Tribunal grants Foreign Tax Credit despite Form 67 non-compliance, emphasizing DTAA provisions over procedural requirements.

The Tribunal allowed the appeal, directing the Assessing Officer to grant the Foreign Tax Credit (FTC) relief to the assessee despite procedural non-compliance with Form 67 filing requirements. The Tribunal emphasized that the filing of Form 67 was directory, not mandatory, and should not impede the assessee's entitlement to FTC. Citing relevant judicial precedents, the Tribunal underscored the primacy of DTAA provisions over domestic tax laws and stressed that procedural lapses should not undermine substantive rights.

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Issues Involved:
1. Validity of the order under Section 250 of the Income Tax Act.
2. Adequacy of the opportunity provided by the CIT(A).
3. Entitlement to Foreign Tax Credit (FTC) relief under Sections 90/91 of the Income Tax Act.
4. Impact of procedural non-compliance on FTC claims.
5. Relevance of judicial precedents on the mandatory nature of Form 67 filing.

Summary:

1. Validity of the Order under Section 250:
The assessee contested the order under Section 250 of the Income Tax Act, arguing it was "bad-in-eyes of the law and fact." The Tribunal noted that the CIT(A) dismissed the appeal due to the non-filing of Form 67, which is required for claiming FTC.

2. Adequacy of the Opportunity Provided by the CIT(A):
The assessee argued that the CIT(A) did not provide a "reasonable and adequate opportunity of being heard." The Tribunal found that the CIT(A) dismissed the appeal without giving the assessee a chance to present her case, which was against the principles of natural justice.

3. Entitlement to Foreign Tax Credit (FTC) Relief:
The assessee claimed FTC relief under Sections 90/91 of the Act. The CIT(A) dismissed this claim because Form 67 was not filed on time. The Tribunal noted that the assessee filed her return within the due date but failed to submit Form 67 due to a lack of knowledge and procedural issues.

4. Impact of Procedural Non-Compliance on FTC Claims:
The Tribunal discussed whether the requirement to file Form 67 is mandatory or directory. Citing precedents, it concluded that the requirement is directory, not mandatory, and procedural delays should not deny the assessee her rightful FTC. The Tribunal referenced the decision in Ms. Brinda RamaKrishna vs. ITO and 42 Hertz Software India Pvt. Ltd. vs. ACIT, which supported this view.

5. Relevance of Judicial Precedents:
The Tribunal referenced the Supreme Court's judgment in Engineering Analysis Centre of Excellence (P.) Ltd., which held that DTAA provisions override the Income Tax Act and Rules. It also cited the Supreme Court's decision in PCIT vs. M/s Wipro Limited, emphasizing that procedural compliance should not negate substantive rights under DTAA.

Conclusion:
The Tribunal directed the AO to allow the benefit of FTC to the assessee, condoning the delay in filing Form 67. The appeal was allowed for statistical purposes, and the order was pronounced on 27th April 2023.

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