ITAT rules in favor of assessee, grants foreign tax credit post Covid-19 extension

The Appellate Tribunal ITAT VISAKHA PATNAM allowed the appeal filed by the assessee regarding the denial of foreign tax credit. The Tribunal held that the assessee had filed the required documents within the extended due dates due to Covid-19, distinguishing the case from previous delays. Consequently, the Tribunal directed the Assessing Officer to verify and grant the foreign tax credit claimed by the assessee.

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Issues involved:
The issues involved in the judgment are the denial of foreign tax credit claimed by the assessee due to non-filing of statement in Form-67 within the specified due date under the Income Tax Act, 1961.

Summary:

Issue 1: Denial of foreign tax credit by Ld. CIT(A)
The appeal was filed by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals) denying the foreign tax credit claimed by the assessee. The Ld. CIT(A) dismissed the appeal stating that the assessee did not file a statement in Form-67 by the due date specified for filing the return of income under section 139(1) of the Act.

Issue 2: Compliance with extended due date
The Ld. AR argued that the original return of income was filed within the extended due date allowed by the CBDT due to Covid-19. The statement in Form-67 was filed on 31/3/2021, which the Ld. AR contended was within the extended due date as per the provisions of THE TAXATION AND OTHER LAWS (RELAXATION AND AMENDMENT OF CERTAIN PROVISIONS) ACT, 2020.

Issue 3: Tribunal's decision
After hearing both parties, the Tribunal found that the assessee had filed the return of income and the statement in Form-67 within the respective extended due dates as per the provisions applicable during the Covid-19 pandemic. The Tribunal distinguished the present case from a previous case relied on by the Ld. DR, where the filing was delayed significantly. The Tribunal held that the foreign tax credit claimed by the assessee should be allowed, directing the Ld. AO to verify and grant the credit accordingly.

In conclusion, the Appellate Tribunal ITAT VISAKHA PATNAM allowed the appeal filed by the assessee, directing the Ld. AO to grant the foreign tax credit claimed after verifying its correctness.

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