9911796707
TMI Blog2024 (11) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act and the Rules cannot be contrary to the Act - we direct the AO to allow Foreign Tax Credit after due verification of Form 67 - Appeal by the assessee is allowed for statistical purposes. - Shri George George K., Vice President And Shri Laxmi Prasad Sahu, Accountant Member For the Appellant : Shri Navneeth N. Kini, CA For the Respondent : Ms. Neha Sahay, Jt.CIT(DR)(ITAT), Bengaluru. ORDER PER LAXMI PRASAD SAHU, ACCOUNTANT MEMBER This appeal is filed by the assessee against the ex parte order dated 03.07.2024 of the CIT(Appeals), National Faceless Appeal Centre, Delhi [NFAC], for the AY 2017-18 in not condoning the delay in filing the appeal and dismissing the appeal on the issue of claim of foreign tax credit. 2. Briefly stated the facts of the case are that the assessee field return of income on 05.8.2017 declaring gross total income of Rs. 90,04,118. Intimation was issued on 28.03.2019 u/s. 143(1) wherein foreign tax credit of Rs. 7,27,493 was disallowed against which the assessee filed appeal before the ld. First Appellate Authority (FAA) on 10.04.2024 with a delay of 1809 days. 3. During the appellate proceedings the assessee submitted the reasons for delay in filing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... delay, condone the delay of 212 days and accept my appeal to decide on the matter. 4. The ld. FAA observed that the assessee has not adduced any reasonable cause for filing the appeal with delay of 1809 days and did not condone the delay. He also noted that the assessee did not file return of income u/s. 139 within due date along with Form 67. The assessee filed Form 67 on 04.4.2019 which is much beyond the due date for filing return u/s. 139(1) i.e., 5.8.2017. As per Rule 128(9) it is mandatory to file it is mandatory to file Form 67 to claim foreign tax credit. However the assessee has not given any valid reason for delay in filing Form 67. Accordingly he dismissed the appeal. Aggrieved, the assessee is in appeal before the ITAT. 5. The ld. AR strongly contested the reasons for delay has not been considered by the ld. FAA which is complete injustice to the assessee. After processing of the return, the assessee filed rectification application on 04.04.2019 with CPC for not granting foreign tax credit (FTC) which was rejected by the CPC in Sept. 2023 without giving any reason. Again the assessee filed another rectification petition on 11.09.2023 which was also rejected. The issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . However, rectification rights never got transferred. 7 15 10 April 2024 Appeal filed with FAA 16 03 July 2024 Appeal rejected by FAA 17 08 October 2024 Rectification rights still with CPC and not transferred to AO 8 8. We have gone through the reasons submitted by the assessee before the ld. FAA for delay of 1809 days in filing the appeal and we are of the view that there is reasonable cause for the delay, it is observed that there are sufficient reasons for the delay and following the judgment of the Hon'ble Apex Court in the case of Collector, Land Acquisition Vs. MST. Katiji and Others (1987) 167 ITR 471, delay in filing the appeal before the CIT(Appeals) is condoned. 9. We further note that the assessee is a salaried employee and employed with Tessolve Semiconductor Pvt. Ltd. and Tessolve Inc. during the year and earned income from salary, house property, capital gains, dividend and interest income. The assessee claimed foreign tax credit of Rs. 7,27,493 which was denied by the CPC. The assessee filed return of income on 28.09.2017 and due date was 05.08.2017. Form 67 was also filed belatedly on 04.04.2019. We note from the submission of the assessee, he had sufficient re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e erroneous to attach equal importance to the non-observance of all conditions irrespective of the purposes they were intended to serve. The Tribunal further held that: Further reliance was placed on the decision of the Hon'ble Supreme Court, in the case of Sambhaji and Others v. Gangabai and Others, reported in [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 and not the mistress. It is a lubricant and not a resistance. A procedural law should not ordinarily be construed as mandatory; the procedural law is always subservient to and is in aid to justice. It was submitted that filing of Form 67 as per the provisions of section 90 read with rule 128(9) is a procedural law and should not control the claim of FTC. 12. It was further submitted that even in the context of 80-IA(7), 10A(5) etc, wherein there is specific provision for disallowance of deduction/exemption if audit report is not filed along with the return, various High Courts have taken a view that filing of audit report is directory and not mandatory. Relia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ishing of Form No. 67 before the due date u/s. 139(1) of the Act was fatal to the claim for FTC. 16. I have given a careful consideration to the rival submissions. I agree with the contentions put forth by the learned counsel for the Assessee and hold that (i) rule 128(9) of the Rules does not provide for disallowance of FTC 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. 8. Thus, the fa ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
