Foreign tax credit under DTAA: accepted in principle; AO must coordinate with CPC to grant credit if legal conditions are met.

Foreign tax credit under the Double Taxation Avoidance framework and the intimation recorded under Section 143(1) are central: the CPC recorded and accepted the foreign tax relief amount in the intimation, and there is no dispute on payment or claim. The operative prescription is that the Assessing Officer must re examine the file, coordinate with the CPC and ensure the accepted relief is credited to the taxpayer provided all statutory conditions for granting such relief are met. The direction permits credit in principle subject to compliance with applicable legal requirements.

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Issues: Whether the foreign tax of Rs. 1,43,214/- paid in the United States should be credited to the assessee in India in view of Section 90 of the Income-tax Act, 1961 and the intimation issued under Section 143(1) of the Income-tax Act, 1961.

Analysis: The Central Processing Centre (CPC) has recorded and accepted the amount of Rs. 1,43,214/- as 'total tax relief available in respect of the country where DTAA is applicable' in the computation column of the intimation under Section 143(1). There is no dispute between the parties about payment of foreign tax or the relief claimed; the issue is limited to the crediting of the accepted relief in the assessee's hands. The Tribunal directs that the Assessing Officer shall re-examine the matter, coordinate promptly with the CPC and ensure that the accepted relief is credited to the assessee if all legal parameters and conditions for granting such relief are satisfied.

Conclusion: The assessee's claim for credit of foreign tax amounting to Rs. 1,43,214/- is accepted in principle and the Assessing Officer is directed to coordinate with the CPC and provide the necessary credit in the assessee's hands subject to compliance with applicable legal conditions. The grounds of appeal are allowed for statistical purposes.

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