revenue authorities on the ground that the return for the year under consideration was filed by the assessee on 08.09.2021. However, the form 67 was filed on 28.12.2022 and not along with the return of income filed on 08.09.2021. Since according to revenue the said form 67 was filed after the due date of filing the return of income for the year under consideration, therefore, the assessee was rightly found not eligible for the credit of that amount. 6. We find that the case of assessee is fully covered by the recent decision of the ITAT Jaipur Bench, adjudicated exactly on similar issue in the case of Ritesh Kumar Garg vs. ITO in ITA No. 261/JP/2022 dated 15.09.2022, wherein the claim of Foreign Tax Credit (FTC) was allowed by observing in para 5.1 to 6 as under :- 5.1. After having meticulously gone 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in my view the procedure prescribed in Rule 128 should be interpreted in this context. Therefore, Rule 128 is a procedural provision and not a mandatory provision. The said rule 128(9) provides that Form 67 should be filed on or before the due date of filing the return of income as prescribed under section 139(1) of the Act. However, the said Rule nowhere provides that if the said Form 67 is not filed within the above stated time frame, the relief as sought by the assessee under section 90 of the Act would be denied. In case the intention of the Act or Rule was to deny the FTC, then in that eventuality either the Act or the Rules would have specifically provided that the FTC would be disallowed if the assessee does not file Form 67 within the due date prescribed under section 139(1) of the Act. Thus filing of Form 67, in my view, is a procedural/directory requirement and is not a mandatory requirement. Therefore, violation of procedural norms does not extinguish the substantive 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 Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of 42 Hertz Software India Pvt. Ltd. vs. ACIT in IT Appeal No. 29 of 2021. On the contrary, I respectfully with all humility disagree with the view taken by the Visakhapatnam Bench of the Tribunal in the case of Muralikrishna Vaddi (supra) while relying upon the decision of Hon ble Supreme Court and also of the decisions of Coordinate Benches of the Tribunal in the cases of Brinda Rama Krishna vs. ITO (supra) and 42 Hertz Software India Pvt. Ltd. vs. ACIT (supra). Therefore, considering the totality of facts and legal position as discussed above, I am of the view that assessee is entitled for the credit of FTC under section 90 of the Act. Thus, I, accordingly direct the AO to allow the relief of FTC under section 90 of the Act in the case of assessee. 6. In the result, appeal of the assessee is allowed. We, therefore, following the coordinate bench decision referred herein above, wherein case laws cited was considered and reliance was placed on the judgment of the Hon ble Supreme Court, allow the claim of Foreign Tax Credit (FTC) in favour of the assessee. The AO is accordingly directed to allow relief to the assessee. The order of the ld. CIT (A) is set aside. Since the issu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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