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Facts
The appellant argued that filing Form No. 67 for Foreign Tax Credit (FTC) is directory and not mandatory. The issue was whether the CPC's action of making an addition u/s. 143(1) and a rectification order u/s. 154, denying FTC, was justified without proper intimation and reasons.
Held
The Tribunal held that the issue was covered by decisions of Coordinate Benches. The Tribunal decided to allow the appeal based on these prior rulings, which found the requirement of filing Form No. 67 to be directory.
Key Issues
Whether filing of Form No. 67 for claiming Foreign Tax Credit is mandatory or directory, and if denial of FTC without proper intimation is valid.
Sections Cited
143(1), 154, 90, 90A, 128(9)
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Income Tax Appellate Tribunal, Mumbai “SMC” Bench, Mumbai.
Before: Smt. Kavitha Rajagopal (JM) & Shri Omkareshwar Chidara (AM)
2. The Ld. Addl./JCIT (A) erred in upholding the rectification order passed u/s. 154 of the Act by CPC, thereby denying the Foreign Tax Credit of Rs. 4,78,705/- u/s. 90/90A of the Act..
The Ld. Addl./JCIT (A) has erred in failing to consider the appellant's contention that no reasons were provided to the appellant in the intimation issued u/s. 143(1), nor in the rectification order passed u/s. 154 of the Income Tax Act, 1961. It is incumbent on the revenue authorities to communicate the rationale for such denial of credit for taxes.
During the appeal proceedings before the ITAT, Ld. AR of the appellant has argued that filing of Form No. 67 to claim Foreign Tax Credit (FTC) is only directory in nature and not mandatory, even though the word used in 2 Maria Lourdes Almazan Khan Rule 128(9) is “shall”. For this proposition, the Ld. AR of the appellant has submitted that this issue is squarely covered by the decisions of the Coordinate Benches in Gursharan Kaur Vs. ITO and in Rohan Hattangadi order dated 2.12.2022 etc. and filed copies of orders before the Bench.
3. Ld. DR relied on the orders of CPC and Ld. CIT(A).
After perusing the orders of the lower authorities and copies of the ITAT Orders filed by the Ld. AR of the appellant, it is decided to allow the appeal of the appellant as the issue is covered by the decisions of Coordinate Benches of Mumbai ITAT, as mentioned in para 2 of this order.
The appeal of appellant is allowed.
Order pronounced in the open Court on 17/04/2025.