MAHENDRA KUMAR PANDYA ,INDORE vs. DCIT/ACIT 1(1), IND, INDORE

PER SIDDHARTHA NAUTIYAL - JM: The present appeal has been filed by the assessee against the order of the Commissioner of Income Tax (Appeals), ADDL/JCIT(A)-6, Mumbai vide order dated 13.02.2025 passed for A.Y. 2019-20. 2. The Assessee has raised the following grounds of appeal: “1. The impugned order passed by the Ld. CIT(A) sustaining the order passed by the Ld. CPC u/s 143(1) is bad in law, without juri iction, it is based on incorrect interpretation of law and without allowing proper and reasonable opportunity of being heard, moreover the facts have also been incorrectly construed. 2.1 That on the facts and in the circumstances of case and in law, the Ld. CIT(A) erred in sustaining the order passed by the Ld. CPC u/s 143(1) without appreciating the fact that the Ld. CPC disallowed the relief of Rs. 21,98,470/- claimed under section 90 on the Income of Rs. 92,06,321/- earned in USA and included in the total income in the return of income filed in India without assigning any reason. 2.2 That on the facts in the circumstances of case and in law, the Ld. CIT(A) erred in sustaining the order passed by the Ld. CPC u/s 14391) by holding that the appellant has not filed form 67 within due date as required u/s 90 rwr 128 without appreciating the fact that assessee filed the form 67on even date of filing of return. Mahendra Kumar Pandya vs. DCIT/ACIT A.Y. 2019-20 2.3 That on the facts and in the circumstances of case and in law, the Ld. CIT(A) erred in sustaining the order passed by the Ld. CPC u/s 143(1) without appreciating the fact that the Ld. CPC failed to appreciate the fact that when overseas Income is included in the total income, the assessee is entitle for relief of overseas taxes paid under section 90 as per applicable double taxation avoidance agreement, if any, or for appropriate tax relief under section 91 of the Act in case there are no such agreements in existence with the respective country.” 3. The brief facts of the case are that the assessee filed his return of income for the relevant assessment year declaring his total income, which included income earned outside India. While processing the return under section 143(1) of the Income-tax Act, 1961 (“the Act”), the Centralised Processing Centre disallowed the claim of foreign tax credit claimed by the assessee under section 90 of the Act on the ground that Form No. 67 was not filed within the due date prescribed under section 139(1) of the Act. According to the Assessing Officer, in view of Rule 128 of the Income-tax Rules, filing of Form No. 67 within the due date was mandatory, and since the same was not complied with, the claim of foreign tax credit was denied. 4. Aggrieved by the intimation/order passed under section 143(1) of the Act, the assessee preferred an appeal before the learned Commissioner of Income-tax (Appeals). Before the CIT(Appeals), the assessee raised specific grounds challenging the denial of foreign tax credit, contending that once the foreign income was included in the total income in India, the assessee was entitled to relief of taxes paid abroad either under section 90 or section 91 of the Act, as the case may be, and that filing of Form No. 67 was only a procedural requirement. The assessee also contended that the denial of foreign tax credit merely on the ground of delay in filing Form No. 67 was unjustified and contrary to the provisions of the Act and the Double Taxation Avoidance Agreement. The learned CIT(Appeals), however, dismissed the appeal of the assessee. The CIT(Appeals) held that as per Mahendra Kumar Pandya vs. DCIT/ACIT A.Y. 2019-20 Rule 128(9) of the Income-tax Rules, Form No. 67 was required to be furnished on or before the due date of filing of return of income under section 139(1) of the Act and since the assessee failed to comply with this requirement, the Centralised Processing Centre was justified in denying the foreign tax credit. Accordingly, all the grounds raised by the assessee were dismissed. 5. The assessee is in appeal before us against the order passed by the learned CIT(Appeals) dismissing the appeal of the assessee. 6. Before us, the learned counsel for the assessee submitted that the assessee had duly included the foreign income in his total income offered to tax in India and had also paid taxes on such income in the foreign country. It was submitted that the filing of Form No. 67 is only a procedural and directory requirement and cannot override the substantive right of the assessee to claim foreign tax credit under section 90 of the Act read with the applicable DTAA. The learned counsel further submitted that identical issue has already been decided by the Indore Bench of the Tribunal in favour of the assessee’s wife, Smt. Asha Rani Pandya, on the same set of facts, wherein the Tribunal, after considering the decisions of the Hon’ble Madras High Court, Bangalore Benches of the Tribunal and other judicial precedents, held that delay in filing Form No. 67 cannot be a ground to deny foreign tax credit. It was therefore submitted that, following the principle of consistency and judicial discipline, the relief be granted to the assessee as well. 7. At this stage, it is relevant to briefly summarise the order passed by the Indore Bench of the Tribunal in the case of the assessee’s wife, Smt. Mahendra Kumar Pandya vs. DCIT/ACIT A.Y. 2019-20 Asha Rani Pandya, in ITA No. 176/Ind/2024 for A.Y. 2019-20. In that case, the assessee had earned income in the USA, included the same in her return of income filed in India and claimed foreign tax credit under section 90 of the Act. The claim was denied by the CPC and confirmed by the CIT(Appeals) solely on the ground that Form No. 67 was not filed within the due date prescribed under section 139(1) of the Act. The Indore Bench of the Tribunal, after examining the legal position, held that the payment of foreign taxes was not in dispute and the only objection was delayed filing of Form No. 67. The Tribunal relied upon the judgment of the Hon’ble Madras 128 is directory in nature and does not provide for denial of foreign tax credit for delay in filing Form No. 67. The Tribunal further held that DTAA provisions override the Rules and that once Form No. 67 was filed and available on record, the foreign tax credit ought to be allowed after due verification. Accordingly, the appeal of the assessee’s wife was allowed for statistical purposes with a direction to grant foreign tax credit. 8. We have heard the rival contentions and perused the material on record. We find that the facts of the present case are identical to the facts considered by the Indore Bench of the Tribunal in the case of the assessee’s wife, Smt. Asha Rani Pandya. The issue involved is also the same, namely, whether foreign tax credit can be denied merely on account of delay in filing Form No. 67. Respectfully following the detailed and reasoned order passed by the Coordinate Bench of this Tribunal in the assessee’s wife’s case, and in the absence of any distinguishing facts brought before us by the Mahendra Kumar Pandya vs. DCIT/ACIT A.Y. 2019-20 Revenue, we hold that the filing of Form No. 67 is a directory requirement and delay in filing the same cannot be a ground to deny the substantive claim of foreign tax credit under section 90 of the Act. 9. Accordingly, we direct the Assessing Officer to allow the claim of foreign tax credit to the assessee after due verification of the quantum, in accordance with law. 10. The appeal of the assessee is thus allowed in favour of the assessee. This Order pronounced on 23 /12/2025 (BHAGIRATH MAL BIYANI) JUDICIAL MEMBER Indore; Dated 23 .12.2025 Tanmay, Sr. PS आदेशकȧ ĤǓतͧलͪपअĒेͪषत/Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant 2. Ĥ×यथȸ / The Respondent. 3. संबंͬधतआयकरआयुÈत/ Concerned CIT(A) 4. आयकरआयुƅ(अपील) / The CIT(A)- 5. ͪवभागीयĤǓतǓनͬध, आयकरअपीलȣयअͬधकरण, अहमदाबाद/ DR, ITAT, Indore 6. गाडŊफाईल/ Guard file. आदेशानुसार/ BY ORDER, (Dy./Asstt.