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TMI Blog2023 (9) TMI 1560X X X X Extracts X X X X X X X X Extracts X X X X ..... is fit to be revoked. 3. For that such disallowance by CPC is uncalled for since the same is a debatable issue and cannot be done in an order passed U/s 143(1), as such, the order passed by CPC disallowing the exemption claimed is bad in law. 4. For that the Ld CIT(A) should have considered and followed the various decisions of Tribunal and High Courts in which it has been held that Form 67 though filed belated (however during pendency of the dispute) should be considered for allowing exemption to the assessee. 5. For that other grounds in detail will be argued at the time of hearing." 2. The facts, in brief, are that in this case, the assessee filed his return of income declaring total income of Rs.42,25,040/- and the same was processed u/s 143(1) of the Income-tax Act, 1961 (hereinafter referred to as 'the Act'). The Centralized Processing Centre (CPC) did not allow the claim of foreign tax credit to the assessee. Aggrieved by this, the assessee preferred appeal before the CIT(A) who sustained the addition on the basis that requisite Form No.67 was not filed within the prescribed time. 3. Apropos the grounds of appeal, the ld. Counsel for the assessee vehemently argue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the case may be, to the income which may be taxed in Japan. Further, where such resident is a company by which surtax is payable in India, the deduction in respect of income-tax paid in Japan shall be allowed in the first instance from income-tax payable by the company in India and as to the balance, if any, from surtax payable by it in India. (b) Where a resident of India derives income which, in accordance with the provisions of this Convention, shall be taxable only in Japan, India may include this income in the tax base but shall allow as a deduction from the income-tax that part of the income- tax which is attributable, as the case may be, to the income derived from Japan. 5. That the claim of FTC was made by the assessee in terms of section 90 of the Income Tax Act. It is a settled principle that where is there is special agreement/ DTAA signed by the government, the specific provisions made in such agreement shall prevail over the general provisions contained in the Income Tax Act. The CBDT vide its Circular No. 333 dated 02/04/1982 has held that:- SECTION 90 * AGREEMENT WITH FOREIGN COUNTRIES [CORRESPONDING TO SECTION 40A OF THE 1922 ACT] 627. Specific provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same is beneficial to the tax payer. And as such, since the DTAA does not specifically state to disallow the claim of FTC on mere delay in filing of Form 67, we would submit that the disallowance made by the CPC and further confirmed by the CIT(A) is arbitrary, unjustified and fit to be deleted. 8. That lastly, we would like to contend that this being a debatable issue, the disallowance made by CPC was uncalled as the same cannot be termed as an adjustment in terms of section 143(1). In a similar matter before the Hon'ble ITAT Kolkata Bench in the case of M/s Surendra steel Pvt Ltd Vs CPC in ITA No. 78/Kol/2022 dated 20/05/2022, it was held as below:- We have duly considered rival contentions and perused the material available on record. To our mind there are two issues involved. First being the procedural irregularity and second the legitimate quantification for disallowance. If the adjustment has been made on the basis of first defect i.e., for procedural irregularity then according to the decisions referred by the Id. Counsel for the assessee, this irregularity is not fatal enough to deny the claim of deduction u/s 80IC of the Act. More so, when in response to the first p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bench held that:- Held that 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. There are no conditions prescribed in DTAA that FTC can be disallowed for non compliance of any procedural provision, therefore, the provisions of DTAA override the provisions of the Act. As the assessee has vested right to claim the FTC under the tax treaty and the same cannot be disallowed for mere delay in compliance of a procedural provision. * Sanjeev Agarwal Vs DCIT in ITA No. 71/JP/2023 dated 10/05/2023 - ITAT Jaipur bench held that:- Form 67 filed by the respective assessees, even after the end of the relevant assessment year makes the assessee entitled to claim FTC. Therefore, considering the facts of the present case, the FTC deserves to be allowed to the assessee even if Form 67 was filed by the assessee after the due date of filing the return under section 139(1) of the IT Act, 1961, and in our view not allowing foreign tax credit by AO (CPC) was nothing, but a mistake apparent on record. Therefore, we direct the reve ..... X X X X Extracts X X X X X X X X Extracts X X X X
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