2024 (9) TMI 866 - AT - Income Tax

Tribunal Upholds Foreign Tax Credit Claim, Highlights Form 67 Directory Nature, Overturns CIT(A) Decision Favorably.

The Tribunal ruled in favor of the appellant, allowing the foreign tax credit claim by emphasizing the directory nature of Form 67 filing and the ... Disallowance of foreign tax credit - disregarding Form 67 filed by the appellant to claim the said credit as belated filed - Directory v/s mandatory obligation - HELD THAT:- We find that this issue has been raised before this Tribunal on multiple occasions and it has been consistently held that filing of Form 67 is directory in nature and therefore even if it is belatedly filed but is placed on record before the revenue authorities, that before passing of an order, if the facts are verifiable then the legitimate claim made by the assessee should be allowed. We find support from the decision of this Tribunal in the case of Bijender Singh [2024 (6) TMI 1397 - ITAT KOLKATA] and also Krishna Kumar Choudhury [2023 (7) TMI 5 - ITAT KOLKATA]. Respectfully following the consistently view taken by this Tribunal and on finding that the Form 67 has been filed with all necessary details, we therefore set aside the finding of Ld. CIT(A) and allow the grounds raised by the assessee claiming the alleged FTC and direct the AO to accept the Form 67 filed by the assessee and allow the alleged FTC in accordance with law. Assessee appeal allowed. Issues:1. Disallowance of foreign tax credit2. Adjustment made by CPC without opportunity of being heard3. Levying interest u/s 234B and 234CAnalysis:Issue 1: Disallowance of foreign tax creditThe appellant contested the disallowance of foreign tax credit amounting to INR 11,42,039 and argued that the Form 67 was filed to claim the credit. The Tribunal observed that the assessee, a resident, had income from both India and the USA, with tax deducted at source in the USA. The Form 67 was filed belatedly, but the Tribunal noted that previous decisions held that the filing of Form 67 is directory and if the facts are verifiable, the claim should be allowed. Citing precedents, the Tribunal set aside the CIT(A)'s decision and directed the AO to accept the Form 67 and allow the claimed foreign tax credit.Issue 2: Adjustment made by CPC without opportunity of being heardThe appellant raised concerns about an adjustment made by the Centralized Processing Center (CPC) under section 143(1) without providing an opportunity to be heard. However, since the main issue was related to the disallowance of foreign tax credit, the Tribunal decided to address only that issue with the assistance of the Departmental Representative and available records. No further discussion or ruling was provided on this particular issue.Issue 3: Levying interest u/s 234B and 234CThe appellant also challenged the levy of interest under sections 234B and 234C of the Income Tax Act, 1961. However, the Tribunal's judgment did not specifically address this issue in the detailed analysis provided. Therefore, it can be inferred that the Tribunal did not find merit in the appellant's argument regarding the levy of interest, as the judgment solely focused on allowing the foreign tax credit claimed by the assessee.In conclusion, the Tribunal allowed the appeal of the assessee concerning the disallowance of foreign tax credit, emphasizing the directory nature of Form 67 filing and the verifiability of facts. The judgment did not delve into the other issues raised by the appellant, indicating that the primary dispute was resolved in favor of the assessee regarding the foreign tax credit claim.