Donation deduction and foreign tax credit claim allowed despite belated Form No. 67; assessment revised in taxpayer's favour

Deduction for donations under Chapter VIA was allowed after receipts on record established eligibility, and deduction of Rs. 45,148 was directed to be granted. A claim for foreign tax credit was allowed despite belated filing of Form No. 67 because the taxpayer produced evidence of foreign tax payment and taxability of the income; the belated filing during assessment was treated as a procedural lapse and did not bar credit of Rs. 99,187. The assessing officer is directed to revise the assessment accordingly and grant both reliefs in the taxpayer's favour.

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Issues: (i) Whether the assessee is entitled to deduction of Rs. 45,148/- for donations under Chapter VIA of the Income-tax Act, 1961; (ii) Whether the assessee is entitled to credit of foreign taxes of Rs. 99,187/- under Section 91 of the Income-tax Act, 1961 notwithstanding that Form No. 67 was filed after the due date of filing the return.

Issue (i): Entitlement to deduction of Rs. 45,148/- under Chapter VIA for donations.

Analysis: The assessee produced donation receipts which were on record with the Assessing Officer and supported the claim under Chapter VIA. The record was examined to verify eligibility of the donations for deduction under the relevant provisions of Chapter VIA.

Conclusion: Deduction of Rs. 45,148/- is allowed in favour of the assessee.

Issue (ii): Entitlement to foreign tax credit of Rs. 99,187/- under Section 91 where Form No. 67 was filed belatedly.

Analysis: The claim for credit under Section 91 relates to foreign tax paid on income taxed in the hands of the assessee. Form No. 67 was filed during the course of assessment proceedings after the due date for filing the return but prior to rectification being adjudicated. The late filing was treated as a procedural irregularity and the materials on record establishing foreign tax payment were considered to determine entitlement to credit under Section 91.

Conclusion: Credit for foreign taxes amounting to Rs. 99,187/- is to be granted in favour of the assessee.

Final Conclusion: The appeal is allowed and the Assessing Officer is directed to allow the donation deduction and grant the foreign tax credit, producing a favourable revision of the assessment for the assessee.

Ratio Decidendi: A belated filing of Form No. 67 that is made in the course of assessment proceedings constitutes a procedural lapse and does not bar grant of foreign tax credit under Section 91 where the taxpayer establishes that the foreign tax was paid and the income has been taxed in the hands of the assessee.

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