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Income Tax Appellate Tribunal, “C” BENCH, MUMBAI
This appeal is filed by the assessee for A.Y. 2018-19 against the order passed by the National Faceless Appeal Centre, Delhi [the learned CIT (A)] on 28 September 2021. By the above order, the appeal filed by the assessee against the assessment order dated 18th March, 2021 passed under Section 143(1) of the Income-tax Act, 1961 (the Act) by the learned DCIT, Central Circle-3, Thane, (the learned Assessing Officer) was dismissed. The assessee is aggrieved and has filed this appeal raising following grounds of appeal:-
“1. The NFAC has erred in the facts and circumstances of the case and in law in rejecting the
The NFAC has erred in the facts and circumstances of the case and in law in disregarding documentary evidence filed in support of the FTC claimed under Article 24(2) of the India UK DTAA read with Section 90 of the Act i.e. Form 67 duly filed by the Appellant at the time of filing the original return and the revised return of income (on or before the due date for filing) including the computation of foreign tax credit and proof of taxes deducted in UK.
3. The NFAC has erred in facts and circumstances of the case and in law in disallowing the depreciation amounting to INR 1,492 while processing the tax return.
The NFAC has erred in the facts and circumstances of the case and in law in imposing interest amounting to INR 24,648 under section 234 A of the Act for alleged delay in filing of the Income Tax Return..
The NFAC has erred in the facts and circumstances of the case and in law in imposing interest of INR 8,29,266/- under section 234B and 234C of the Act.
6. The NFAC has erred in law and facts in imposing fee of INR 5,000-under section 234F of the Act.”
The claim of the assessee is that according to Article 24(2) of the Double Taxation Avoidance Agreement, the assessee is eligible for foreign tax credit against the income earned and charged to tax in United Kingdom. The UK income was offered for taxation by assessee in the return of income filed in India. Accordingly, assessee earned salary of ₹68,77,360/- outside India on which foreign tax of ₹18,66,501/- was paid. The tax payable in India was determined at ₹22,90,523/-, against which assessee claimed the above foreign tax of ₹18,66,501/- as a credit [Claimed in Original return of Rs 2313566/-]. 04. Assessee filed his return of income for A.Y. 2018-19 on 23rd August, 2018, whereas the due date of fling of return was 31st August, 2018, showing total income of ₹1,02,13,440/-. Assessee claimed foreign tax credit Rs 2313566/- on foreign salary of RS 6944850/- . Form no 67 was filed on 16/8/2018 electronically.
The revised return of income was processed by Central Processing Centre, under Section 143(3) of the Act by order dated 18 March 2021. It denied the foreign tax credit as per Circular no. 35 of intimation under Section 143(1) of the Act which was provide by the tax payer in the return of income amounting to ₹18,66,501/- but computed under Section 143(1) of the Act at ₹ nil. Consequent interest demand under Section 234A, B and C as well as 234F was also charged for delay in filing of the return of income, which was mentioned in section 143(1) of the Act intimation as on 7 February 2019. In the return of income in schedule BP, assessee claimed depreciation of ₹1,492/- which was also denied. Thus, the original return filed by the assessee on 23 August 2018 was totally ignored. CPC considered revised return filed under Section 139(5) of the Act on 7th February, 2019 was considered as the original return and thus, late filing fee under Section 234F of the Act was also levied. This levy is demonstrated at serial no. 39D of ₹5,000/-.
Assessee is aggrieved with that order preferred the appeal before the National Faceless Appeal Centre, stating the above facts and challenging intimation under Section 143(1) of the Act. The learned CIT (A) (NFAC) held that assessee has filed return of income on 7th February, 2019,
The learned Departmental Representative vehemently supported the order of the learned Assessing Officer and learned CIT (A).
We have carefully considered the rival contention and perused the orders of the lower authorities. Apparently in this case assessee is an individual, a resident in ordinary resident of India in the impugned assessment year as per the provisions of Section 6 (1) of the act. As assessee is a resident in ordinarily resident of India the global income of the assessee was chargeable to tax. Assessee is also a resident of the United Kingdom for calendar year 2017 – 18 as per the domestic tax laws of the United Kingdom. The assessee also earned salary in United Kingdom of ₹ 60, 77,630 on which he paid a tax of ₹ 1,866,501. According to article 24 (2) of the double taxation avoidance agreement, assessee claimed foreign tax credit in its original return of income which was filed before the due date of filing of the return. For the purpose of claiming
Ground number 4 is with respect to the charging of interest u/s 234A of ₹ 24,648 and ground number 5 with respect to the charging of the interest u/s 234B and 234C, ground number six is with respect to imposing a fee of ₹ 5000 u/s 234F of the act. We find that assessee has filed
Ground number 5 is with respect to the charging of interest u/s 234B and 234C of the act, which is consequential in nature, and therefore the learned assessing officer is directed to compute the same in accordance with the law.
Ground number 6 is with respect to charging of fees u/s 234F of the act of ₹ 5000. We find that as the assessee has filed his return of income within the due date prescribed for the impugned assessment year, the above fee is not leviable. Hence, we delete the same.
In the result, appeal filed by the assessee is partly allowed.
Order pronounced in the open court on 22.07.2022.