RAJESH BABASHANKAR,CHENNAI vs. ASSISTANT DIRECTOR OF INCOME TAX, CENTRALIZED PROCESSING CENTRE, BENGALURU

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ITA 616/CHNY/2024Status: DisposedITAT Chennai29 May 2024AY 2018-2019Bench: HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM AND HON’BLE SHRI MANU KUMAR GIRI (Judicial Member)3 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that filing Form 67 is directory in nature, not mandatory, following a coordinate bench decision and a Madras High Court ruling. Therefore, the denial of Foreign Tax Credit was incorrect.

What were the facts?

The assessee was denied Foreign Tax Credit for multiple assessment years because Form 67 was not filed along with the return of income. The CIT(A) confirmed this denial based on Rule 128(8) & (9) of the Income Tax Act.

What were the issues?

Whether the filing of Form 67 along with the return of income is mandatory for claiming Foreign Tax Credit, or if it is a directory requirement.

Which sections of the Income-tax Act were involved?

Section 143(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘B’ BENCH, CHENNAI

Before: HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM & HON’BLE SHRI MANU KUMAR GIRI, JM

For Respondent: Shri. S. Easwar, IRS, JCIT
Hearing: 20.05.2024Pronounced: 29.05.2024

आदेश / O R D E R PER MANU KUMAR GIRI (Judicial Member)

1.

Aforesaid appeals by assessee for Assessment Years (AYs) 2018-19, 2019-20 & 2022-23 arises out of an orders of even date 08.01.2024 passed by the ADDL./JCIT (A)-2, Office of the Commissioner of Income Tax (Appeals), JAIPUR in the matter of an intimation issued by CPC u/s 143(1) of the Act on 04-12-2020, 19.03.2021 and 07.07.2023 denying Foreign Tax Credit of Rs.3,54,423/-, Rs.3,64,612/- and Rs.5,24,379/- respectively since the assessee did not file Form 67 along with the return of income. The assessee filed this forms on 14.12.2020, 31.08.2019 and 22.11.2022 respectively. The Ld. CIT(A) confirmed the denial of Foreign Tax Credit considering the provisions of Rule 128 (8) &(9) which mandate the assessee to file this form along with the return of income. Aggrieved, the assessee is in further appeal before us.

2.

During hearing none has appeared for assessee. The Ld. Sr. DR has pleaded for dismissal of the appeals.

3.

We find that this issue has been decided in favour of the assessee’s by the Co-ordinate Bench 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 in 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. AO to grant impugned Foreign Tax Credit to the assessee.

4.

In the result, the appeals filed by the assessee in 617 &618/Chny/2024 for assessment Years 2018-19, 2019-20 & 2022-2023 stand allowed.

Order pronounced in the open court on 29th day of May, 2024.

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