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Income Tax Appellate Tribunal, “B’’ BENCH: BANGALORE
Before: SHRI CHANDRA POOJARI & SMT. BEENA PILLAI
PER CHANDRA POOJARI, ACCOUNTANT MEMBER:
This appeal by the assessee is directed against order of NFAC (First Appellate Authority) dated 30.12.2022 for the assessment year 2021-22. The assessee has raised following grounds:- 1. “Foreign tax credit has been disallowed on the grounds that filing of form 67 within due date is a pre-condition for claiming foreign tax credit. This assumption is not in line with the decision of this Honourable tribunal in the case of Ms. Brinda Ramakrishna, vide its order dated 17-Nov-2021.
Sri Kedar Ajit Keny, Bangalore Page 2 of 5 2. While holding that income as per certificate and form 67 not tallying, no opportunity / notice to show cause was issued.
Documents as prescribed under rule 128(8) is submitted / available as follows: a. Statement of foreign dividend income and foreign tax thereon fits into the requirement of rule 128(8)(i) — Submitted along with form 67. b. Entry for payment of foreign dividend and deduction of foreign tax thereon in the stock plan services report issued by Fidelity Investments, fits into the requirement of rule 128(8)((ii)(b) — Submitted along with form 67. c. Form 1042S (equivalent of TDS certificate under the US Tax laws) issued by Fidelity Investments, which fits into the requirement of rule 128(8)((ii)(b) — Available with me and can be made available for verification .
4. I am covered by sec 5A of the Income Tax Act, 1961, wherein me and my wife (Mrs. Priyanka Kedar Keny [PAN ASRPK 5732 G]) are governed by the system of community of property (known under the Portuguese Civil Code of 1860 as "COMMUNIAO DOS BENS") in force in the State of Goa. Hence, the foreign income being dividend income is split between me and my wife 50 : 50 and consequently credit for foreign tax paid is taken 50 : 50 between both of us. In the disposal of this appeal grant of 50% of the foreign tax credit to my wife (Mrs. Priyanka Kedar Keny [PAN ASRPK 5732 G]) be ordered too.
Facts of the case are that in this case intimation u/s 143(1) of the Income-tax Act,1961 ['the Act' for short] was passed by the AO. The ld. CIT(A) on going through the E- submission filed by assessee has observed that section 295(2)(ha), Rule 128 is framed to provide for the mechanism for grant of foreign tax credit to Indian resident. Rule 128(8) and 128(9) provides as under: (8) Credit of any foreign tax shall be allowed on furnishing the following documents by the assessee, namely:—
(i) a statement of income from the country or specified territory outside India offered for tax for the previous year and of foreign tax deducted or paid on such income in Form No. 67 and verified in the manner specified therein:
Sri Kedar Ajit Keny, Bangalore
Page 3 of 5 (ii) certificate or statement specifying the nature of income and the amount of tax deducted therefrom or paid by the assessee,—
(a) from the tax authority of the country or specified territory outside India: or (b) from the person responsible for deduction of such tax; or (c) signed by the assessee:
2.1 Provided that the statement furnished by the assessee in clause (c) shall be valid if it is accompanied by.—
(A) an acknowledgement of online payment or bank counter foil or challan for payment of tax where the payment has been made by the assessee; (B) proof of deduction where the tax has been deducted.
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) shall be furnished on or before the due date specified for furnishing the return of income under sub- section (1) of section 139, in the manner specified for furnishing such return of income.
2.2 The ld. CIT(A) observed that the assessee did not furnish Form number 67 before the due date as provided under section 139(1) in compliance to rule 128(9) quoted above. Thus, foreign tax credit could not have been allowed as per rule 128(9) of the Act. Further, the ld. CIT(A) observed that certificate or the statement specifying the nature of income as per Rule 128(2)(ii) above for income provided in form 67 is also not furnished tallying the same (as per said certificate/statement) with the figure shown Sri Kedar Ajit Keny, Bangalore Page 4 of 5 in form 67 before the due date u/s. 139(1) of the Act. In view of the above, he concluded that the assessee’s claim of relief for foreign tax credit is held to be rightly denied.
3. After hearing both the parties, we are of the opinion that this issue came for consideration before this Tribunal in the case of Ms. Brinda Ramakrishna Vs. ITO in dated 17.11.2021, wherein 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. 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.
In the result, the appeal is allowed.” 3.1 In view of the above order of the Tribunal, taking a consistent view, we allow the appeal of the assessee.
In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 18th Apr, 2023