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Facts
The assessee, an individual, earned dividend income of Rs. 27,08,014/- outside India and claimed foreign tax credit. She filed her return of income on 26/07/2018 and revised it on 27/08/2018, but did not attach Form 67. The CPC denied the foreign tax credit claim.
Held
The Tribunal held that the claim for Foreign Tax Credit (FTC) is not solely controlled by the delay in filing Form 67. Following the precedents of coordinate benches, the Tribunal set aside the order of the CIT(A) and directed the AO to take cognizance of the filed Form 67 and grant FTC.
Key Issues
Whether the delay in filing Form 67 precludes the assessee from claiming Foreign Tax Credit, and if the proceedings before CIT(A) are a continuation of appellate proceedings.
Sections Cited
90, 128(9)
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Income Tax Appellate Tribunal, ‘B’ BENCH : BANGALORE
Before: SHRI WASEEM AHMED & SHRI PRAKASH CHAND YADAV
ORDER PER PRAKASH CHAND YADAV, JUDICIAL MEMBER Present appeal of the assessee is arising from the order of the Ld.CIT(A) dated 03/12/2024 and relates to A.Y. 2018-19.
The brief facts of the case are that the assessee is an individual and derives income from sources viz., salary, house property, capital gain and other sources. The assessee filed her return of income for the year under consideration on 26/07/2018 and later on revised the return of income on 27/08/2018.
3. During the year under consideration, the assessee has earned dividend income to the tune of Rs. 27,08,014/- outside India. In relation to this dividend income, the assessee has claimed credit of foreign tax paid by the assessee, in terms of the provisions of the section 90 of the IT Act. Since assessee could not attach Form 67 with the return of income, the CPC, Bangalore while processing the return of income of the assessee denied the claim of foreign tax credit.
Aggrieved with the order of the CPC, assessee filed an appeal before the Ld.CIT(A) and claimed the credit of foreign tax paid amount. However, the Ld.CIT(A) dismissed the appeal of the assessee observing that the assessee has not filed Form 67 within stipulated time and hence assessee is not entitled for the credit of foreign tax paid.
Aggrieved with the order of the Ld.CIT(A), assessee has come up in appeal before us. The Ld.AR pointed out that the assessee has submitted Form 67 after the lapse of around 3 years he further contended that proceedings before the CIT(A) are continuation of appellate proceedings and hence the assessee is entitled for the credit of foreign tax paid by her.
The Ld. DR contended that the matter may kindly be restored to the file of AO for the verification of Form 67 and relied upon the orders of the Ld.CIT(A).
We have heard the rival submissions and perused the materials available on record. We observe that similar issue has been decided by the Coordinate Bench in the case of NICDC. Vs. DCIT reported in 171 taxmann.com 653. In that case also, the assessee failed to submit the Form 67 along with the return of income. In that case also, there was a delay of 5 years. Deciding the appeal in favour of the assessee, the Coordinate Bench has observed as under: “9. In the present case, the claim of the assessee was declined by the Ld. CIT(A) on the basis that Form No. 67 was filed after a gap of five years. Having regard to the Co-ordinate Benches, we hold that the claim of FTC does not get controlled solely by the delay in filing of Form 67 prescribed under rule 128(9) of the Income Tax Rules. Hence, we set aside the action of the Ld. CIT(A) and direct the Assessing officer to take cognizance of Form No.67 so filed and grant FTC as may be entitled to the assessee in accordance with law. Therefore, following the binding precedents, we here by direct the AO to allow benefit of Foreign Tax Credit subject to such enquiries and verifications as may be considered expedient.”
Respectfully following the verdict of Coordinate Bench, we hereby restore the matter to the file of AO for allowing the credit of foreign tax paid by the assessee with the direction after verification of Form 67.
In the result, the appeal filed by the assessee is allowed for statistical purposes as indicated above.
Order pronounced in the open court on 27th March, 2025.