ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-2(2)(1), BANGALORE, BANGALORE vs. EVRY INDIA PRIVATE LIMITED, BANGALORE

This is an appeal filed by the Revenue against the order passed by the NFAC, Delhi vide order dated 10/02/2025 in DIN No. ITBA/NFAC/S/250/2024-25/1073077689(1) for the assessment year 2020-21.

The only issue raised by the Revenue is that the learned CIT(A) erred in not appreciating the fact that the assessee has not filed the revised return as required under the law and failed to follow the principles laid down by the Hon’ble Supreme Court in the case of Goetze India Pvt Ltd.

The relevant facts are that the assessee, an Indian company engaged, is in the business of software development and IT Enabled support services. The assessee also has branch office in the foreign country “Norway”. The assessee claimed the income earned from the “Norway” office was included in the income offered to tax in India. However, the at the time of filing of the return of income no taxes were paid in “Norway”, hence credit of foreign tax was not claimed in the return. Subsequent to filing of return, tax was paid in Norway on the income earned from impugned branch. Therefore, the claim for credit of foreign tax payment in accordance with the provision of section 90 of the Act read with India-Norway DTAA was made before the AO during the assessment proceeding. However, the AO has not accepted the claim of the assessee without giving any reason in the assessment order.

Being aggrieved by the order of the learned CIT(A), the Revenue is in appeal before us.

The learned DR before us contended that the learned CIT(A) was not right in allowing the assessee’s claim because the assessee did not follow the prescribed procedure of filing a revised return. He argued that under the law, if a taxpayer wants to make a new claim that was not part of the original return, it must be made through a valid revised return within the time allowed. Since, the assessee failed to do so, the claim could not be entertained at the assessment stage. The learned DR further pointed out that the Hon’ble Supreme Court in the case of Goetze (India) Ltd. vs. CIT reported in 284 ITR 323 has clearly held that the Assessing Officer cannot admit a fresh claim otherwise than by filing a revised return. Therefore, according to him, the learned CIT(A) has erred in not applying this legal position.

On the other hand, the learned AR argued that the assessee is eligible for foreign tax credit as the provision under India-Norway DTAA which the assessee cannot be deprived merely for the reason that same was not claimed through revised return. The learned AR further argued the legal and new claim can be raised at appellate stage. The Hon’ble Supreme Court in Goetze (India) Ltd only prohibit the AO to accept new claim without filing revised return. As such no restriction was placed on the appellate authority.

We have heard the rival contentions of both the parties and perused the materials available on record. Without going into details, we note that the Hon’ble Supreme Court in Goetze (India) Ltd. v. CIT (2006) 284 ITR 323 (SC) clarified that while the AO may not entertain claims made otherwise than through a revised return. However, the appellate authorities such as the learned CIT(A) and ITAT have the jurisdiction to consider additional claims made by the assessee without filing the revised return. The relevant observation of Hon’ble Supreme Court reads as under:

In the result appeal of the Revenue is hereby dismissed.