Tribunal allows appeal, overturning denial of Foreign Tax Credit for 2019-20 assessment year.

The appeal was allowed by the Tribunal, overturning the denial of Foreign Tax Credit (FTC) for the assessment year 2019-20. The Tribunal held that the delay in filing Form 67 along with the revised return under section 139(5) was justified due to factors beyond the assessee's control. It was emphasized that Rule 128(9) does not mandate the disallowance of FTC for delayed filing of Form 67, especially considering recent amendments extending the filing deadline. The Assessing Officer was directed to assess the claim for FTC based on the accepted Form 67 and related documents, ensuring the assessee's right to be heard.

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Issues Involved:
1. Denial of Foreign Tax Credit (FTC) due to the timing of filing Form 67.
2. Interpretation of Rule 128(9) regarding the filing deadline for Form 67.
3. Impact of procedural delays and external factors on compliance.

Summary:

Denial of Foreign Tax Credit (FTC):
The appeal was filed by the assessee against the order of the CIT (Appeals)/NFAC, which denied the Foreign Tax Credit (FTC) for the assessment year 2019-20. The denial was based on the fact that the assessee did not file Form 67 before the due date for filing the return under section 139(1) of the Income Tax Act, 1961, but did so along with the revised return under section 139(5).

Interpretation of Rule 128(9):
The main issue addressed was whether the assessee is entitled to FTC despite filing Form 67 along with the revised return under section 139(5) instead of the original return under section 139(1). The Tribunal noted that both the original and revised returns were filed within the extended due dates, and the delay in filing Form 67 was due to factors beyond the assessee's control, such as the death of the employer and procedural delays in receiving documents from Ghana.

Impact of Procedural Delays and External Factors:
The Tribunal referred to a similar case (Nirmala Murli Relwani Vs. ADIT) where it was held that mere delay in filing Form 67 would not preclude the assessee from claiming FTC. The Tribunal observed that Rule 128(9) does not mandate the disallowance of FTC for delayed filing of Form 67 and that recent amendments have extended the filing deadline to the end of the assessment year.

Conclusion:
The Tribunal concluded that the delay in filing Form 67 should not prevent the assessee from claiming FTC. The Assessing Officer was directed to decide the claim for FTC on merits after accepting Form 67 and other related documents. The appeal was allowed for statistical purposes, ensuring the assessee is provided with an adequate opportunity to be heard.

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