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Facts
The Department filed appeals against the orders allowing foreign tax credit (FTC) to the assessee. The assessee had claimed FTC for tax paid in the USA on income earned there. The department contended that Form 67 for claiming FTC was not filed within the due date as per Rule 128(9) of the Income Tax Rules, making the claim invalid.
Held
The Tribunal held that the claim for FTC is not solely controlled by the delay in filing Form 67. The Tribunal referred to coordinate bench decisions which held that the claim of FTC cannot be denied merely on account of delay in filing Form 67. The Assessing Officer was directed to take cognizance of the filed Form 67 and grant FTC as admissible.
Key Issues
Whether the claim for foreign tax credit can be disallowed solely due to the delay in filing Form 67.
Sections Cited
90/91, 139(4), 143(1), 234A, 234B, 234C
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Income Tax Appellate Tribunal, JAIPUR BENCHES,”A” JAIPUR
Before: SHRI SANDEEP GOSAIN, JM & Dr. MITHA LAL MEENA, AM vk;dj vihy la-@ITA No.679 & 680/JP/2023
आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”A” JAIPUR Jh lanhi xkslkbZ] U;kf;d lnL; ,oa Mk0 ehBk yky ehuk] ys[kk lnL; ds le{k BEFORE: SHRI SANDEEP GOSAIN, JM & Dr. MITHA LAL MEENA, AM vk;dj vihy la-@ITA No.679 & 680/JP/2023 fu/kZkj.k o"kZ@Assessment Year : 2019-20 & 2022-2023 The DCIT cuke Shri Amit Gupta Vs. Circle-6 54, Tonk Road, Taruchhaya Nagar, Jaipur Jaipur LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: ANHPG 9142 R vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@Assessee by : Shri Rohan Sogani, CA & Shri Rajiv Sogani, CA jktLo dh vksj ls@Revenue by: Shri A.S. Nehra, Addl. CIT-DR lquokbZ dh rkjh[k@Date of Hearing : 31/01/2024 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 26 /04/2024 vkns'k@ORDER PER: SANDEEP GOSAIN Both these appeals have been filed by the Department against two different orders of Addl./JCIT(A)-11, Mumbai both dated 22-09-2023 for the assessment years 2019-20 and 2022-23 wherein the Department has raised following grounds of appeal.
2 DCIT, CIRCLE -6, JAIPUR VS AMIT GUPTA, JAIPUR ITA No. 679/JP/2023 – A.Y. 2019-20 1. On the facts and circumstances of the case and in law the order of the ld. CIT(A) is contrary to the facts and also the law applicable to the facts of the case.
2. On the facts and circumstances of the case and in law the ld CIT(A) ought to have appreciated that Rule 128(9) of the I.T. Rules provides that filing of Form 67 on or before the due date of filing of return for the purpose of seeking foreign tax credit is a mandatory condition.
3. On the facts and circumstances of the case and in law the ld. CIT(A) erred in allowing the foreign tax credit amount of Rs.64,00,660/- without appreciating the fact that the assessee neither filed Return nor Form 67 for claiming foreign tax credit within due date prescribed for the relevant year which is due date prescribed for the relevant year which is in contravention to the provisions of the Act.
ITA No. 680/JP/2023 – A.Y. 2012-23 1. On the facts and circumstances of the case and in law the order of the ld. CIT(A) is contrary to the facts and also the law applicable to the facts of the case.
On the facts and circumstances of the case and in law the ld CIT(A) ought to have appreciated that Rule 128(9) of the I.T. Rules provides that filing of Form 67 on or before the due date of filing of return for the purpose of seeking foreign tax credit is a mandatory condition.
On the facts and circumstances of the case and in law the ld. CIT(A) erred in allowing the foreign tax credit amount of Rs.53,15,256/- without appreciating the fact that the assessee neither filed Return nor Form 67 for claiming foeign tax credit within due date prescribed for the relevant year which is due 3 DCIT, CIRCLE -6, JAIPUR VS AMIT GUPTA, JAIPUR date prescribed for the relevant year which is in contravention to the provisions of the Act. 2.1 First of all, we take up the grounds of appeal
of the department for the assessment year 2019-20 for adjudication. Brief facts of the case are that the Appellant is a resident individual for the Financial Year 2018
19. (relevant to AY 2019-20). The Appellant filed its belated return of income u/s.139(4) of the Act on 29/02/2020 vide acknowledgment number 314235180290220 declaring total income at Rs. 2,53,30,920/-. The appellant is a salaried person and also earning income from house property and other source. During the year under consideration appellant had received salary of Rs. 1,47,43,499/-, house property income of Rs. 1,06,91,690/- and income from other sources of Rs.80,734/-. The appellant has claimed deduction under chapter Vi-A of the Act of Rs.1,85,000/- Further, the assesse has made tax payments as Foreign Tax Credit (FTC) u/s.90/91 of the Act of Rs.64,00,660/- and other payments ie. TDS/TCS, Advance tax of and self- assessment tax u/s.140A of the Act has made by the assessee that met the total tax liability as per the assessee. The ITR was processed u/s 143(1) of the Act by the CPC, Bangaluru and order dated 19/03/2021 was passed wherein aggregate tax liability was enhanced by levying Interest u/s 234A,234B & 234C of the Act of Rs. 27,70,510/- by disallowance of Foreign Tax Credit (FTC) u/s 90/91 of the Act of Rs. 64,00,660/-, 4 DCIT, CIRCLE -6, JAIPUR VS AMIT GUPTA, JAIPUR 2.2 Aggrieved by the order of the ld. CIT(A), the assessee carried the matter before the ld. CIT(A) who allowed the appeal of the assessee by observing as under:- ‘’6. Decision There is no denying of facts that tax was deducted on the income earned in USA The deduction of tax has been duly certified by the authorised Chartered Accountant. On examination of Section 90, Section 91 and DTAA, it does not provide for denial of exemption merely on account of delay in filing of certain Forms, in this case Form 67. Having regard in consonance with the view expressed by the Co-ordinate Benches decision in the case of I.T.A. Sumedha Arora Vs ITO (No.1399/DEL/2022, Delhi) and Shri. Shashidhar Seetharam Sharma Vs ITO, CPC (ITA No.708/Bang/2022, Bengaluru) as discussed above. I held that claim of FTC does not get controlled solely by the delay in filing of Form 67 prescribed under Rule 128(9) of the Income Tax Rules. Hence, the Assessing Officer is directed to take cognizance of Form 67 so filed and grant FTC as may be entitled to the assessee in accordance with law.
2.3 During the course of hearing, the ld. DR supported the order of the AO. 2.4 On the other hand, the ld. AR of the assessee supported the order of the ld CIT(A) and filed the written submission to justify his claim. 2.5 We have heard both the parties and perused the materials available on record. In this case, it is noted that the assessee filed his return of income on 29-09- 2020 at a total income of Rs.2,53,30,920/- (PB 1-5). It is also noted that while filing the return of income, the assessee considered income of Rs.2,30,75,189/-, 5 DCIT, CIRCLE -6, JAIPUR VS AMIT GUPTA, JAIPUR earned in USA as part of his total income offered for tax in India. Against the income earned in USA, assessee paid tax of Rs.64,00,660/- in USA. Resultantly, while filing the return of income, assessee took credit of tax paid in USA of Rs.64,00,600/- in accordance with Section 90/91 of the Income Tax Act, 1961. The return of income was processed u/s 143(1) vide order darted 19-03-2021 and while processing such return CPC, Bangalore rejected the foreign tax credit (FTC) claimed of Rs.64,00,660/- and raised demand against the assessee of such amount including interest which in first appeal has been allowed by the ld. CIT(A) by observing that ‘’Having regard in consonance with the view expressed by the Co- ordinate Benches decision in the case of I.T.A. Sumedha Arora Vs ITO (No.1399/DEL/2022, Delhi) and Shri. Shashidhar Seetharam Sharma Vs ITO, CPC (ITA No.708/Bang/2022, Bengaluru) as discussed above. I held that claim of FTC does not get controlled solely by the delay in filing of Form 67 prescribed under Rule 128(9) of the Income Tax Rules. Hence, the Assessing Officer is directed to take cognizance of Form 67 so filed and grant FTC as may be entitled to the assessee in accordance with law’’. The Bench has taken into consideration the order of the ld. CIT(A) in which it is found that the issue in question is squarely covered by the decision of Coordinate Bench of ITAT Delhi and Bangalore Bench in the cases in the case of I.T.A. Sumedha Arora Vs ITO (No.1399/DEL/2022, Delhi) and Shri. Shashidhar Seetharam Sharma Vs ITO, CPC (ITA 6 ITA NO. 679JP/2023 DCIT, CIRCLE -6, JAIPUR VS AMIT GUPTA, JAIPUR No.708/Bang/2022, Bengaluru). Respectfully following the same, we concur with the findings of the ld. CIT(A) and thus the appeal of the Department is dismissed. 3.1 As regards the appeal of the Department for the assessment year 2022-23 on the similar issue, we feel that the decision taken by the Bench in the assessment year 2019-20 shall apply mutatis mutandis in the case of the assessee for the assessment year 2022-23. Thus the appeal of the Department is dismissed. 4.0 In the result, both the appeals of the department are dismissed. Order pronounced in the open court on 26 /04/2024.