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Facts
The assessee filed appeals against the order of the CIT(A) with a delay of 105 days. The delay occurred because the assessee was awaiting a favorable order from the AO after filing a questionnaire regarding foreign tax credit. The assessee sought condonation of the delay.
Held
The Tribunal condoned the delay, noting that the assessee had actively pursued remedies and was not negligent. The appeals were then adjudicated on their merits, with the Tribunal directing the AO to reconsider the assessee's claim for foreign tax credit, acknowledging that the delay in filing Form 67 is not mandatory and the assessee should not be deprived of the credit.
Key Issues
Whether the assessee can be denied foreign tax credit solely due to a delay in filing Form 67, and whether the delay in filing the appeal should be condoned.
Sections Cited
90/91, 139
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Income Tax Appellate Tribunal, ‘A’ BENCH, BANGALORE
Before: SHRI WASEEM AHMED & SHRI KESHAV DUBEY
PER WASEEM AHMED, ACCOUNTANT MEMBER:
These are the appeals filed by the assessee against the order passed by the Addl/JCIT(A)-5, Delhi both dated 08/08/2024 in and ITBA/APL/S/250/2024-25/ 1067427287(1) for the assessment years 2018-19 and 2019-20 respectively.
At the outset, we note that there was a delay of approximately 105 days in filing both the appeals by the assessee. The assessee has submitted a petition for condonation of delay, stating that after receiving the CIT(A) order, he approached the Assessing Officer (AO) to seek the benefit under section 90/91 of the Act for foreign tax paid in a country outside India. The AO subsequently issued a questionnaire to the assessee. The assessee was hopeful of receiving a favorable order from the AO. However, as no order was passed, the assessee eventually decided to file an appeal against the order of the learned CIT(A) before the ITAT, which was filed on January 20, 2025, with a delay of 105 days.
In view of the above facts, the learned Authorized Representative (AR) submitted that the assessee was diligent in pursuing the income tax proceedings and was not negligent in any manner. However, the delay in filing the appeal occurred due to his expectation of receiving a favorable order from the AO. Therefore, the learned AR contended that there was a valid reason that prevented the assessee from filing the appeal within the due date, and thus, the delay should be condoned.
On the other hand, the learned Departmental Representative (DR) did not raise any objections to the condonation of the delay in filing the appeal.
After hearing both sides and considering the facts on record, we note that the assessee actively pursued the alternate remedy available under the provisions of the Act. However, once he realized that no prompt response was forthcoming from the AO, he chose to file an appeal before the ITAT, albeit with a delay of 105 days. In this case, the assessee cannot be deemed negligent in pursuing the income tax litigation. Accordingly, we are of the view that the delay deserves to be . condoned. Therefore, we condone the delay and proceed to adjudicate the issue raised by the assessee on its merits. an appeal by the assessee for the AY 2019-20
The sole issue raised by the assessee pertains to the learned CIT(A)’s decision not to grant the benefit of foreign tax credit amounting to ₹1,04,088, despite acknowledging that the assessee is entitled to such credit.
The Centralized Processing Center (CPC) denied the foreign tax credit claimed by the assessee for ₹1,04,088 through an intimation dated March 18, 2021, on the grounds that Form 67, required for claiming the credit, was filed belatedly—beyond the due date for filing the income tax return.
On appeal, the learned CIT(A) acknowledged that the benefit of foreign tax credit could not be denied merely because Form 67 was filed belatedly. In support of this, the ld. CIT(A) referred to a series of decisions of higher forums. However, the ld. CIT(A) also noted that the assessee had already submitted an application for condonation of delay in filing Form 67 before the ld. Commissioner of Income Tax (CIT) on April 23, 2021, which was still pending at that time. Consequently, the CIT(A) set aside the issue and referred it to the AO for fresh adjudication, directing the AO to consider the outcome of the pending petition before the ld. Commissioner being higher in ranking.
Being aggrieved by the order of the ld. CIT(A), the assessee has filed the present appeal.
Before us, the learned AR submitted that the assessee cannot be denied the benefit of foreign tax credit solely due to a delay in filing Form 67, which is required to claim the benefit under section 90/91 of the Act. Accordingly, the learned AR requested that the issue be remanded to the AO with instructions to allow the foreign tax credit after necessary verification as per the provisions of law.
On the other hand, the learned DR did not raise any objections if the issue was referred back to the AO for necessary adjudication as per the provisions of law.
We have considered the rival contentions and reviewed the materials available on record. To claim the benefit of foreign tax credit, the assessee is required to file Form 67 along with the return of income within the due date specified under section 139 of the Act. However, it has been consistently held that the filing of Form 67 within the due date is not mandatory. Furthermore, in various cases, the courts have held that once Form 67 is submitted during the assessment or appellate proceedings, the assessee should not be deprived of foreign tax credit under section 90/91 of the Act.
In the present case, the CIT(A) has acknowledged that the assessee is entitled to foreign tax credit under section 90/91 of the Act. However, the ld. CIT-A denied the benefit on the reasoning that the . condonation application for the delay in filing Form 67 is pending before the ld. CIT for adjudication who is higher in ranking. Thus, the ld. CIT(A) set aside the issue to the AO for fresh adjudication after considering the outcome of the condonation petition pending before the ld. CIT.
Since, the Department has already admitted the possibility of granting foreign tax credit subject to verification, and since the learned DR has not opposed the remanding of the matter, we find it appropriate to direct the AO to reconsider the assessee’s claim in the light of judicial pronouncement referred by the ld. CIT-A in his order and without waiting for the outcome of the condonation application pending before the ld. CIT. In view of the above, we direct the AO to adjudicate the issue afresh as per law. Hence, the ground of appeal of the assessee is allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for statistical purposes.
Coming to ITA 109/Bang/2025 for the asst. year 2018-19
The facts of the case on hand are identical to the facts of the case discussed above, therefore, respectfully following the same, we direct the AO to adjudicate the issue afresh as per law. Hence, the ground of appeal of the assessee is allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for statistical purposes.
In the result, both the appeals of the assessee are allowed for statistical purposes.
Order pronounced in court on 12th day of March, 2025