PRASHANTH BABURAO KULKARNI ,BENGALURU vs. INCOME TAX OFFICER, WARD-2, , GULBARGA
Facts
The assessee filed an original return of income claiming no foreign tax credit, but later filed a revised return claiming Rs. 65,972 as foreign tax credit. The CPC processed the revised return, disallowing the credit. The assessee also filed Form 67 belatedly. The CIT(Appeals) disallowed the foreign tax credit due to the belated filing of Form 67.
Held
The Tribunal noted that Rule 128 of the I.T. Rules, which mandates timely filing of Form 67, was inserted effective 01.04.2017. For the assessment year 2015-16, there was no such requirement. Therefore, the CIT(Appeals) erred in disallowing the credit based on this rule.
Key Issues
Whether the foreign tax credit of Rs. 65,972 is allowable to the assessee for AY 2015-16 despite the belated filing of Form 67, considering the then-prevailing rules.
Sections Cited
119(2)(b), 139(1), 90/90A, 192(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “C” BENCH : BANGALORE
Before: SMT. BEENA PILLAI & SHRI LAXMI PRASAD SAHU
Per Laxmi Prasad Sahu, Accountant Member This appeal is filed by the assessee against the order dated 30.12.2023 of the Addl./Jt. CIT(Appeals)-1, Chennai, for the AY 2015-16.
The sole and substantive issue raised by the assessee in this appeal is regarding not grant of foreign tax credit. The brief facts of
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the case are that the assessee filed original return of income on 12.11.2016 in which foreign tax credit of Rs.65,972 was not claimed. Later on, immediately on the same day on 12.11.2016 he filed revised return of income and claimed foreign tax credit. The CPC processed the revised return on 26.02.2018 disallowing foreign tax credit. The assessee also filed return of income u/s 119(2)(b) of the Act. vide acknowledgement No. 616540890080518 claiming foreign tax credit and it was transferred to the jurisdictional AO and still it is pending. The assessee filed Form No. 67 on 11.02.2023. During the appellate proceedings, foreign tax credit was not allowed by the CIT(Appeals) by observing that Form 67 has not been filed within the due date of filing return of income prescribed u/s. 139(1) of the Act as per Rule 128 of the I.T. Rules, 1962. Aggrieved, the assessee is in appeal before the ITAT.
Before us the ld. AR reiterated the submissions made before the CIT(Appeals) and has filed evidence at pages 9 to 28 of PB which is placed on record. The evidence filed before the CIT(A) are very much relevant for deciding the issue. After going through the documents, we note that in Form 16 at Sr. No. 18(a) the employer Infosys Ltd. has deducted TDS of Rs. 2,45,797 u/s 192(1) and at (e) foreign tax credit is shown of Rs.65,972. Form 67 is placed at page 14 to 15 of PB. The assessee has filed income tax return filed in US which is placed at pages 16 to 28 of PB. We note that the CIT(Appeals) has not allowed foreign tax credit for belated filing of Form 67 as per Rule 128(9), but for the impugned AY 2015-16 there was no such requirement. The
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Rule 128 of I.T. Rules was inserted by I.T. (18th Amendment) Rules, 2016 w.e.f. 01.04.2017 and belated filing of Form 67 does not arise in this case. Considering the totality of facts of the case, we remit this issue to the AO to allow foreign tax credit of Rs.65,972 considering section 90/90A of the Act after due verification.
In the result, the appeal is allowed for statistical purposes.
Pronounced in the open court on this 30th day of May, 2024.
Sd/- Sd/- ( BEENA PILLAI ) (LAXMI PRASAD SAHU ) JUDICIAL MEMBER ACCOUNTANT MEMBER
Bangalore, Dated, the 30th May, 2024. /Desai S Murthy / Copy to: 1. Appellant 2. Respondent 3. Pr.CIT 4. CIT(A) 5. DR, ITAT, Bangalore. By order
Assistant Registrar ITAT, Bangalore.
