TaxTMI 
TaxTMI 
2022 (9) TMI 926
X X X X Extracts X X X X
X X X X Extracts X X X X
....7 was filed on-line on 01.01.2020 and claimed relief under section 90 of the Act of Rs. 1,67,300/-. However, the said claim of the assessee was denied by the AO. Aggrieved by the order of the AO, the assessee preferred appeal before the ld. CIT (A). The ld. CIT (A) after considering the case of the assessee, dismissed the appeal filed by the assessee by upholding the disallowance made by the AO under section 90 of the Act. Being aggrieved by the order of the ld. CIT (A), now the assessee is in appeal before us on the ground mentioned as under :- " The ld. CIT (Appeals) erred in law and on facts in confirming the disallowance of relief of foreign tax credit of Rs. 1,67,300/- under section 90 of the Income Tax Act, 1961." 3. The solitary ground raised by the assessee relates to challenging the order of ld. CIT (A) in confirming the disallowance of relief of foreign tax claim of Rs. 1,67,300/- under section 90 of the IT Act, 1961. The ld. A/R appeared on behalf of the assessee has reiterated the same arguments as was raised by him before the lower authorities and also filed his written submissions. The same are reproduced below :- " It is submitted that the ld. AO....
X X X X Extracts X X X X
X X X X Extracts X X X X
....C is assessee's vested right as per Article 22(2) of the DTAA read with section 90 and same cannot be disallowed for non-compliance of procedural requirement that is prescribed in the Rules. The section 295(1) of the Act gives power to the CBDT to prescribe Rules for various purposes. Section 295(2)(ha) gives power to the Board to issue Rules for FTC. The relevant extract is as follow:-- '(2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters:-- .......................... (ha) the procedure for granting of relief or deduction, as the case may be, of any income-tax paid in any country or specified territory outside India, under section 90 or section 90A or section 91, against the income-tax payable under this Act;' Rule 128 is procedural provision- It is submitted that the Board has power to prescribe procedure to granting FTC. However, the Board does not have power to prescribe a condition or provide for disallowance of FTC. The procedure prescribed in Rule 128 should therefore be interpreted in this context. Rule 128 is theref....
X X X X Extracts X X X X
X X X X Extracts X X X X
....narily be construed as mandatory; the procedural law is always subservient to and is in aid to justice. It is submitted that filing of Form 67 as per the provisions of section 90 read with Rule 128(9) is a procedural law and should not control the claim of FTC. It is further submitted that even in the context of 32AB, 80HHC(4), 80-IA(7), 10A(5) etc, wherein there is specific provision for disallowance of deduction/exemption if audit report is not filed along with the return, various High Courts have taken a view that filing of audit report is directory and not mandatory. Reliance in this regard is placed on the following cases :-- 1. CIT vs. LM Singhvi 289 ITR 425 (Raj)-Sec 32AB(5)(Case PB-13) 2. CIT vs Godha Chemicals 220 Taxman 31 (Raj)-Sec 80HHC(4) (Case PB-20 ) DTAA overrides the Act- It is submitted that as per the provisions of section 90(2) of the Act, where the Central Government of India has entered into a DTAA, the provisions of the Act would apply to the extent they are more beneficial to a taxpayer. Therefore, the provisions of DTAA override the provisions of the Act, to the extent they are beneficial to the assessee. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ecision of Coordinate Bench of ITAT Visakhapatnam in ITA No. 269/Viz/2021 in the case of Muralikrishna Vaddi vs. ACIT/DCIT. 5. We have heard the ld. Counsels of both the parties. We have also perused the material placed on record and also judgments cited by the respective parties. Under this ground of appeal, the assessee has filed Form 67 for claiming relief under section 90 of the IT Act. The said form was filed by the assessee on-line as on 27.04.2021 and the Income Tax Return was filed as on 25.11.2020 claiming relief under section 90 of Rs. 1,67,300/-. It is an undisputed fact that the assessee has got salary from his employer in Finland and due tax has been deducted by the employer. As per Article 15 of Double Taxation Avoidance Agreement (DTAA) with country Finland, the tax payable by assessee in that country is eligible for relief under section 90 of the Income Tax Act, 1961 to the assessee. The said relief was denied by the revenue authorities on the ground that the return for the year under consideration was filed by the assessee on 25.11.2020. However, the form 67 was filed on 27.04.2021 and not along with the return of income filed on 25.11.2020. Since according to r....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rticular, and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters :- ..................... (ha) the procedure for granting of relief or deduction, as the case may be, of any income-tax paid in any country or specified territory outside India, under section 90 or section 90A or section 91, against the income-tax payable under this Act;" Thus, in this way the Board has power to prescribe procedure for granting FTC. Therefore, in my view the procedure prescribed in Rule 128 should be interpreted in this context. Therefore, Rule 128 is a procedural provision and not a mandatory provision. The said rule 128(9) provides that Form 67 should be filed on or before the due date of filing the return of income as prescribed under section 139(1) of the Act. However, the said Rule nowhere provides that if the said Form 67 is not filed within the above stated time frame, the relief as sought by the assessee under section 90 of the Act would be denied. In case the intention of the Act or Rule was to deny the FTC, then in that eventuality either the Act or the Rules would have specifically provided that the ....