ROHIN KOUL,USA vs. DCIT, CIRCLE-3(1), GURGAON

The instant appeal filed by the assessee is directed against the order dated 15.02.2023 passed by the Commissioner of Income Tax (Appeals), NFAC, Delhi under Section 250 of the Income Tax Act, 1961 (hereinafter referred as to ‘the Act’) arising out of the assessment order dated 11.01.2021 passed by the CPC, Bengaluru under Section 143(1) of the Act for the Assessment Year (A.Y.) 2018-19.

The case of the assessee before us, is this that during the year under consideration relevant to A.Y. 2018-19, the assessee earned part salary amounting to Rs.54,33,858/- outside India and a sum of Rs.11,85,273/- was deducted by his Employer outside India. The assessee duly offered the aforesaid salary earned outside India along with salary

At the time of hearing of the instant appeal, under this facts and circumstances of the case, it was submitted by the learned AR that the assessee is entitled to claim FTC as he has claimed it under section 90 of the Act r.w. Article 25 India US Treaty (DTAA) in his income tax return filed on 06.07.2018. Section 90 of the Act provides that Govt. of India can enter into Agreement with other countries for granting relief in respect of Income on which taxes are paid in country outside India and such income is also taxable in India. Neither Section 90 nor DTAA provides that FTC shall be disallowed for non-compliance with any procedural requirements. FTC is Assessee’s vested right as per Article 25 of the DTAA read with Section 90 and same cannot be disallowed for Rohin Koul vs. DCIT Asst.Year –2018-19 - 4 - non-compliance of procedural requirement that is prescribed in the Incme Tax Rules. Since the Form 67 has been filed, the same could be verified by the Learned AO and to give relief accordingly. He has relied upon the various judgments passed by the different Courts including the Hon’ble Apex Court in the case of Sambhaji and others vs. Gangabai and others reported in (2008) 17 SCC 117, wherein it has been held that procedural law should not ordinarily be construed as mandatory; the procedural is always subservient to and is in aid to justice. Therefore, filing of Form 67 as per provision of Section 90 r.w. Rule 128(9) of the Act is a procedural law and should not control the claim of FTC. Further that, section 90(2) of Income Tax Act, where the Central Govt. of India entered into a DTAA, the provisions of the Act would apply to the extent they are more beneficial to a taxpayer. Therefore, the provisions of DTAA override the provisions of the Act, to the extent they are beneficial to the assessee. Such contentions of the assessee, however, could not be controverted seriously by the Learned DR.

Thus, having regard to the facts and circumstances of the matter, we dispose of this appeal by setting aside the issue to the file of the Learned AO with a direction upon him to verify the details of Form 67 as claimed to have been filed by the assessee in regard to claim of FTC for an amount of Rs.11,85,273/- for A.Y. 2018-19 and to give relief to the assessee in accordance with law. If necessary, the Learned AO would also give an opportunity of being heard to the assessee and to consider

In the result, assessee’s appeal is, therefore, allowed for statistical purposes.