Tribunal emphasizes merit over technicalities in foreign tax credit claim

The Tribunal allowed the appeal, holding that the delay in filing Form no.67 should not bar the assessee from claiming foreign tax credit. Emphasizing the need to evaluate claims on merit rather than technicalities, the Tribunal directed the Assessing Officer to reassess the claim based on the documents submitted by the assessee. The decision underscored that Rules should not supersede substantive provisions of the Act, allowing the appeal for statistical purposes and rejecting the denial of the claim solely on procedural grounds.

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Issues:
1. Denial of foreign tax credit under section 90/90A of the Income Tax Act due to delay in filing Form no.67.

Analysis:
The appellant filed an appeal against the order passed by the Commissioner of Income Tax (Appeals) regarding the denial of foreign tax credit under section 90/90A of the Act due to a delay in filing Form no.67. The appellant claimed credit for foreign tax paid in the USA amounting to Rs. 1,82,192 for the assessment year 2020-21. The appellant filed the return of income after the extended due date and submitted Form no.67 along with relevant certificates on the same date. The Commissioner dismissed the appeal based on the late filing of Form no.67. The appellant contended that the provisions of section 90/91 are substantive and override Rule 128. The Tribunal noted that Rule 128(9) required filing Form no.67 before the due date of the return, but recent amendments extended the deadline to the end of the assessment year.

The Tribunal referred to a similar case where the Tribunal held that a delay in filing Form no.67 does not preclude the assessee from claiming foreign tax credit. The Tribunal emphasized that Rules cannot override the Act and filing Form no.67 is directory, not mandatory. The Tribunal directed the Assessing Officer to decide the claim of foreign tax credit on merits after accepting the Form no.67 and related documents. The Tribunal allowed the appeal for statistical purposes, emphasizing that the denial of the claim based on a technicality without considering the merits was not appropriate.

In conclusion, the Tribunal allowed the appeal, stating that the delay in filing Form no.67 should not prevent the assessee from claiming foreign tax credit. The Tribunal highlighted the importance of assessing the claim on its merits rather than dismissing it based on technicalities. The decision emphasized that Rules should not override substantive provisions of the Act and directed the Assessing Officer to reconsider the claim based on the documents submitted by the assessee.

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