Appeal allowed for foreign tax credit after factual verification

The appeal in ITA No.817/Mum/2022 for A.Y.2019-20 was against the dismissal of the appeal as 'infructuous' and denial of foreign tax credit. The National Faceless Appeal Centre (NFAC) set aside the issue for factual verification, disagreeing with the dismissal based on the merger of orders. The Tribunal directed the ld. AO to grant foreign tax credit after verification, emphasizing the need for factual assessment before deciding on the credit claim. The appeal was allowed for statistical purposes, highlighting the importance of proper verification in such matters.

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Issues:
Appeal against dismissal as infructuous, denial of foreign tax credit, granting credit for foreign tax relief, setting aside issue for factual verification.

Analysis:
The appeal in ITA No.817/Mum/2022 for A.Y.2019-20 was against the order by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC) in appeal No. NFAC/2018-19/10013393 dated 25/03/2022. The appeal arose from the order of assessment passed u/s.143(1) of the Income Tax Act, 1961 by the ld. Asst. Director of Income Tax, CPC, Bangaluru. The assessee raised grounds of appeal related to the dismissal of the appeal as infructuous, denial of foreign tax credit, and failure to grant credit for foreign tax relief under section 90 of the Income-tax Act, 1961.

The NFAC dismissed the appeal of the assessee as 'infructuous' on the grounds that the order u/s.154 of the Act had subsumed and merged the intimation u/s.143(1) of the Act. However, the Tribunal disagreed with this decision, noting that the assessee had claimed foreign tax credit of Rs.31,097 in accordance with the provisions of Section 90 / 90A of the Act. The credit was denied in the intimation u/s.143(1) without any reason. The Tribunal held that the issue required factual verification and set it aside to the file of the ld. AO to grant foreign tax credit after due verification in accordance with the law. The grounds raised by the assessee were allowed for statistical purposes.

In conclusion, the appeal of the assessee was allowed for statistical purposes, and the issue of granting foreign tax credit was set aside for factual verification to be done by the ld. AO in accordance with the law. The Tribunal emphasized the importance of verifying the factual aspects of the case before making a decision on the foreign tax credit claim.

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