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Facts
The assessee, an individual, earned Long Term Capital Gain from outside India which was taxed there. She filed her return of income for AY 2019-20, but Form No. 67 was not filed along with it. Consequently, the CPC denied her claim for Foreign Tax Credit (FTC).
Held
The Tribunal held that the filing of Form No. 67 is directory in nature, not mandatory. Following previous judicial pronouncements, the Tribunal decided to set aside the order of the Ld.CIT(A) and directed them to grant FTC after verifying Form No. 67.
Key Issues
Whether the belated filing of Form No. 67 is mandatory or directory for claiming Foreign Tax Credit (FTC) under Section 90 of the Income Tax Act.
Sections Cited
143(1), 90, 139(1)
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Income Tax Appellate Tribunal, ‘A’ BENCH: CHENNAI
Before: SHRI ABY T. VARKEY & SHRI AMITABH SHUKLA
आदेश / O R D E R
PER ABY T. VARKEY, JM:
This is an appeal preferred by the assessee against the order of the Learned Commissioner of Income Tax (Appeals)/Addl./JCIT(A)-1, (hereinafter referred to as “the Ld.CIT(A)”), Lucknow, dated 27.11.2024 for the Assessment Year (hereinafter referred to as "AY”) 2019-20.
The main grievance of the assessee is against the action of the Ld.CIT(A) dismissing the appeal by which action of the CPC u/s.143(1) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act‘) was confirmed by denying Foreign Tax Credit (FTC) u/s.90 of the Act.
The brief facts are that the assessee is an individual, who earned, inter alia, income from outside India as well as Long Term Capital Gain which according to her was taxed in the foreign country, and the assessee had filed her return of income (RoI) u/s.139(1) of the Act i.e. within the time limit specified therein for AY 2019-20, but since Form No.67 was not filed along with the RoI, the CPC vide intimation dated 19.03.2021 passed u/s.143(1) of the Act, didn’t allow the claim of FTC to the tune of Rs.1,33,201/-. According to the Ld.AR, the assessee finding that for not filing Form No.67, the CPC has denied the claim, immediately uploaded and preferred an appeal before the Ld.CIT(A) who was pleased to dismiss the same, on the same ground that the assessee ought to have filed Form No.67 along with RoI.
Aggrieved by the aforesaid action of the Ld.CIT(A), the assessee is before us.
We have heard both the parties and perused the material available on record. We note that the assessee is an individual having salary income, Long Term Capital Gains & income from other sources. During the AY 2019-20, the assessee received Long Term Capital Gains income from outside India which was taxed there and assessee filed belatedly Form No.67 for filing the relief u/s.90 of the Act which was denied by the CPC as well as the Ld.CIT(A), because, the assessee didn’t file Form No.67 along with RoI. In such a scenario, the only question is whether belated filing of Form No.67 is directory or mandatory. And in this regard, we note that the issue is no longer res integra. And note that this Tribunal in the case of ITO vs Smt Chengam Durga (ITA No 1491/Chny/2023 dated 8.04.2023) had an occasion to examine similar claim, and taking note of the decision of the Hon’ble Jurisdictional, Madras High Court in the case of Duraiswamy Kumaraswamy v. PCIT in WP No.5834 of 2022 dated 06.10.2023 held that filing of this Form in terms of Rule 128 was only directory in nature, and further observed that the Rule is only for the implementation of provisions of the Act and it would always be directory in nature. Similar view has been taken by the Tribunal in the case of Satishkumar Ekambaram v. ITO [ dated 04/11/2024].
Respectfully following the decision of the same, we set aside the impugned order of the Ld.CIT(A) and restore it back to the file of the Ld.CIT(A) with a direction to grant FTC to the assessee after verifying Form No.67.