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TMI Blog2024 (11) TMI 852X X X X Extracts X X X X X X X X Extracts X X X X ..... o the assessee after due and necessary verification as per the provisions of law. Hence, the ground of appeal filed by the assessee is allowed. - Shri Waseem Ahmed, Accountant Member And Shri Soundararajan K, Judicial Member For the Assessee : Shri Sandeep Huilgol, Advocate For the Revenue : Shri Subramanian S, JCIT (DR) ORDER PER WASEEM AHMED, ACCOUNTANT MEMBER: This is an appeal filed by the assessee against the order passed by the Addl/JCIT(A)-1, Jaipur dated 11/06/2024 in DIN No. ITBA/ALP/S/ 250/2024-25/1065534924(1) for the assessment year 2019-20. 2. The only grievance raised by the assessee is that the ld. CIT(A) erred in not granting the benefit of the tax paid in the foreign country for an amount of Rs. 52,43,835/- on account of delay in filing of Form 67 prescribed under Rule 128 of the Income Tax Rules. 3. The assessee in the present case filed original return of income dated 31/08/2019, which was subsequently revised dated 19/06/2020 for claiming foreign tax credit of Rs. 52,43,835/- which was supported by Form 67 but the same was denied in the intimation generated u/s 143(1) of the Act dated 17/03/2021. On appeal, the ld. CIT(A) also confirmed the intimation processe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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. Therefore, non-furnishing of Form No. 67 before the due date u/s 139(1) of the Act is not fatal to the claim for FTC. The findings of the Coordinate Bench is reproduced below: 2. The Assessee is an individual and during the previous year relevant to AY 2018-19 an ordinary resident in India. The Assessee worked with Ernst Young Australia from 20-11-2017 till 16-5-2019. Since her global income was taxable in India, the Assessee offered to tax salary income earned for services rendered in Australia for the period from December 2017 to March 2018 to tax in India. The Assessee claimed foreign tax credit ( FTC ) for taxes paid in Australia. 3. There is no dispute that the Assessee is entitled to claim FTC. Rule 128 of the Income-tax Rules, 1962 (Rules) provides for giving FTC and reads thus: Foreign Tax Credit. 128. (1) An assessee, being a resident shall be allowed a credit for the amount of any foreign tax paid by him in a country or specified territory outside India, by w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... passed disallowing the claim of FTC. 5. The Assessee filed a rectification application before the AO on 15-6- 2020 25-2-2021 and submitted that credit for FTC as claimed in the return should be given. In the rectification order dated 10-3-2021, the AO upheld the action on the ground that the Assessee has failed to furnish Form 67 on or before the due date of furnishing the return of income as prescribed u/s 139(1) of the Act which is mandatory according to rule 128(9) of the Rules. 6. On appeal by the Assessee, the CIT(A) vide Order dated 3-9-2021 confirmed the Order of AO. The CIT(A) held that the Assessee has not filed Form 67 before the time allowed under section 139(5) of the Act, and therefore Form 67 is non-est in law. The CIT(A) also held that provisions of rule 128 are mandatory in nature. The CIT(A)rejected the contention of the Assessee that filing of Form 67 is a procedural requirement and noncompliance thereof does not disentitle the Assessee of the FTC. 7. Aggrieved by the order of the CIT(A), the Assessee is in appeal before the Tribunal. The learned counsel for the Assessee submitted that disallowance of FTC is bad in law. He submitted that Section 90 of the Act pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vision and not a mandatory provision. 10. It was further submitted that Rule 128(9) provides that Form 67 should be filed on or before the due date of filing the return of income as prescribed u/s 139(1) of the Act. However, the 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 u/s 90 of the Act would be denied. The learned counsel for the Assessee submitted that in case the intention was to deny the FTC, 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. It was submitted that that there are many sections in the Act which specifically deny deduction or exemption or relief in case the return is not filed within prescribed time. Reference was made to section 80AC, 80-IA(7), 10A(5) and 10B(5). Such language is not used in rule 128(9). Therefore, such condition cannot be read into rule 128(9). 11. It was further submitted that Filing of Form 67 is a procedural/directory requirement and is not a mandatory requirement. It was submitted that violation of procedural ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ride the provisions of the Act, to the extent they are beneficial to the assessee. Reliance in this regard is placed on the following cases and circulars: Union of India v. Azadi Bachao Andolan [2003] 263 ITR 706 (SC)CIT v. Eli Lily Co (India) P. Ltd (2009) 178 Taxman 505 (SC)GE India Technology Centre P. Ltd v CIT (2010) 193 Taxman 234 (SC) Engineering Analysis Centre of Excellence P. Ltd v CIT (2021) 125 taxmann.com 42 (SC) (Pg 106-109 of PB 2-Para 25 26) CBDT Circular No 333 dated 2/4/82 137 ITR (St.) It was submitted that when there is no condition prescribed in DTAA that the FTC can be disallowed for non-compliance of any procedural provision. As the provisions of DTAA override the provisions of the Act, the Assessee has vested right to claim the FTC under 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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