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TMI Blog2025 (2) TMI 1040X X X X Extracts X X X X X X X X Extracts X X X X ..... ef has been claimed at Denmark, he would decide the issue in the light of the aforesaid decisions and the Circular of CBDT (supra). All the grounds raised in this appeal are allowed for statistical purposes. X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of the assessee. He drew our attention to the relevant contents of the impugned order and also decisions relied by him. 4. On the other hand, the Ld. DR opposed the submissions and supported the orders of the lower authorities. He also contended that the FTC would not be available as the provisions are clear for making such claim in Form No. 67 within the prescribed time. The failure of the assessee for filing the requisite Form No. 67 within the time as mandated u/s 139(1) of the Act, disentitled him for raising such claim after the prescribed time is expired. 5. We have heard the rival contention and perused the materials available on record and gone through the orders of the lower authorities. The only controversy in this case is with regard to FTC, there is no quarrel sofar the issue of offering the income earned outside India for taxation. The only issue is with regard to giving set off of the taxes paid in the other jurisdiction, in the present case is Denmark. We find that the Ld. CIT(A) has considered the submissions of the assessee and decided the issue against him by observing as under: - 4.7. Therefore, the rules and procedures for claiming Foreign Tax Credit wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erred to in clause (ii) of sub-rule (8) shall be furnished on or before the end of the assessment year relevant to the previous year in which the income referred to in sub-rule (1) has been offered to tax or assessed to fax in India and the return for such assessment year has been furnished within the time specified under subsection (1) or sub-section (4) of section 139: Provided that where the return has been furnished under sub-section (8A) of section 139, the statement in Form No. 67 referred to in clause (i) of sub-rule (8) and the certificate or the statement referred to in clause (ii) of sub-rule (8) to the extent it relates to the income included in the updated return, shall be furnished on or before the date on which such return is furnished. [Notification No. 100/2022/F. No. 370142/35/2022-TPL] Explanatory Memorandum: This amendment is effective from the 1(tm) day of April, 2022 so that it applies to all the claims of foreign tax credit furnished during the financial year 2022-2023. it is hereby certified that no person i.e being adversely affected by giving retrospective effect to this rule. Note: The principal rules were published in the Gazette of India, Extraor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eturn of income for the relevant assessment year. 18. Before we advert to the impugned order, it would be apposite to deal with section 119 of the Act which confers power upon the CBDT to issue instructions and directions to other income tax authorities as t may deem fit for proper administration of the Act which are required to be observed and followed by the income tax authorities. Section 119(2)(b) is relevant and the same is extracted hereunder. - "Section 119(2)(a) ... (b) the Board may, if it considers it desirable or expedient so fo do for avoiding genuine hardship in any case or class of cases, by general or special order, authorize any income-tax authority, not being a Commissioner (Appeals) to admit an application or claim for any exemption, deduction, refund or any other relief under this Act after the expiry of the period specified by or under this Act for making such application or claim and deal with the same on merits in accordance with law." 19. From the above, we find that CBDT if it considers it desirable or expedient so to do for avoiding genuine hardship in any case or class of cases by general or special order, authorize any income tax authority, not be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the stipulated time. Thus, by the above Circular No.2 of 2020, CBDT has issued general order under section 119(2)(b) empowering the Commissioners of income Tax to condone delay in filing Form No.10B for the assessment year 2018-19 or for any subsequent assessment years. 23. Commissioner noted that petitioner had filed return of income on 15.08.2018 and revised return of income on 30.03.2019. Form No.10B was filed on 06.11.2019. Form No.10B was required to be filed within the due date of filing of return, in this case 31.10.2018. There was thus delay of more than 365 days in filing Form No.108. Referring to the Circular dated 03.01.2020, Commissioner noted that CBDT has delegated the power to the Commissioner to admit belated applications in filing Form No.10B for the assessment year 2018-19 and onwards for a period of only up to 365 days. Since in this case the delay is more than 365 days, Commissioner expressed inability to condone the delay and hence rejected the application for condonation of delay. 24. We do not find any error or infirmity in the view taken by the CBDT vide Circular No.2 / 2020 or by the Commissioner while passing the impugned order dated 19.02.2020 Fixi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arious case laws on the strength of such precedents, Ld. Counsel for the assessee submits that the Assessing Officer be directed to grant credit of foreign tax as alternatively the matter may be restored to the Assessing Officer for verification. The Tribunal in the case of Ms. Brinda Ramakrishna vs Income Tax Officer, Ward 5(3)(1) in ITA. No.454/Bang/2021 held as under: - "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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the condition of filing form number 67 on or before the due date of filing of the return of income should not be considered as mandatory in nature. 011. The learned authorised representative submitted that honourable Supreme Court was seized of the matter where in the same subsection twin conditions were mentioned, the honourable High Court and lower appellate authorities considered, one of the condition as mandatory and one of the condition as directory. He submitted that here section 90 or 91 does not lay down any condition of filing any form. The requirement of filing of the form is provided under rule 128 of The Income Tax Rules. Therefore, here, the situation is quite different. He submitted that these conditions have been considered by the coordinate bench in case of Brinda Ramakrishna. 012. We have carefully considered the rival contention and perused the orders of the lower authorities. Short question in this appeal is whether assessee is entitled to foreign tax credit even when form number 67 required to be filed according to the provisions of rule 128 (9) of the Income Tax Rules on or before the due date of filing of the return of income, not complied by the assessee, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tended such date which is beyond the due date of filing of the return of income. Further, the fact in the present case is quite distinct then the issue involved in the decision of the honourable Supreme Court in case of Wipro Ltd (supra). Here it is not the case of violation of any of the provisions of the act but of the rule, which does not provide for any consequence, if not complied with. Therefore, respectfully following the decisions of the coordinate bench on this issue, we hold the assessee is eligible for foreign tax credit, as she has filed form number 67 before completion of the assessment, though not in accordance with rule 128 (9) of The Income Tax Rules, which provided that such form shall be filed on or before the due date of filing of the return of income. Accordingly, ground number 2 of the appeal of the assessee is allowed." 15. The ratio laid down in these decisions, in our view, are not only logical but just interpretation of the statutory provisions keeping in view the provision, contained under Section 90 and 91 of the Act. Though, we are conscious of a contrary view taken by the Tribunal in the case of Murlikrishnan vs. ACIT (supra), however, we are inclined ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 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, legislature in its own wisdom has extended such date which is beyond the due date of filing of the return of income. Further, the fact in the present case is quite distinct then the issue involved in the decision of the honourable Supreme Court in case of Wipro Ltd (supra). Here it is not the case of violation of any of the provisions of the act but of the rule, which does not provide for any consequence, if not complied with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 16.05.2019. 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: ........ ........ 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 poin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uble Taxation Avoidance Agreement which have been entered into by the Central Government under section 90 of the Income-tax Act, also provide that the laws in force in either country will continue to govern the assessment and taxation of income in the respective countries except where provisions to the contrary have been made in the agreement. 12. Now coming to the facts of the present case, the set off qua foreign tax credit has been declined on the ground that the assessee failed to furnish the requisite Form No. 67 within the time limit. However, undisputedly, the Double Taxation Avoidance Agreement between India and Denmark provides for relief in respect of payment of taxes in one jurisdiction and paid in other jurisdiction as well. In the light of the above binding precedents and the CBDT Circular, we are of the considered view that the Assessing Officer ought to have verified the correct position whether the assessee had claimed such benefit at source country i.e. Denmark but no exercise has been carried out by the lower authorities. The claim of the assessee is declined purely on the ground that Form No. 67 was filed belatedly. We, therefore, set aside the orders of the low ..... X X X X Extracts X X X X X X X X Extracts X X X X
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