Section 91 of the Income Tax Act
Income-tax Act, 2025: s.160
Section 91 of the Income-tax Act, 1961 corresponds to section 160 (Countries with which no agreement exists) of the Income-tax Act, 2025.
Read section 160 of the 2025 Act
Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.
The decision most relied on for Section 91 is PCIT v. State Bank of Patiala (391 ITR 218), cited in 228 of the 252 judgments on BharatTax that turn on this section.
Leading authorities on Section 91
Income from shares and securities held by banks as stock-in-trade constitutes business income, hence Section 14A disallowance is not attracted. Further, any disallowance under Section 14A cannot exceed the actual amount of exempt income earned by the assessee during the year.
Foreign Tax Credit (FTC) is allowable even if no tax is paid in India on the corresponding income due to deductions under sections 10A or 10AA, or losses in other units. The scope of income eligible for deduction under Section 10AA includes interest on deposits and realized gains on forward contracts.
The filing of Form 67 for claiming Foreign Tax Credit (FTC) is a directory requirement, not mandatory. Rule 128(9) does not provide for disallowance of FTC due to delay in filing this form. Double Taxation Avoidance Agreements (DTAAs) override domestic law.
Procedural law serves as an aid to justice, not an obstruction, and should not ordinarily be construed as mandatory; it is subservient to substantive justice.
The claim for Foreign Tax Credit cannot be denied solely due to a delay in filing Form-67, as the requirement for filing Form-67 under Rule 128(9) is considered directory and not mandatory. The provisions of a Double Taxation Avoidance Agreement (DTAA) prevail over the Income-tax Act, 1961.
An assessee's claim for Foreign Tax Credit (FTC) cannot be rejected merely because Form 67 was filed after the due date under section 139(1), provided it is filed before the completion of assessment proceedings.
The requirement to file Form 67 by the due date for claiming foreign tax credit is directory, not mandatory, if filed before the completion of assessment proceedings.
State tax paid in a foreign country is not allowable as a deduction when computing total world income. Foreign tax credit can be claimed only as per the prescribed procedure, not as an expenditure.
Section 14A of the Income-tax Act is not attracted, and dividend income cannot be disallowed, when shares are held as stock-in-trade by banks, with the primary purpose of trading for profit. This applies even if the shares were acquired through an IPO.
The ITAT held that failure to file Form 67 by the due date for filing the return of income is not fatal to the claim for foreign tax credit. The appellate authority can condone the delay in filing Form 67.
