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Income Tax Appellate Tribunal, NAGPUR BENCH, NAGPUR
Before: SHRI V. DURGA RAO & SHRI K.M. ROY, ACCOUNTANT, MEMBER
Date of Hearing – 19/09/2024 Date of Order – 23/09/2024
O R D E R PER K.M. ROY, A.M.
The present appeal has been filed by the assessee challenging the impugned order dated 07/06/2024, passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, [“learned CIT(A)”], for the assessment year 2020–21.
In its appeal, the assessee has raised following grounds:–
“1. The learned CIT(A), AddI/JCIT (A)-1, Jaipur "hereafter referred as CIT(A)"; erred in law and on facts in upholding intimation u/s 143(1) dated 06/08/2021 passed by, DCIT, CPC Bangalore thereby denying the foreign tax credit of Rs.6,99,334 pertaining to the foreign sourced salary income of Rs.48,55,367 which is doubly taxed, i.e., in USA as well as India. 2. The lower IT authorities ought to have appreciated that.
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– Rule 128(9) of the IT Rules does not provide for disallowance of FTC in case of delay in filing Form No.67. – Filing of Form No.67 is NOT mandatory but a directory requirement. – DTAA overrides the provisions of the Act, and the Rules cannot be contrary to the Act. 3. The appellant craves leave to add/modify/delete/amend all / any of the grounds of appeal.”
Facts in Brief:– The assessee is an Individual filed its return of income on 29/03/2022, disclosing total income of ` 75,76,900. During the year, the assessee derived income from salary from United States of America (USA) as well as from India also. Out of the total salary of ` 78,50,777, an amount of ` 48,55,367, was earned in USA. Since the assessee is a resident of India, for the said assessment year 2020–21, the assessee’s global income was taxable and, hence the assessee offered the said income derived from USA to tax in India. Considering the residential status of the assessee being Indian, the assessee filed Form no.67, to claim foreign tax credit under section 90 of the Act amounting to ` 6,99,334, (i.e., 14% of the tax paid outside India). Subsequently, intimation under section 143(1) of the Income Tax Act, 1961 ("the Act") received from Central Processing Centre, Bengaluru, wherein a demand of ` 26,54,950, was raised, the details of which are as under:–
i) Granting short credit of TDS of ` 14,93,947, as against full credit of ` 16,86,557, pertaining to salary income of ` 31,73,253, which was duly reflected in Form no.26AS; and ii) Denial of credit of foreign tax credit of ` 6,99,334, on the contention that Form no.67, was not filed on or before the due date of furnishing the return of income under section 139(1).
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The assessee being unsuccessful before the Assessing Officer, filed appeal before the first appellate authority.
Meanwhile, the assessee’s claim of full TDS credit amounting to ` 16,86,557, was allowed via rectification order passed under section 154 of the Act.
Before the learned CIT(A), the assessee made a detailed submissions. The learned CIT(A) considering the submission of the assessee, held that as per rule 128 of the Income Tax Rules, 1962, Form no.67, has to be filed on/or before the due date of furnishing the return of income under section 139(1) of the Act thereby dismissing assessee’s appeal directing the Assessing Officer to verify the claim of TDS credit of ` 14,93,947, on the salary income offered by the assessee amounting to ` 31,73,253, which was duly reflected in Form no.26AS. The assessee being aggrieved, by the order so passed by the learned CIT(A), is in appeal before the Tribunal.
Before us, the learned Authorised Representative appearing for the assessee submitted that provisions of Rule–128(9) of the Income Tax Rules, 1962, does not provide for disallowance of FTC in case of delay in filing From no.67. He submitted that the provisions of Rule–128(9) are procedural in nature. Double Taxation Avoidance Agreement (DTAA) overrides the provisions of the Act and the rules cannot be contrary to the Act. The learned A.R., in support of his arguments, relied upon the following judicial pronouncements:–
4 Yogesh Nandlal Chande ITA no.402/Nag./2024 i) Akshay Rangroji Umale v/s DCIT, ITA no.1428/Pun./2023, A.Y. 2019–20, order dated 01/02/2024; ii) DCIT v/s Shri Prabha Nageshwar, ITA no.85/Nag./2023, A.Y. 2020–21, order dated 09/05/2024 iii) Brinda Rama Krishna v/s ITO, ITA no.454/Bang./2021, A.Y. 2018– 19, order dated 17/11/2021; iv) M/s. 42 Hertz Software India Pvt. Ltd. v/s ACIT, ITA no.29/Bang./2021 A.Y. 2017–18, order dated 07/03/2022; v) Vinodkumar Lakshmipathi v/s CIT(A), ITA no.680/Bang./2022, A.Y. 2018–19, order dated 06/09/2022; vi) Sonakshi Sinhav/s CIT(A), ITA no.1704/Mum./2022, A.Y. 2018– 19, order dated 20/09/2022; and vii) Ritesh Kumar Garg v/s ITO, ITA no.261/Jp./2022, A.Y. 2020–21, order dated 15/09/2022.
The learned Departmental Representative supported the order of the authorities below.
We have given a thoughtful consideration to the arguments made by the rival parties and perused the material available on record. We find that the Benches of the Tribunal on pan India basis had delved into the matter and had granted relief to the assessee. The learned Departmental Representative, though relied upon the order of the authorities below, but failed to distinguish any of the above judgments. The learned Departmental Representative also failed to adduce any cogent material or any arguments to take a view other than the view taken by the Co–ordinate Bench of the Tribunal cited supra Consequently, relying upon the crudité pronouncements of the Co–ordinate Bench of the Tribunal, we hold that the assessee is entitled to foreign tax credit of ` 6,99,334, irrespective of belated furnishing of Form no.67. Accordingly, all the grounds raised by the assessee are allowed.
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In the result, appeal filed by the assessee is allowed. Order pronounced in the open Court on 23/09/2024