KAMLESH D PATEL,CHEGUR, RANGAREDDY vs. ACIT, CIRCLE-2(1)(1), VADODARA

Kamlesh D. Patel The ACIT, A28/29, Madhuvanam Circle-2(1)(1), Apartment, Vs Vadodara Kanha Shanthi Vanam, Nandigama Mandal, Chegur, Rangareddy, Telangana PAN: ASDPP9327Q (Respondent) (Appellant) Assessee Represented: Shri Tushar Hemani, Sr. Adv. & Shri Parimalsinh B. Parmar, A.R. Revenue Represented: Smt. Malarkodi R., Sr.D.R. Date of hearing : 14-10-2024 Date of pronouncement : 29-11-2024 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:-

This appeal is filed by the Assessee as against the appellate order dated 01.04.2024 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, (in short referred to as “CIT(A)”), arising out of the Rectification order passed under section 154 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Year 2019-20.

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3. As against the exparte assessment order, the assessee filed appeal before Ld. CIT(A), NFAC, Delhi vide Appeal Acknow ledgement No. 115751840020222 dated 02-02-2022. In the meanwhile, the Assessing Officer found though the relief u/s. 90 of the Act to the tune of Rs.10,35,734/- was disallowed to the assessee, however in the computation sheet, the same was mistakenly granted to the assessee which is an apparent mistake on record. Therefore the Ld. A.O. issued a notice dated 17-10-2023 to give proof for the claim of relief made u/s. 90 of the Act. Since the assessee failed to make a reply, the Assessing Officer passed the Rectification order demanding a sum of Rs.30,90,458/- after adjusting the refund already issued of Rs.6,86,660/-.

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4. Aggrieved against the rectification order, the assessee filed an appeal before Ld. NFAC with categorically mentioning in Form No. 35 at Serial No. 4, the pendency of the appeal in assessee’s own case for the very same assessment year. However, in the appellate proceedings, the assessee filed its written submission and pleaded that filing of Form No. 67 for claiming Foreign Tax Credit is only directory and not mandatory. Hence late filing of Form No. 67 on 24-03-2024 is not mandatory and the assessee should be given the claim of Foreign Tax Credit. The Ld. CIT(A) considered the above submission dismissed the appeal by observing as follows:

4.6 Taxes are paid in an alien nation, the particulars of which can never be verified by the Income tax Authorities in India. It is for such reason that Form no.67 which consists of 4 parts has a verification column, affirming that the claim of the FTC, to the best of the knowledge and belief of the Appellant is true and correct. Providing credit of FTC in the absence of such verification is not logical while the authorities erred in failing to comprehend that the claims are otherwise not verifiable. Further, Rule 128 incorporates the word "Shall", which imply that filing of Form no.67 before the time limit u/s.139(1) [now extended to 139(4)] is mandatory. Having failed to file the same within 139(1) limit, the JAO was correct in denying the credit of FTC paid abroad.

1. The Commissioner of Income Tax (Appeals) erred in denying credit for taxes paid overseas for the reason that Form 67 was not filed along with the return of income 2. The Appellant submits that the relief available under Section 90/90A was denied by the commissioner of Income Tax (Appeals) for the season that the appellant did not filed Form 67 as prescribed as per Rule 128(9) of the Income Tax Rules, 1962.

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5. The Appellant submits that the provisions of the DTAA should be applicable to the assesse to the extent that they are more beneficial and the Act does not override the provisions of the DTAA. 6. The Appellant further submits that it has been held in various judicial forums that filing of Form 67 is only a directory requirement and not a mandatory requirement. 7. The Appellant submits that the Hon’ble High Court of Madras in the case of Duratswamy Kumaraswamy (WP No 5834 of 2022 & ors. order dated 06.10.2003) concluded that the delay in filing Form 67 may be condoned and granted the Foreign Tax Credit claimed. 8. The Appellant submits the denial of the credit by the Commissioner of Income Tax (Appeals) is not in accordance with the law. 9. The learned CITIA erred in not granting the relief u/s. 90 for Foreign Tax Credit as the rectification order passed by the AO u/s.154 was without a DIN and was violating the guidelines in making the order as per the “PRESS RELEASE” dated 14/08/2019 issued by the CBDT, and hence is not in conformity with the prescribed guidelines and liable to be treated as invalid and quashed. 10. The Appellant craves to add, amend, modify, alter or forego any ground of appeal at any time before or during the hearing of this appeal and request an opportunity of being heard before the order is passed.

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Order pronounced in the open court on 29 -11-2024