SHARDA MAHESHWARI,MUMBAI vs. CPC/CIRCLE 19(3), MUMBAI

The fact in brief is that the assesse had claimed tax paid in foreign country to the amount of Rs.2,31,213/- which was not granted by the CPC Banglore.

The assessee filed appeal before the ld. CIT(A) stating that she is entitled to foreign tax paid credit u/s 90 of the Act. However, the ld. CIT(A) vide order dated 21.03.2023 dismissed the appeal of the assessee holding that it is mandatory to file statement in form no. 67 on or before the due date specified for furnishing return of income under sub-section (1) of Sec. 139 to claim foreign tax credit. Since the assessee failed to furnish Form No. 67 on or before due date of filing return of income, therefore, the ld. CIT(A) has disallowed the claim of foreign tax credit amounting to Rs.2,31,213/-. 4. During the course of appellate proceedings before us the ld. Counsel at the outset submitted that case of the assessee is covered by the decision of coordinate benches of the ITAT wherein similar issue of identical facts has been decided in favour of the assessee. “(i) Sonakshi Sinha Vs. CIT vide (ii) Nirmala Murli Relwani Vs. ADIT vide ITA No. 2094/Mum/2022 (iii) Anuj Bhagwati Vs. DCIT, Circle 1(1)(1) vide ITA No. 1844 & 1845/Mum/2022.” On the other hand, the ld. D.R supported the order of lower authorities. 5. Heard both the sides and perused the material on record. During the course of assessment the AO has not given credit of Rs.2,31,213/- for tax deducted in foreign country. Thereafter, the assesse filed rectification application u/s 154 of the Act, however, the CPC has denied such credit in the rectification order. The ld. CIT(A) has also rejected the claim of the assessee of foreign tax credit on the ground that assesse has not filed form 67 on or before the due date specified P a g e | 3 Sharda Maheshwari Vs. CPC, Circle 19(3) & 931/Mum/2023 for furnishing return of income under sub-section (1) of Sec. 139 to claim foreign tax credit.

With the assistance ld. Representative we have perused the judicial pronouncements on the similar issue and identical facts of the coordinate benches, Mumbai as referred by the ld. Counsel in this order.

In the case of Sonakshi Sinha Vs. CIT vide ITA No. 1704/Mum/2022 for assessment year 2018-19 it is held that Rule 128 does not prescribe denial of credit of foreign tax credit and Sec. 90 or Sec. 91 also do not prescribe timeline for filing of such declaration on or before due date of filing return of income. Further, by the amendment to the Rule w.e.f 01.04.2022, the assessee can file such Form no. 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 return of income.

We have also perused the decision of ITAT in the case of Nirmala Murli Relwani Vs. ADIT wherein held that mere delay in filing form no. 67 as per Rule 128(9) as they stood during the year under consideration will not preclude the assessee from claiming the benefit of foreign tax credit in respect of tax paid outside India.

On similar proposition we have also perused the decision of ITAT in the case of Anuj Bhagwati Vs. DCIT, Circle 1(1)(1).

We find that issue raised before the Tribunal in this year is similar to the issue adjudicated by the coordinate benches of the ITAT Mumbai in the cases referred supra therefore, following the decision of coordinate bench as referred above we direct the assesse to allow the foreign tax credit. Accordingly, this appeal of the assessee is allowed.