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TMI Blog2023 (8) TMI 1535X X X X Extracts X X X X X X X X Extracts X X X X ..... r 2018-19, whereby the Ld. CIT(A) had dismissed the appeal of the Assessee against the Rectification Order, dated 07/01/2021, passed by Assistant Director of Income Tax, CPC under Section 154 of the Income Tax Act, 1961 (hereinafter referred to as the Act ). 2. The Appellant has raised the following grounds of appeal: 1. Re.: Relief u/s 90 of the Act denied: 1.1 The learned CIT(A) has erred in confirming the Order of Centralized Processing Center ( CPC ), Bengaluru by denying the relief claimed under section 90 of the Act of INR 1,72,390, in the revised return of income. 1.2 The learned CIT(A) has erred in denying the relief on the ground that the Appellant has not filed Form-67 within the due date of filing of return of income prescribed under section 139(1) of the Act without appreciating the fact that the same was furnished alongwith the revised return of income wherein the foreign tax credit was claimed as prescribed under Rule 128 of the Income-tax Rules, 1962. 1.3 The learned CIT(A) has erred in not appreciating that the Appellant had filed original return of income under section 139(1) of the Act well within the due date and the revised return under section 139(5) of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act relief under Section 90 of the Act amounting to INR 1,72,390/- claimed by the Appellant was denied. 6. The Appellant filed first rectification application on 09/04/2020 requesting for grant of credit of taxes paid in Netherlands. The aforesaid application was rejected vide order, dated 25/06/2020, passed under Section 154 of the Act. Thereafter, the Appellant filed second rectification application on 24/07/2020 which was also rejected vide order dated 25/08/2020. The credit for foreign taxes paid in Netherland was not granted. In the interim the Appellant became aware that the tax paid outside India was INR 3,81,585 and not INR 3,75,655/- as reported in Form 67 by the Appellant. Therefore, the Appellant filed revised Form 67 on 27/12/2020 disclosing the figure of tax paid outside India as INR 3,81,585/- while claiming foreign tax credit of INR 1,72,390/- as claimed in the original Form 67. The Appellant filed third rectification application requesting for grant of credit for tax paid in Netherland as per Form 67 filed by the Appellant. Vide rectification order, dated 07/01/2021, passed under Section 154 of the Act, the rectification application was rejected giving the follo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . We have considered the rival submissions and perused the material on record on this issue. We note that while dismissing the appeal of the Appellant herein the CIT(A) has recorded as under: 5.4.5 The decision of the Hon'ble ITAT, Mumbai in the case of Sonakshi Sinha vis CIT is the decision of the jurisdiction ITAT and it has to be usually followed. However, taking strength from the ratio laid down by the Hon'ble Supreme Court in the case of Bharat Hari Singhania v/s CIT(supra) and Muralikrishna Vaddi v/s ACIT (Supra) and also the express provisions of Sec 90 of the I.T. Act providing for making rules for implementation of agreement between the central government and foreign government with respect to credit of foreign tax, the decision of the Hon'ble ITAT in the case of Sonakshi Sinha v/s CIT (supra) is not followed. 5.5 As discussed above, the appellant filed return of income for A.Y.2018-19 on 28.08.2018. The appellant did not include the salary income received in Netherland in the original return of income for A.Y.2018-19. The appellant filed a revised return for AY 2018-19 on 29.03.2019 in which the salary income of Rs.15,57,419/- was included. The appellant filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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) [IT Appeal No. 680/Bang/2022, 6-9-2022]. 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 file such form number 67 on or before the end of the assessment year. Therefore, l ..... X X X X Extracts X X X X X X X X Extracts X X X X
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