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Facts
The assessee claimed foreign tax relief under Section 90A, which was denied in the intimation and a subsequent rectification order. The CIT(A) gave conflicting decisions on this denial.
Held
The Tribunal held that the assessee was entitled to foreign tax credit as Form 67 was filed before the end of the assessment year and a prior CIT(A) order allowing the credit was not contested. The impugned order denying the credit was quashed.
Key Issues
Whether the denial of foreign tax credit is justified when Form 67 was filed before the due date and a prior appellate order had allowed the credit.
Sections Cited
90A, 143(1), 154, 90, 128
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Income Tax Appellate Tribunal, “SMC” BENCH : BANGALORE
Before: SHRI PRASHANT MAHARISHI
This appeal is filed by Vijayaraghavan Sundararaman (the assessee/appellant) for the assessment year 2022-23 against the appellate order passed by the Addl/JCIT(Appeals)-5, Mumbai [ld. CIT(A)] dated 22.7.2025 wherein the appeal filed by the assessee against the rectification order passed u/s. 154 of the Income-tax Act, 1961 [the Act] dated 27.3.2023 by the CPC was dismissed.
The brief facts of the case show that assessee is an individual, filed his return of income on 29.12.2022, though the extended due date was 31.7.2022 claiming tax relief u/s. 90A of Rs.54,093, which was denied as per intimation u/s. 143(1) dated 24.2.2023. Against this intimation, assessee filed an application for rectification u/s. 154 of the Act on 24.2.2023. This rectification application was disposed of by CPC on 27.3.2023 wherein also the relief claimed by the assessee was not granted. Against this order, assessee preferred appeal before the ld. CIT(A) against the original intimation u/s. 143(1) of the Act as well as against the rectification order u/s. 154 of the Act.
The ld. CIT(A) passed an appellate order against the intimation passed u/s. 143(1) of the Act on 17.12.2024 wherein he allowed the appeal of the assessee holding that assessee is entitled to relief u/s. 90 of the Act in view of the provisions of DTAA and therefore AO was directed to recompute the income of the appellant after allowing the claim u/s. 90 of the tax relief of Rs.54,093.
Similarly appellate order against appeal of the assessee filed under the rectification order was also passed by the ld. CIT(A) on 22.7.2025 wherein he dismissed the appeal of the assessee. The ld. CIT(A) held that denial of foreign tax credit claim by the assessee in the intimation u/s. 143(1) is proper and therefore he dismissed the appeal of the assessee.
Therefore in a nutshell, the situation is that the ld. CIT(A) by one order has allowed the appeal of the assessee against the intimation passed u/s. 143(1) of the Act directing the AO to allow the foreign tax credit to the assessee, but when assessee filed another appeal against the rectification order in intimation u/s. 143(1), the appellate order was passed by the ld. CIT(A) holding that assessee is not entitled to foreign tax credit. The denial of foreign tax credit in the appellate order was for the reason that assessee did not file Form 67 within the due date as required u/s. 90 r.w. Rule 128 of the I.T. Rules. Therefore, now assessee is in appeal before us against the appellate order dated 22.7.2025 wherein foreign tax credit is denied.
The ld. AR furnished a paperbook containing 67 pages wherein he relied upon the Notification dated 18.8.2022 wherein Rule 128 is amended and sub-Rule (9) is substituted. According to the new sub- rule, it was provided that Form 67 shall be furnished on or before the end of the relevant assessment year. The ld. AR further submitted the proof of tax paid in UK. Therefore it was submitted that assessee should be granted the tax credit u/s. 90 of the Act.
The ld. DR vehemently supported the order of the ld. CIT(A) stating that if Form 67 is not filed in time, the credit of foreign tax is rightly denied.
We have carefully considered the rival contentions and perused the orders of the ld. lower authorities. We find that one CIT(A) is saying that assessee should be granted tax credit and another CIT(A) is saying that assessee should not be granted tax credit. The bottom line is that till date the assessee has not been granted the tax credit. The fact clearly shows that assessee has furnished Form 67 claiming foreign tax credit before the revised return and therefore before the end of assessment year. Accordingly assessee is entitled to the foreign tax credit in terms of Rules 128 of the I.T. Rules. In view of this, we quash the impugned order passed by the ld. CIT(A) dismissing the appeal filed by the assessee against the rectification order passed by the CPC u/s. 154 of the Act denying the foreign tax credit. This is also because of the reason that when the ld. CIT(A) has already allowed the foreign tax credit to the assessee in appeal filed by the assessee against the intimation passed u/s. 143(1) of the Act, the second ld. CIT(A) could not have withdrawn the claim already allowed in favour of the assessee. Further the appellate order passed by the ld CIT (A) against I order u/s 143(1) of the act is not contested by the Assessee or the ld. AO. Thus, the issues of granting FTC to the assessee of Rs. 54,093/- is also final. Even otherwise one CIT (A) in subsequent order could not have upset the earlier order of the ld CIT (A) on the same issues for the same assessment year in the case of same assessee. In view of this, the appeal of the assessee is allowed and the ld. AO is directed to grant the foreign tax credit of Rs.54,093 to the assessee within 30 days of receipt of this order.
In the result, the appeal of the assessee is allowed. Pronounced in the open court on this 21st day of October, 2025.