Loading judgment…
Facts
The assessee filed a revised return of income and claimed a higher foreign tax credit (FTC) by furnishing a revised Form 67. The Assessing Officer (AO) and the Commissioner of Income Tax (Appeals) denied the higher FTC, stating that Form 67 was not filed within the prescribed time.
Held
The Tribunal held that the denial of the higher FTC based on the belated filing of Form 67 was incorrect, as the provision for avoiding double taxation is beneficial and should be allowed. Precedents from the jurisdictional High Court and the Tribunal were cited where relief was granted even with belatedly filed Form 67.
Key Issues
Whether the assessee is entitled to claim higher foreign tax credit based on a revised Form 67 filed belatedly, or if the claim is to be denied due to the delay in filing.
Sections Cited
90, 143(2), 142(1)
AI-generated summary — verify with the full judgment below
Detected automatically from the text. The count shows how many other judgments on BharatTax rely on the same authority.
Income Tax Appellate Tribunal, ‘B’ BENCH : BANGALORE
Before: SHRI PRASHANT MAHARISHI, VICE – & SHRI SOUNDARARAJAN K.
ORDER PER SOUNDARARAJAN K., JUDICIAL MEMBER
This is an appeal filed by the assessee challenging the order of the NFAC, Delhi dated 12/03/2025 in respect of the A.Y. 2018-19 and raised the following grounds: “1.0 The appellate order passed by the learned Commissioner of Income Tax (Appeals) dated 12.03.2025, in so far as it is against the appellant is opposed to law, weight of evidence, probabilities, facts and circumstances of the case, may be quashed. 2.0 The learned Commissioner of Income Tax (Appeals) has erred in dismissing the appellant's appeal by not allowing revised claim of relief u/s 90 of the Income Tax Act, 1961.
3.0 The appellant craves leave to add or alter any ground of appeal at any time up to the final decision of the appeal, and to educe additional evidence, if so required while prosecuting the appeal. Prayer: For the above and the other grounds to be urged during the course of proceedings of this appeal, the appellant prays the Hon’ble Tribunal that this appeal be allowed in the interest of justice and equity.”
2. The brief facts of the case are that the assessee is an individual and filed his revised return of income on 28/03/2019 declaring a gross total income of Rs. 1,62,94,120/-.
3. The assessee had included his income from salary and income from other sources. The return filed by the assessee was selected for limited scrutiny to examine the issue of “Foreign financial interest” and notice u/s. 143(2) was issued on 23/09/2019. Subsequently, notice u/s. 142(1) was issued on 24/11/2020. In response to the said notice, the assessee has furnished the details. The AO examined the submissions made by the assessee and accepted the income returned in the revised return but granted the relief u/s 90 as per the original return. The assessee had disputed the relief claimed u/s. 90 of the Act by filing an appeal before the Ld.CIT(A). The assessee originally claimed a relief of Rs. 8,50,562/- in the original return of income and subsequently claimed a relief of Rs. 13,24,710/- and provided the supporting materials. The assessee relying on the judicial precedence had sought for the relief u/s. 90 of the Act based on the revised return filed by him. The Ld.CIT(A) had also not granted the relief and therefore the present appeal has been filed before this Tribunal.
At the time of hearing, the Ld.AR submitted that the assessee had furnished the supporting documents in respect of the foreign tax credit claimed and also field the revised form 67 while filing the revised return and therefore the assessee is entitled for the relief of the foreign tax credit as claimed in the revised form 67. The Ld.AR also filed a paper book enclosing the various documents and also the judicial precedence of the Hon’ble
The Ld.DR relied on the order of the lower authorities and submitted that the AO had considered the original form 67 and granted the necessary relief and not granted the relief as per the revised form 67 on the ground that the said form 67 was not filed in time before the authorities.
We have heard the arguments of both sides and perused the materials available on record.
In the present appeal, the only dispute is with regard to the disallowance of the foreign tax credit of Rs. 13,24,710/- which was claimed by the assessee in the revised form 67 as against the foreign tax credit claimed in the original form 67 at Rs. 8,50,562/-. There is no dispute that the taxes paid in the foreign countries could not be taxed in India and therefore the assessee had claimed the said relief u/s. 90 of the Act. We have also perused the relevant provision 90 which states that in order to avoid the double taxation, the above said provision was made. Similarly, the Rule 128 of the Income Tax Rules which deals with the FTC specifies that the foreign tax credit should be taken into consideration as credit in the year in which the income corresponding to such tax has been offered to tax or assessed to tax in India. This is a beneficial provision to avoid the double taxation. When the fact of the payment of tax in a foreign country has been established, then automatically, the assessee is entitled for the benefit conferred under the provisions. The payment of foreign tax could be set off for the relevant Assessment Year for which the assessee has to file a declaration in form 67 and on that basis, the credit should be granted to the assessee.
In the present case, the assessee had originally filed his return of income in time and also claimed the FTC by filing form 67 and subsequently, he found that some lesser amount was claimed in the form 67, a revised return was field and revised form 67 was also furnished to the authorities. Even though, the AO had considered the revised return, had not granted the foreign tax credit claimed in the revised form 67. The Statute made it clear that the tax paid by the assessee in the foreign country need not again be taxed in India and therefore in order to avoid the double taxation, the provision was made in the Act. If the object of the legislature is clear, the same cannot be denied by citing some irrelevant facts. Moreover, the Hon’ble Jurisdictional High Court as well as the Tribunals had considered the issue and granted the relief even though the form 67 was filed belatedly. Further, the appeal proceedings before the Ld.CIT(A) is also a continuing one of the assessment and therefore even before the Ld.CIT(A), the form 67 can be filed and the benefits can be availed by the assessees. In the present case, the form 67 was furnished to the AO but the same was not considered by the AO and the Ld.CIT(A) had also not accepted the case of the assessee because the form 67 was not filed within the period prescribed under the Statute. The said view of the AO as well as the Ld.CIT(A) is not correct and also not in accordance with the principles laid down by this Tribunal in case of Ms. Brinda RamaKrishna vs. ITO in dated 17/11/2021 and the another order of this Tribunal reported in (2022) 139 taxmann.com 448 in the case of 42 Hertz Software India (P.) Ltd. vs. ACIT.
In view of the settled position of law, we are allowing the appeal filed by the assessee.
In the result, the appeal filed by the assessee is allowed.
Order pronounced in the open court on 05th August, 2025.