SOUMITRA GANGULI,KOLKATA vs. INCOME TAX OFFICER, WARD 61(3), KOLKATA, KOLKATA

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ITA 633/KOL/2024Status: DisposedITAT Kolkata06 September 2024AY 2019-20Bench: Dr. Manish Borad (Accountant Member), Shri Sonjoy Sarma (Judicial Member)4 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the filing of Form 67 is directory and not mandatory. If filed belatedly with all necessary details before the revenue authorities, the FTC claim should be allowed. The disallowance of FTC was set aside.

What were the facts?

The assessee claimed foreign tax credit (FTC) of INR 11,42,039/- for taxes paid in the USA. The FTC was denied due to the delayed filing of Form 67. The assessee argued that the intimation under Section 143(1) was bad in law as it made adjustments without an opportunity to be heard.

What were the issues?

Whether the disallowance of foreign tax credit due to delayed filing of Form 67 is valid, and if an intimation under Section 143(1) making adjustments without a hearing is legally tenable.

Which sections of the Income-tax Act were involved?

Section 143(1),Section 234B,Section 234C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH: KOLKATA

Before: Dr. Manish Borad & Shri Sonjoy Sarma]

ORDER / आदेश Per Manish Borad, AM:

This appeal at the instance of assessee is directed against the order of Ld. Commissioner of Income Tax (Appeals)-Addl/JCIT(A)-2, Mumbai (hereinafter referred to as Ld. CIT(A)] dated 29.01.2024 for AY 2019-20. 2. The following grounds of appeal raised by the assessee are as under:

Assessment Year: 2019-20 Soumitra Ganguly i) That on facts and circumstances of the case and in law, the Ld. CIT(A) has erred in upholding the disallowance of foreign tax credit amounting to INR 11,42,039/- and disregarding Form 67 filed by the appellant to claim the said credit. ii) Without prejudice to above, intimation issued u/s 143(1) of the Act by Centralized Processing Center (CPC) is bad in law and liable to be quashed inasmuch as the intimation has sought to make adjustment on account of a debatable issue without giving any opportunity of being heard to the Appellant. iii) That on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in levying interest u/s 234B and 234C of the Income Tax Act, 1961. The Appellant craves leave to add to, alter, amend and/or withdraw any ground or grounds of appeal either or during the course of hearing appeal.

3.

When the case was called for none appeared on behalf of the assessee even though the notice of hearing has been sent by RPAD on 19.08.2024. On observing that small issue has been raised against the denial of Foreign Tax Credit of Rs. 11,42,039/- we decide to adjudicate the same with the assistance of Ld. D.R and available records.

4.

The sole grievance of the assessee is that the Ld. CIT(A) erred in upholding the disallowance of foreign tax credit (in short FTC) of Rs. 11,42,039/- and also raised the grounds that CPC did not provide any opportunity before making the adjustment in the intimation u/s 143(1) of the Act.

5.

The ld. D.R supported the order of Ld. CIT(A).

6.

We have heard the Ld. D.R and perused the records placed before us. We notice that the assessee is a resident and ordinarily resident filed his original return of income on 29.07.2019 for AY 2019-20 which was subsequently revised on 31.07.2020. During the year under consideration, the assessee being resident, was liable to pay tax on its global income. Apart from the salary earned in India, the assessee has earned income from outside India (United States of America). The salary income received by the assessee in USA was also subject to tax and the same amounted to Rs. 62,58,617/- for Assessment Year: 2019-20 Soumitra Ganguly the period from 02.04.2018 to 31.12.2018. The said income has duly been offered to tax in the income tax return. However, a sum of Rs. 11,42,039/- was deducted at source by the employer in USA. The assessee furnished Form 67 claiming FTC of Rs. 11,42,039/- . The FTC claimed by the assessee has been denied on account of delay in filing Form 67.

7.

We find that this issue has been raised before this Tribunal on multiple occasions and it has been consistently held that filing of Form 67 is directory in nature and therefore even if it is belatedly filed but is placed on record before the revenue authorities, that before passing of an order, if the facts are verifiable then the legitimate claim made by the assessee should be allowed. We find support from the decision of this Tribunal in the case of Bijender Singh vs. ITO in dated 12.06.2024 and also the decision of Tribunal in case of Krishna Kumar Choudhury vs. DCIT in dated 13.04.2023. Respectfully following the consistently view taken by this Tribunal and on finding that the Form 67 has been filed with all necessary details, we therefore set aside the finding of Ld. CIT(A) and allow the grounds raised by the assessee claiming the alleged FTC of Rs. 11,42,039/- and direct the AO to accept the Form 67 filed by the assessee and allow the alleged FTC in accordance with law. In the result, the appeal of the assessee is allowed. 7.

Order is pronounced in the open court on 6th September, 2024

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