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Facts
The Revenue appealed an order allowing foreign tax credit to the assessee. The Assessing Officer (AO) denied the credit because Form-67 was not filed along with the return of income, deeming it mandatory. The assessee later filed Form-67 after the due date.
Held
The Tribunal held that delay in filing Form-67 is not a ground for denying foreign tax credit. Citing precedents, it was reasoned that Form-67 filing is a directory requirement, not mandatory, and does not lead to disallowance of credit. Double Taxation Avoidance Agreements (DTAA) provisions override the Act and Rules.
Key Issues
Whether the delay in filing Form-67 justified the denial of foreign tax credit, despite the form being filed later and the Double Taxation Avoidance Agreement provisions.
Sections Cited
Section 139(1), Rule 128(9)
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Income Tax Appellate Tribunal, MUMBAI BENCH “F” MUMBAI
Before: SHRI OM PRAKASH KANT & SHRI ANIKESH BANERJEE
This appeal by the Revenue is directed against order dated 13.09.2023 passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2019-2020, raising following grounds:
"Whether, on the facts and in circumstance of the case and in "Whether, on the facts and in circumstance of the case and in Whether, on the facts and in circumstance of the case and in law, the Ld. CIT (A) is justified in directing the AO to allow the Foreign Tax Ld. CIT (A) is justified in directing the AO to allow the Foreign Tax Ld. CIT (A) is justified in directing the AO to allow the Foreign Tax Credit, without appreciating the fact that the assessee has failed to Credit, without appreciating the fact that the assessee has failed to Credit, without appreciating the fact that the assessee has failed to furnish the Form furnish the Form-67 as per Rule 128 of I.T. Rules and that filing of 67 as per Rule 128 of I.T. Rules and that filing of Form-67 is mandatory in nature and not 67 is mandatory in nature and not directory in nature?
We have heard rival submission of the parties and perused the We have heard rival submission of the parties and perused the We have heard rival submission of the parties and perused the relevant material on record. In the case, the assessee sought for relevant material on record. In the case, the assessee sought for relevant material on record. In the case, the assessee sought for credit of the tax paid in foreign country in respect of global income. credit of the tax paid in foreign country in respect of global income. credit of the tax paid in foreign country in respect of global income. The Assessing Officer denied th The Assessing Officer denied the credit of the foreign tax paid for e credit of the foreign tax paid for the reason that Form No. 67 specified under the Income-tax Rules, the reason that Form No. 67 specified under the Income the reason that Form No. 67 specified under the Income 1962 (in short ‘the Rules’) was not filed by the assessee along with 1962 (in short ‘the Rules’) was not filed by the assessee along with 1962 (in short ‘the Rules’) was not filed by the assessee along with return of income filed on the date specified u/s 139(1) of the Act. return of income filed on the date specified u/s 139(1) of the Act. return of income filed on the date specified u/s 139(1) of the Act. The Ld. CIT(A) however following the decision of the Co owever following the decision of the Co owever following the decision of the Co-ordinate Bench of the Tribunal in the case of Bench of the Tribunal in the case of Subhankar Chakraborty v. Subhankar Chakraborty v. ITO (2023) (ITA No. 1088/Bang/2022) ITO (2023) (ITA No. 1088/Bang/2022) directed the Assessing directed the Assessing Officer to give credit for the foreign tax credit a dit for the foreign tax credit as per Form No. 67 s per Form No. 67 ,which was filed on 01.04.2021 after due verification as per law. filed on 01.04.2021 after due verification as per law. filed on 01.04.2021 after due verification as per law. The relevant finding of the Ld. CIT(A) is reproduced as under: The relevant finding of the Ld. CIT(A) is reproduced as under: The relevant finding of the Ld. CIT(A) is reproduced as under:
“6.6. However, I find that in a similar case, the ITAT Bangalore Bench 6.6. However, I find that in a similar case, the ITAT Bangalore Bench 6.6. However, I find that in a similar case, the ITAT Bangalore Bench in Subhankar Chakraborty vs ITO (2023) (ITA No. 1088/Bang/2022) in Subhankar Chakraborty vs ITO (2023) (ITA No. 1088/Bang/2022) in Subhankar Chakraborty vs ITO (2023) (ITA No. 1088/Bang/2022) has held that delay in filing form 67 cannot be ground for denying s held that delay in filing form 67 cannot be ground for denying s held that delay in filing form 67 cannot be ground for denying foreign tax credit. This decision itself is based on Vinodkumar foreign tax credit. This decision itself is based on Vinodkumar foreign tax credit. This decision itself is based on Vinodkumar Lakshmipathi Vs. CIT(A), NFAC, Delhi in Lakshmipathi Vs. CIT(A), NFAC, Delhi in ITA No. 680/Bang/2022 Lakshmipathi Vs. CIT(A), NFAC, Delhi in ITA No. 680/Bang/2022 reported in [2022] 145 com 235 (Bangalore Trib.). In this case, t reported in [2022] 145 com 235 (Bangalore Trib.). In this case, t reported in [2022] 145 com 235 (Bangalore Trib.). In this case, the ITAT concluded as under: ITAT concluded as under: "16. I have given a careful consideration to the rival "16. I have given a careful consideration to the rival "16. I have given a careful consideration to the rival submissions. I agree with the contentions put forth by the submissions. I agree with the contentions put forth by the submissions. I agree with the contentions put forth by the learned counsel for the Assessee and hold that (i) rule 128(9) of learned counsel for the Assessee and hold that (i) rule 128(9) of learned counsel for the Assessee and hold that (i) rule 128(9) of the Rules does not provide for disallowance of F the Rules does not provide for disallowance of FTC in case of TC in case of delay in filing Form No. 67; (i) filing of Form No. 67 is not delay in filing Form No. 67; (i) filing of Form No. 67 is not delay in filing Form No. 67; (i) filing of Form No. 67 is not mandatory but a directory requirement and ili) DTA overrides mandatory but a directory requirement and ili) DTA overrides mandatory but a directory requirement and ili) DTA overrides the provisions of the Act and the Rules cannot be contrary to the provisions of the Act and the Rules cannot be contrary to the provisions of the Act and the Rules cannot be contrary to the Act. I am of the view that the issue was not debatabl the Act. I am of the view that the issue was not debatabl the Act. I am of the view that the issue was not debatable and there was only one view possible on the issue which is the there was only one view possible on the issue which is the there was only one view possible on the issue which is the view set out above. I am also of the view that the issue in the view set out above. I am also of the view that the issue in the view set out above. I am also of the view that the issue in the proceedings u/s. 154 of the Act, even if it involves long drawn proceedings u/s. 154 of the Act, even if it involves long drawn proceedings u/s. 154 of the Act, even if it involves long drawn process of reasoning, the answer to the question can be only process of reasoning, the answer to the question can be only process of reasoning, the answer to the question can be only one and in such circumstances, proceedings u/s. 154 of the e and in such circumstances, proceedings u/s. 154 of the e and in such circumstances, proceedings u/s. 154 of the Act, can be resorted to. Even otherwise the ground on which Act, can be resorted to. Even otherwise the ground on which Act, can be resorted to. Even otherwise the ground on which the revenue authorities rejected the Assessee's application the revenue authorities rejected the Assessee's application the revenue authorities rejected the Assessee's application u/s. 154 of the Act was not on the ground that the issue was u/s. 154 of the Act was not on the ground that the issue was u/s. 154 of the Act was not on the ground that the issue was debatable but on m debatable but on merits. I therefore do not agree with the erits. I therefore do not agree with the submission of the learned DR in this regard." submission of the learned DR in this regard." 6.7. Respectfully following the judicial precedents cited above, I direct 6.7. Respectfully following the judicial precedents cited above, I direct 6.7. Respectfully following the judicial precedents cited above, I direct the AO to give credit to foreign tax credit as per Form 67 filed on the AO to give credit to foreign tax credit as per Form 67 filed on the AO to give credit to foreign tax credit as per Form 67 filed on 01.04.2021 after due verifi 01.04.2021 after due verification as per law.” 2.1 In our opinion, In our opinion, the Ld. CIT(A) has followed the binding the Ld. CIT(A) has followed the binding precedent on the issue in dispute and no on the issue in dispute and no adverse decision either of adverse decision either of the Co-ordinate Bench or of Jurisdictional High Court has been ordinate Bench or of Jurisdictional High Court has been ordinate Bench or of Jurisdictional High Court has been brought to our knowledge brought to our knowledge by the Ld. Departmental Representative tal Representative (DR) , therefore, we do not find any infirmity in the order of the Ld. therefore, we do not find any infirmity in the order of the Ld. therefore, we do not find any infirmity in the order of the Ld. CIT(A) on the issue in dispute. CIT(A) on the issue in dispute.
In the result, the appeal of the Revenue is dismissed. In the result, the appeal of the Revenue is dismissed. In the result, the appeal of the Revenue is dismissed.
Order pronounced in the open Court on nounced in the open Court on 30/04/2024.