2023 (10) TMI 86 - AT - Income Tax

Appeal allowed with delay condoned, FTC claim granted, DTAA provisions prevail over domestic rules.

Ashish Agrawal, Pune Versus Income Tax Officer, Ward-12 (1), Hyderabad

Ashish Agrawal, Pune Versus Income Tax Officer, Ward-12 (1), Hyderabad - TMI Issues:1. Delay of 710 days in filing the appeal against the intimation under section 143(1) of the Income Tax Act, 1961.2. Delay of 604 days in filing the rectification application and disallowance of Foreign Tax Credit (FTC) of Rs. 1,94,384/- paid by the assessee.Delay in Filing Appeal:The appellant, an Indian National employed with a company in the USA, filed the return of income claiming Foreign Tax Credit (FTC) for income taxed in both India and the USA. The Assessing Officer denied the FTC claimed, leading to a belated appeal by the appellant. The CIT(A) dismissed the appeal due to the delay of 710 days, citing lack of sufficient cause for the delay. However, the Tribunal, considering the pandemic-related limitations, condoned the delay and proceeded to adjudicate the appeal on its merits.Foreign Tax Credit Disallowance:The appellant's claim for FTC was denied by the Assessing Officer, leading to an appeal before the Tribunal. The appellant argued that filing Form 67 for FTC was a directory requirement, not mandatory, and relied on various precedents to support the condonation of the delay and allowance of the FTC claim. The Tribunal, in line with previous decisions, held that Rule 128(9) of the Rules cannot disallow FTC due to a delay in filing Form 67. The Tribunal emphasized that the DTAA provisions override the Act, allowing the deduction of income tax paid in the USA. Therefore, the Tribunal allowed the appeal, granting the FTC claim to the appellant.Conclusion:The Tribunal allowed the appeal of the appellant, condoning the delay in filing the appeal and granting the Foreign Tax Credit (FTC) claim of Rs. 1,94,384/-, emphasizing the precedence of DTAA provisions over domestic rules.