CHIRAG BHANDARI,JAIPUR vs. ACIT/DCIT CIR-6,JPR, JAIPUR

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ITA 50/JPR/2026Status: DisposedITAT Jaipur20 August 2026AY 2019-206 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal, relying on Supreme Court judgments, held that procedural requirements should not override substantive rights and directed the AO to provide an opportunity to the assessee to present Form 67 and pass a fresh order.

What were the facts?

The assessee claimed Foreign Tax Credit (FTC) but filed the required Form 67 belatedly, after the original return and intimation under section 143(1). The rectification petition filed by the assessee was rejected by the lower authorities.

What were the issues?

Whether belated filing of Form 67 bars the claim of Foreign Tax Credit, and if procedural lapses can override substantive rights.

Which sections of the Income-tax Act were involved?

Section 90,Section 90A,Section 143(1),Section 154

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘SMC’ BENCH, JAIPUR

Before: Smt. Annapurna Gupta & Shri T.R. Senthil Kumar

For Appellant: Shri Athrav Mundra, Adv

PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:- This appeal is filed by the assessee as against the appellate order dated 27.11.2025 passed by Addl./Jt. Commissioner of Income Tax (Appeals), Kochi, arising out of the rectification order passed u/s. 154 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Year 2019-20. 2. The solidarity issue in this appeal is the denial of Foreign Tax Credit (FTC) of Rs. 77,716/- under sections 90/90A of the Act on the ground relevant Form No. 67 filed by the assessee belatedly. To adjudicate the issue, the following dates and events are relevant;-

Dates Events 31.08.2019 Assessee filed original return of income u/s 139(1) of the Act. 19.03.2021 Intimation ui/s 143(1) of the Act was passed, denying the benefit of FTC since the Form 67 not filed alongwith the return of income. 22.04.2021 Assessee filed Form 67 and also rectification petition. 10.05.2021 Rectification order passed confirming the addition since no mistake apparent on record in 143(1) order. 06.09.2021

The appeal filed by the assessee against 154 order. 27.11.2025 The order passed by Ld. Addl./JCIT(A), Kochi confirming the addition

3.

The grounds of appeal filed by the assessee are as follows:-

1.

The Ld. CIT (A) has erred, both on facts and in law, in confirming the order passed under section 154 of the Income-tax Act, 1961. The order is bad in law as well as on facts and deserves to be quashed.

2.

Disallowance of Foreign Tax Credit (FTC)

The Ld. CIT(A) erred on the facts and in the circumstances of the case, in upholding the disallowance of Foreign Tax Credit of Rs. 77,716/- u/s 90/90A, despite the credit being duly admissible under the Act and the applicable DTAA.

3.

Incorrect Treatment of FTC Claim as Inadmissible

The Ld. CIT(A) erred in treating the Appellant FTC claim as invalid merely on account of the alleged belated filing of Form 67 without appreciating that the FTC was duly claimed in the original return and all schedules (FSI and TR) and supporting evidence were already furnished and verifiable from the return of income.

4.

Procedural Requirement Cannot Override Substantive Right

The Ld. CIT(A) erred in proceeding on the premise that Rule 128/9) imposes a mandatory bar against grant of FTC. Filing of Form 67 is procedural in nature whereas the right to claim FTC under Section 90/90A and the DTAA is substantive and cannot be denied on account of a technical or curable procedural lapse.

5.

Inapplicability of Section 143(1)(a) Adjustments & Mechanical Approach

The Ld. CIT(A) erred in affirming the adjustment made by the CPC under Section 143(1)(a) even though the issue of FTC is not a matter apparent from the record and necessarily requires factual verification and treaty interpretation. Therefore, such an issue lies outside the limited scope of adjustments permissible under Section 143(1)(a).

6.

Non-consideration of Judicial Precedents and Detailed Submissions

The Ld. CIT(A) failed to consider binding judicial principles that procedural lapses cannot extinguish substantive rights and overlooked the Appellant detailed written submissions and evidence already placed on record. The Ld. CIT(A) action is bad in law and facts.

7.

Failure to Apply Beneficial DTAA Provisions u/s 90(2)

The Ld. CIT(A) failed to appreciate that the DTAA, which does not impose any requirement regarding the timing of filing Form 67 overrides the Act by virtue of Section 90(2). Consequently, the denial of FTC on the basis of a procedural requirement under the Rules is contrary to treaty provisions.

8.

Violation of Principles of Natural Justice

The Ld. CIT (A) erred in upholding the adjustment made in the intimation issued u/s 143(1) by the CPC without the issuance of any prior intimation or show cause notice under the proviso to Section 143(1)(a) thereby violating the principles of natural justice and rendering the adjustment void.

9.

Consequential Interest Unjustified

The Ld. CIT(A) erred in law and facts by way of levying of interest u/s 234A, 2348, 234C and 234D is consequential and not sustainable once the FTC claim is allowed.

10.

The Appellant prays for liberty to add amend, modify or withdraw any ground of appeal before or at the time of hearing in the interest of justice.

4.

Heard the rival submissions and perused the materials available on record. It is undisputed fact that the assessee has not filed Form 67 claiming the relief u/s. 90 of the FTC alongwith return of income. After the intimation u/s. 143(1) of the Act made by the CPC, assessee filed Form 67 belatedly and also a rectification petition filed u/s. 154 of the Act. This rectification petition was also disposed vide order dated 10.05.2021 as there is no apparent mistake on record, which was confirmed by Ld. CIT(A) also. Even in our considered view, there is no mistake apparent on record as against intimation passed u/s 143(1) of the Act and the lower authorities are correct in dismissing the claim of the assessee in rectification petition. Alternatively, the assessee ought to have filed the revised return of income alongwith Form 67 to claim FTC. However, the assessee filed a rectification petition which was clearly rejected by the lower authorities.

5.

The Hon’ble Supreme Court in the case of Goetze (India) Ltd. vs CIT (284 ITR 323)(SC) held that the appellate authorities have power to entertain new documents which could not have been entertained by the Assessing Officer, other than by way of filing the revised return. Further the Hon’ble Supreme Court in the case of Sambhaji & Ors. v. Gangabai & Ors., (2008) 17 SCC 117: 2009 Tax Pub(EX) 1999 (SC), (Case PB-39) wherein it has been held that;

“procedure cannot be a tyrant but only a servant. It is not an obstruction in the implementation of the provisions of the Act, but an aid. The procedures 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 is 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.”

6.

Following the above judicial precedents, we hereby direct the JAO to look into Form 67 filed by the assessee belatedly and give one more opportunity of hearing and thereafter pass a fresh order on merits of the case.

7.

In the result, the appeal filed by the assessee is hereby allowed for statistical purposes.

Order pronounced in the open court on 20-08-2026 (ANNAPURNA GUPTA) (T.R. SENTHIL KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated 20/08/2026 Dhananjay K., Sr. PS आदेश क" ""त"ल"प अ"े"षत / Copy of Order Forwarded to:-

1.

Assessee

2.

Revenue

3.

Concerned CIT

4.

CIT (A)

5.

DR, ITAT

6.

Guard file. By order/आदेश से, सहायक पंजीकार आयकर अपील"य अ"धकरण, जयपुर

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