Tribunal Grants Tax Relief, Overturns Requirement for Timely Filing of Form 67, Highlights Substantive Tax Credit Rights.

The Tribunal allowed the appellant's appeal, overturning the denial of tax relief for Rs. 3,50,106/- paid in the Republic of Korea. The Tribunal found that the requirement to file Form No. 67 before the due date was directory, not mandatory, as no adverse consequences were specified for non-compliance. The appellant's eligibility for foreign tax credit was upheld since Form No. 67 was filed before the assessment proceedings concluded. The decision emphasized that procedural requirements without specified penalties for non-compliance should not obstruct substantive tax relief claims. The order was pronounced in Kolkata on 9th May, 2023.

---

---

Issues involved:
The appeal involves the denial of relief of tax paid in Republic of Korea under Article 23(a)(i) in DTAA with Republic of Korea, claimed u/s 90 of the Income-tax Act, 1961.

Details of the judgment:
The appellant, an individual, filed the appeal against the order of the National Faceless Appeal Centre passed u/s 250 of the Act for the Assessment Year 2020-21. The main contention was the denial of tax relief of Rs.3,50,106/- paid in Republic of Korea and claimed u/s 90 of the Act. The appellant was employed in South Korea from 16/04/2018 to 08/09/2019. The relief was denied as Form No. 67 was not filed before the due date of filing the return u/s 139(1) of the Act.

The appellant argued that the filing of Form No. 67 is directory, not mandatory, citing a decision of the Coordinate Bench. The Tribunal held that the denial of relief solely for the delay in filing Form 67 was not justified. It was noted that the conditions for claiming foreign tax credit were not violated, and the requirement of filing Form 67 before the due date was directory in nature. The Tribunal relied on previous decisions and allowed the appellant's claim for foreign tax credit. The appeal was allowed based on this finding.

The Tribunal's decision was based on the principle that if no adverse consequences are specified for non-adherence to a procedure, it is considered directory. The appellant's eligibility for foreign tax credit was upheld as Form No. 67 was filed before the completion of the assessment proceedings, even though not in accordance with Rule 128(9) of the Income Tax Rules. The appellant's appeal was allowed, and the order was pronounced in Kolkata on 9th May, 2023.

---