SAKETH SAI MYNENI,VISAKHAPATNAM vs. THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE-3(1), VISAKHAPATNAM

The assessee has raised following grounds of appeal: - “1. The order of learned Commissioner of Income Tax (Appeals) is contrary to the facts and also the law applicable to the facts of the case. 2. The learned Commissioner of Income Tax (Appeals) ought to have held that the adjustment made by the CPC by not giving relief of the foreign tax credit of Rs.2,74,288 1

The only grievance of the appellant in this above cited appeal is that the Ld.CIT(A) ought to have held that the adjustment made by the Centralized Processing Centre (in short “CPC”) by not giving relief of the Foreign Tax Credit of Rs.2.74 lakhs claimed by the appellant under section 90A of the Act is outside the scope of intimation under section 143(1) of the Act.

In this case, the CPC/AO has not allowed the Foreign Tax Credit claimed because Form No.67 was filed beyond the due date. Aggrieved by the order of CPC, an appeal was filed before Ld.CIT(A) and the Ld.CIT(A) confirmed the order of CPC stating that the Order of Ld.AO – CPC is correct because the CBDT has issued a Notification dated 18.08.2022 amending sub-Rule (9) of Rule 128 of the Income Tax Rules 1962, w.e.f. 01.04.2022, whereby the statement in Form No. 67 shall be furnished on or before the end of the assessment year. In this case, the appellant filed Form No. 67 on 30.09.2019 whereas the due date is 31.08.2019 and hence relief under section 90 of the Act in respect of Foreign Tax Credit claimed was correctly disallowed by the CPC.

Aggrieved by the orders of the CPC and Ld.CIT(A), an appeal was filed before the ITAT with the grounds of appeal mentioned in the First page of this order.

During the appeal proceedings before the ITAT, the Learned Authorized Representative (hereinafter in short “Ld.AR”) of the appellant stated that the issue is covered in favor of assessee by several orders of Tribunals across the country including the Coordinate Bench of Visakhapatnam. Ld.AR relied on the case of Srikanth Atluri v. ITO in ITA No. 97/VIZ/2026 dated 12.06.2026 for the A.Y. 2020-21.

Heard both sides. The issue is squarely covered by the orders of various Tribunals, as mentioned by Ld.AR of appellant. The issue was decided in favor of appellant by ITAT, Bangalore Bench, ITAT, Hyderabad Bench and ITAT, Jaipur Benches in favor of assessee and held that filing of Form No. 67 is directory in nature and not mandatory. Moreover, the provisions of the Double Tax Avoidance Agreement (“DTAA”) override the provisions of Income Tax Act and hence when the DTAA provides by way of Article 24 for the credit of tax paid on the same income in another country, it cannot be denied to the assessee on the basis of procedural lapses, which is arising out of the delay in filing Form No. 67. In view of the same respectfully following the decision of the Coordinate Bench of ITAT, Visakhapatnam, in the case of Srikanth Atluri v. ITO (supra), the assessee’s appeal is allowed and the CPC/AO is directed to give credit to the tax paid in Foreign jurisdiction.

In the result, appeal filed by the Assessee is allowed.