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TMI Blog2024 (11) TMI 23X X X X Extracts X X X X X X X X Extracts X X X X ..... ner of Income Tax (Appeals) ADDL/JCIT (A)-2 Gurugram (herein referred to id. CIT(A)') had erred in upholding the disallowance made by Centralized Processing Centre (`CPC') u/s 143(1) of the Income Tax Act 1961 (`the Act') in respect of foreign tax credit of INR 7,05,587 against the federal taxes paid by the appellant in the USA on the doubly taxed USA sourced income of INR 40,86,983 claimed u/s 90(2) of the Act, read with Article 25 of the India-USA Double Taxation Avoidance Agreement (`DTAA'). 2. The Ld. CIT(A) has failed to interpret Rule 128 liberally and take cognizance of the fact that the filing of Form 67 is a procedural requirement. 3. Any consequential credit, to which the appellant may be entitled under the law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 970. Aggrieved from the above order, the assessee filed appeal before the First Appellate Authority (FAA). 3. The ld. FAA noted that the assessee filed return of income on 22.12.2017 after the extended due date on 05.08.2017. Form 67 was filed on 18.08.2023 which is beyond due date and therefore the ld. FAA did not accept the plea of the assessee and dismissed the appeal. Aggrieved, the assessee is in appeal before the ITAT. 4. The ld. AR reiterated the submissions made before the FAA and submitted that the assessee was not aware about filing of Form 67 and this was the first year of introduction of Form 67 for getting foreign tax credit and later on when the necessary From received, immediately Form 67 was filed on 18.08.2023 and request ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... abad Bench of the Tribunal in the case of Keval Niraj Hutheesing in ITA No.559/Ahd/2022 (order dated 29.03.2023) after considering the judicial pronouncements, had directed the AO to give credit for FTC after due verification of Form 67 filed. In the afore-mentioned case also, Form 67 was not filed before the processing the return u/s. 143(1) of the Act, but was filed subsequently. The relevant finding of the Ahmedabad Bench of the Tribunal in the case of Keval Niraj Hutheesing (supra), reads as follows:- "7. Heard both the parties and perused all the relevant material available on record. It is pertinent to note that the assessee has paid the taxes on the income earned in United Kingdom in that country and assessee is asking for credit o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ures 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. Reliance in this regard was placed on the following cases: ♦ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the tax treaty, the same cannot be disallowed for mere delay in compliance of a procedural provision. 14. The learned DR reiterated the stand of the revenue that rule 128(9) of the Rules, is mandatory and hence the revenue authorities were justified in refusing to give FTC. He also submitted that the issue was debatable and cannot be subject matter of decision in sec.154 proceedings which are restricted in scope to mistakes apparent on the face of the record. 15. In his rejoinder, the learned counsel for the Assessee submitted that Form No. 67 was available before the AO when the intimation u/s. 143(1) of the Act dated 28-5- 2020 was passed. He pointed out that the AO or the CIT(A) did not dismiss the Assessee application for rectifi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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