SATISHKUMAR EKAMBARAM,INDIA vs. THE INCOME-TAX OFFICER, NAMAKKAL

Aforesaid appeals by assessee for Assessment Years (AY) 2018- 19 & 2019-20 have identical issue i.e., allowance of foreign tax credit (FTC). At the time of hearing, none appeared for assessee and accordingly, the appeals were heard with the able assistance of departmental representative.

The appeal for AY 2018-19 arises out of an order passed by Learned Addl. /Joint Commissioner of Income Tax (Appeals)-1, Jaipur, [CIT(A)] on 06-06-2024 in the matter of an intimation issued by CPC, Bengaluru u/s 143(1) on 10-06-2020 denying Foreign Tax Credit of Rs.9.59 Lacs as claimed by the assessee u/s 90. The same was denied for want of filing of requisite Form 67 along with return of income.

It emerges that the assessee filed original return of income on 30- 08-2019 but it did not claim FTC of Rs.9.59 Lacs. The assessee revised return of income on 31-03-2019 and filed Form No. 67 on 30-03-2019. The ITR was processed by CPC and credit was not allowed since Form No.67 was filed belatedly. The Ld. CIT(A) confirmed the action of CPC since this claim was not made in the original return of income. As per Rule 128(9), this form was required to be furnished along with return of income u/s 139(1). Aggrieved, the assessee is in further appeal before us.

We find that the issue of foreign tax credit is covered in assessee’s favor by the decision of this Tribunal in the case of ITO vs. Smt. Chengam Durga (ITA No.1491/Chny/2023 dated 08-04-2024). The bench, considering the decision of Hon’ble High Court of Madras in the case of Duraiswamy Kumaraswamy (WP No.5834 of 2022 & ors. order dated 06.10.2023), held that filing of this form in terms of Rule 128 was only directory in nature. The rule is only for the implementation of the provisions of the act and it would always be directory in nature. Respectfully following the same, we direct Ld. CIT(A) to grant impugned Foreign Tax Credit to the assessee after verifying Form No.67.