ADITYA SOMANI ,HOOGHLY vs. INCOME TAX OFFICER, WARD 34(1), KOLKATA, KOLKATA

Brief facts of the case of the assessee are that the assessee filed its return of income for AY 2021-22, declared double tax salary of INR 4,80,293/-and claimed foreign tax credit of INR 1,13,925/- as the assessee was on assignment to Reckitt Benckiser Malayasia SDN BHD. Form no. 67 was also filed by the assessee along with necessary proof of payment of tax in Malayasia. The assessee received an intimation order u/s 143(1) of the Act wherein the demand of INR 54,170/- was raised against him.

Aggrieved by the said order various rectifications were filed online but vide rectification order u/s 154 of the Act FTC credit was disallowed and erroneous demand of IRN 38,490/- [after adjustment of refund of INR 82,073/-] has been raised by the assessee on account of non-grant of foreign tax credit of INR 1,13,925/- and by not considering the From no. 67.

Aggrieved by the said order the assessee preferred an appeal before the Ld. CIT(A) wherein the appeal of the assessee has been dismissed by holding that the appellant has failed to file Form no. 67 within due date specified for furnishing the return of income under sub-section 1 of Section 139 of the Act.

The Ld. Counsel of the assessee challenges the very impugned order of the AO confirmed by the Ld. CIT(A), that the Ld. ADIT / CPC has erred in not granting the foreign tax credit amounting to Rs. 1,13,925/- as the assessee declared double tax salary of INR 4,80,293/- which was taxable both in Malayasia as well as in India. The Ld. Counsel further submits that the Ld. ADIT has erred in not considering the said claim made through filing of form no. 67 along with back up documents as the assessee was on Malayasia on assignment during the year under consideration and the assessee has offered income tax and claimed the tax benefit under DTAA between Malayasia and India based on the provision of Section 90 of the Act read with Article 24 of DTAA Act. The ld. Counsel further submits that the assessee has also filed a statement in form no. 67 whereby a details of tax benefit under DTAA between Malayasia and India had been mentioned. The Ld. Counsel further submits that CPC has erroneously adjusted the Assessment Year: 2021-22 Aditya Somani. refund of INR 83,070/- claimed in the return of income and wrongly raised a demand of INR 38,490/-. He has also challenged the levying of interest u/s 234B and 234C of the Act. The Ld. A.R has also cited several judicial pronouncements which is as under: i) Rahul Anand vs. ADIT [2024] 169 taxmann.com 281 (Kolkata-Trib.) ii) Debanjan Chatterjee vs. DDIT [2024] 169 taxmann.com 685 (Kolkata-Trib.) iii) Surendra Kumar Goenka vs. ADIT [2024] 169 taxmann.com 306 (Kolkata-Trib.) iv) BGA Electrical & Services Pvt. Ltd. vs. [2024] 169 taxmann.com 272 (Kolkata- Trib) v) Anindya Sarkar vs. ADIT in vi) Kuthoore Nataranjan Venkatasubramanian vs. PCIT [2024] 168 taxmann.com 622 (Madras) vii) Manoj Kumar Srivastava vs. ACIT [2024] 163 taxmann.com 296 (Delhi-Trib).

Upon hearing the submission of the counsel for the respective parties. The following facts have been emerged: i) The assessee was on assignment to Reckitt Benckiser Malayasia SDN BHD ii) During the said order based on his physical presence in India the assessee qualified to be a resident and ordinarily resident of Income as per provision of section 6 of the Act. iii) The assessee filed its return of income and the assessee declared double taxable income of INR 4,80,293/- and claimed foreign tax credit of INR 1,13,925/- under Article 24 of the DTAA Act. v) An intimation order u/s 143(1) of the Act was received. vi) The assessee filed rectification order and various rectifications filed by the assessee but at least there was an erroneous demand has been raised.

We have gone through the order passed by the Ld. CIT(A) and find that the Ld. CIT(A) has dismissed the appeal of the assessee by observing thus:

We have perused the decision of Co-ordinate bench of Kolkata in the case of Anindya Sarka vs. ACIT, CPC in for AY 2020-21 dated 26.07.2024. The operative part is reproduced as under: "7. The Ld. DR supported the order of the Ld. CIT(A). We have gone through the rival contention and also examined the facts. It was submitted before the Ld. CIT(A) by the assessee that the rerun of income was filed on 25.12.2020 and on 26.12.2020 he had submitted the Form No. 67 after receiving the communication from the e-filing team, Income Tax Department on 25.12.2020 that the return of income was not accompanied by Form No. 67 as mandated by Assessment Year: 2020-21 Assessment Year: 2021-22 Aditya Somani. Surendra Kumar Goenka law. Subsequently, since the credit was not allowed, he filed rectification application and Form No. 67 on 03.07.2022 and prior to that rectification requests on 21.05.2022 and on 07.06.2022 were also filed. The credit was not allowed since From No. 67 was filed beyond the date for filing the return of income under Section 139(1) of the Act. In the case of Mahua Bagchi Vs. ACIT (supra) relied upon by the assessee, it is held as under: "5. After hearing rival contentions and perusing the material on record, we find that the assessee served abroad and some foreign tax to the tune of Rs. 17,72,470/- was deducted in United Kingdom under DTAA between India and UK and provision of Section 90(2) of the Act. We also note that Rule 128 sub-Rule 9 provides that Form- 67 should be filed on or before the due date of filing the return of income. However, we note that nowhere it is stated that in case of delayed filing of Form-67 by way of foreign tax credit which is deducted from the assessee in foreign country i.e U.K. would be denied. Accordingly, we are of the considered view that the assessee is entitled to get this foreign tax credit of Rs. 17,72,470/- u/s 90 of the Act. We also note that the claim in respect of foreign tax was allowed in the order passed u/s 143(1) of the dated 28.03.2019 and was withdrawn by the AO by passing order u/s 154 of the Act when the assessee filed form 67 before the AO. In our opinion the credit in respect of foreign tax cannot be denied to the assessee for the technicality of not filing the form 67 within the due date of return u/s 139(1) of the Act. The case of the assessee finds support from the decision of Coordinate Benches in the case of Atanu Mukherjee Vs. ITO in for AY 2020-21 order dated 20.12.2022 and Sobhan Lal Gangopadhyay Vs. ADIT in ITA No. 782/KOL/2022 for AY 2020-21 order dated 09.05.2023.

In the result, the appeal filed by the assessee is allowed."

The relevant extracts of Article 24 of the Treaty on Relief From Double Taxation is reproduced below for ready reference: