Foreign tax credit under section 90 allowed when Form 67 filed before assessment completion

ITAT Mumbai allowed the appeal regarding foreign tax credit under section 90. The assessee claimed credit only in revised return and filed Form 67 after the original return's due date. Following coordinate bench precedents in Vidya Tukaram Desai and Sonkashi Sinha cases, the Tribunal held that foreign tax credit is allowable when Form 67 is filed before assessment completion. Since Form 67 was filed with revised return on 28.03.2019, before CPC processing on 11.06.2020, the matter was restored to AO for verification and consideration of the claim.

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Issues involved:
1. Denial of relief u/s. 90 of the Income-tax Act, 1961 vis-à-vis credit for Foreign Taxes paid of Rs. 3,33,695.
2. Levying of excessive interest u/s. 234B of the Income-tax Act, 1961.
3. Levying of excess interest u/s. 234C of the Income-tax Act, 1961.

Issue 1: Denial of relief u/s. 90 of the Income-tax Act, 1961 vis-à-vis credit for Foreign Taxes paid of Rs. 3,33,695:
The appellant contested the denial of relief under section 90 for the credit of foreign taxes paid, claiming that the denial was incorrect as the necessary documents were submitted along with the revised return of income. The appellant argued that the denial was not in accordance with the law and requested the relief to be granted. The appellant cited relevant case law to support their claim, emphasizing that the filing of Form No. 67 before the completion of assessment should be considered sufficient compliance. The Tribunal noted precedents where foreign tax credit claims were allowed when Form No. 67 was filed before the completion of assessment, and directed the Assessing Officer to verify specific details related to the income earned in Singapore and the taxes paid there, before allowing the foreign tax credit claim.

Issue 2: Levying of excessive interest u/s. 234B of the Income-tax Act, 1961:
The appellant challenged the levy of excessive interest under section 234B, arguing that the action of the Assessing Officer was incorrect and not in accordance with the law. The appellant requested the deletion of the excess interest and the re-computation of tax liability accordingly. The Tribunal directed the Assessing Officer to compute the interest liability under section 234B in accordance with the law.

Issue 3: Levying of excess interest u/s. 234C of the Income-tax Act, 1961:
The appellant disputed the levy of excess interest under section 234C, contending that the amount levied was higher than what was due. The appellant argued that no further interest should be levied beyond what was already computed and paid. The Tribunal directed the Assessing Officer to delete the excess interest levied under section 234C and to re-compute the tax liability accordingly.

Conclusion:
The Tribunal allowed the appeal of the assessee for statistical purposes, directing the Assessing Officer to consider the foreign tax credit claim and compute the interest liability as per the law. The matter was remanded to the Assessing Officer for verification and necessary actions.

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