Loading judgment…
Facts
The appellant company was denied the benefit of foreign tax credit (FTC) by the Ld. CPC and Ld. CIT(A) because Form 67 was filed after the due date of filing the Return of Income.
Held
The Tribunal held that the requirement to file Form 67 within the due date is directory and not mandatory, and thus the appellant is entitled to claim FTC.
Key Issues
Whether the delay in filing Form 67 beyond the due date of filing the Return of Income disentitles the assessee from claiming Foreign Tax Credit.
Sections Cited
90(2), 128(9)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, Mumbai “B” Bench, Mumbai.
Before: Smt. Beena Pillai(JM) & Shri Omkareshwar Chidara(AM)
The only issue to be adjudicated in this case is whether the appellant company can be denied the benefit of the foreign tax credit by Ld. CPC where Form 67 was filed after the due date of filing of Return of Income.
The Ld. CPC and Ld. CIT(A) denied the benefit of Foreign Trade Credit (FTC) because they held that the Rule 128(9) is mandatory in nature and not directory and the Form 67 shall be filed within the due date to claim foreign trade credit.
The Ld. AR of the appellant has argued before ITAT that the issue is covered by several decisions of Kolkata Tribunal and the decision of Hon'ble Madras High Court in the case of Duraiswamy Kumarawamy (W.P No. 5835 of 2022) where it was held that the Rule 128(9) is only directory and not 2 mandatory and the same can be filed at any time before the completion of assessment, and hence FTC should be allowed.
The Ld. DR relied on the order of Ld. CIT(A).
5. Rival submissions are heard. The appellant is entitled to FTC for the following reasons :-
a) The Double Taxation Avoidance Agreement override the Provisions of Income Tax Act as they are more beneficial to the appellant as per section 90(2) of the I.T. Act. b) Hon'ble Madras High Court in the case of Duraiswamy Kumarawamy (supra) held that the Rule regarding filing FTC is only directory and not mandatory and hence it can be filed after the filing of Return of Income to claim FTC and appellant is entitled for credit mentioned in FTC. c) The Mumbai Tribunal in the case of John Arunkumar Diaz Vs. DCIT 19(1), Mumbai also held that filing of Form 67 and the related Rule is only directory and not mandatory.
In view of the above, following the judicial discipline, the appellant is entitled to credit as mentioned in FTC
The appeal of appellant is allowed.
Order pronounced in the open Court on 22/05/2025.