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Facts
The assessee claimed foreign tax credit of ₹.1,82,847/- in their return for AY 2021-22. The CPC disallowed the claim via intimation under Section 143(1) because Form 67 was filed belatedly and mentioned the wrong assessment year (2020-21 instead of 2021-22). The CIT(A) confirmed this disallowance.
Held
The Tribunal noted that filing Form 67 is directory in nature and referenced a High Court decision holding the same. The Tribunal directed the Assessing Officer to verify the eligibility for foreign tax credit for AY 2021-22 and pass an order accordingly.
Key Issues
Whether the belated filing of Form 67 and mentioning a wrong assessment year justifies the disallowance of foreign tax credit.
Sections Cited
90, 90A, 143(1), 154, 128
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Before: Shri S.S. Viswanethra Ravi&
Year: 2021-22 Nagarajan Shapoorna, Vs. The Income Tax Officer, 2A, VP Rathinasamy Nadar Road, Non Corporate Ward 1(7), Visalakshipuram, Madurai 625 014. Madurai. [PAN:DJWPS7535G] (अपीलाथ�/Appellant) (��थ�/Respondent) अपीलाथ� की ओर से / Appellant by : Shri R. Thulasiram, Advocate ��थ� की ओर से/Respondent by : Ms. R. Anita, Addl. CIT सुनवाई की तारीख/ Date of hearing : 04.06.2025 घोषणा की तारीख /Date of Pronouncement : 30.06.2025 आदेश /O R D E R
PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER:
This appeal filed by the assessee is directed against the order dated 27.01.2025 passed by the Addl/JCIT(A)-1, Gurugram for the assessment year 2021-22.
The assessee raised 7 grounds of appeal amongst which, the only issue emanates for our consideration as to whether the ld. CIT(A) is justified in confirming the disallowance made by the Assessing Officer towards foreign tax credit claimed at ₹.1,82,847/- under section 90/90A of the Income Tax Act, 1961 [“Act” in short] in the facts and circumstances of the case.
3. We note that the assessee filed his return of income for AY 2021-22 declaring total income of ₹.16,55,300/- after claiming foreign tax credit of ₹.1,82,847/-. The CPC passed intimation under section 143(1) of the Act dated 13.10.2022 by disallowing the claim of foreign tax credit. On appeal, the ld. CIT(A) confirmed the disallowance on the ground that the assessee filed Form 67 belatedly and also mentioned wrong assessment year i.e., AY 2020-21 instead of 2021-22.
The ld. AR Shri R. Thulasiram, Advocate submits that mentioning wrong AY in Form 67 as 2020-21 instead of 2021-22 is neither wilful nor wanton, but, a clerical mistake and in order to rectify the mistake of wrongly mentioning the assessment year, the assessee filed rectification petition under section 154 of the Act, which was also rejected. By Relying upon the decision of this Tribunal in the case of ITO v. Smt. Chengam Durga in dated 08.04.2024, the ld. AR prayed for allowing the ground raised by the assessee.
The ld. DR Ms. R. Anita, Addl. CIT relied on the order of the ld. CIT(A).
Heard both the parties and perused the material available on record. In this case, the assessee claimed FTC of ₹.1,82,847/- under section 90/90A of the Act. The return filed by the assessee was processed under section 143(1) of the Act by denying the claim of FTC. The ld. CIT(A) observed that the assessee filed Form 67 belatedly and also mentioned wrong assessment year i.e., AY 2020-21 instead of 2021- 22. The assessee filed rectification application under section 154 of the Act in order to rectify the mistake, which was rejected summarily. We have perused the decision of this Tribunal in the case of ITO v. Smt. Chengam Durga (supra) and note that the Tribunal relied on the decision of the Hon’ble High Court of Madras in the case of Duraiswamy Kumaraswamy (WP No. 5834 of 2022 & ors. Dated 06.10.2023 [460 ITR 615 (Madras), wherein, the Hon’ble High Court has held that filing of aforesaid form in terms of Rule 128 is only directory in nature. The rule is only for the implementation of the provisions of the Act and it will always be directory in nature and decided the issue in favour of the assessee. Under the above facts and circumstances, we direct the Assessing Officer to verify, whether the assessee is eligible for foreign tax credit in AY 2021-22 or not and pass order in accordance with law. Thus, the grounds raised by the assessee are allowed for statistical purposes.
In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on 30th June, 2025 at Chennai.