TaxTMI 
TaxTMI 
2023 (1) TMI 1282
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....ircumstances of the case, the assessee be allowed relief claimed u/s 90. 5. For that the appellant craves leave to add, alter or withdraw any ground(s) of appeal on or before hearing of the appeal. 2. The brief facts of the case are that the assessee filed return of income n 13.07.2019 claiming relief of Rs. 4,98,221/- under section 90 of the Act but during the course of processing of return under section 143(1) of the Act, Form No. 67 was not filed by the assessee which was filed on 02.04.2021 which is beyond the due date as per under rule 128(8) & (9)9(1) of the Act. Therefore, while processing the return, the relief was not allowed. 3. Aggrieved from the order of the CPC, the assessee filed an appeal before CIT(A). The CIT(A) observed that as per Rules 128(8) and 128(9) of the Income Tax Rules, 1962 (hereinafter called 'the Rule'), relief under section 90 of the Act cannot be allowed to the assessee as Form No. 67 was filed beyond the due date as prescribed under Rule 128(9) of the Rules which is end of the Assessment Year 1919-20. The CIT(A) also considered the written submissions and case laws fled before him and dismissed the appeal of the assessee. 4. Aggri....
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....tional tax of Rs. 28,431/- is amounting to double taxation. In our opinion, the plea of the assessee is justified. The assessee has filed the copy of Form No. 67 before Ld. CIT(A). He ought to have given direction to give credit for foreign tax which has been paid as per Form 67." 5. Further, we note that on identical issue, This Tribunal in the case of Ms. Brinda Ramakrishna v. ITO [2022] 135 taxmann.com 358/193 ITD 840, (Bang. - Trib.) held that (i) Rule 128(9) of the Rules does not provide for disallowance of FTC in case of delay in filing Form No. 67; (ii) filing of Form No. 67 is not mandatory but a directory requirement and (iii) DTAA overrides the provisions of the Act and the Rules cannot be contrary to the Act. Therefore, non-furnishing of Form No. 67 before the due date u/s 139(1) of the Act is not fatal to the claim for FTC. The findings of this Tribunal are reproduced below: '2. The Assessee is an individual and during the previous year relevant to AY 2018-19 an ordinary resident in India. The Assessee worked with Ernst & Young Australia from 20-11-2017 till 16-5- 2019. Since her global income was taxable in India, the Assessee offered to tax salar....
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....r before the due date specified for furnishing the return of income under sub-section (1) of section 139, in the manner specified for furnishing such return of income." 4. The Assessee claimed FTC of Rs. 4,73,779/- u/s. 90 of the Act read with Article 24 of India Australia tax treaty ("DTAA") in a revised return of income filed on 31-8-2018. The Assessee had not filed the Form 67 before filing the return of income. On realising the same, the Assessee filed Form 67 in support of claim of foreign tax credit on 18-4-2020. The revised return of income was processed by Centralized Processing Centre (CPC) electronically and intimation u/s 143(1) of the Act on 28-5-2020 was passed disallowing the claim of FTC. 5. The Assessee filed a rectification application before the AO on 15-6-2020 & 25-2-2021 and submitted that credit for FTC as claimed in the return should be given. In the rectification order dated 10-3-2021, the AO upheld the action on the ground that the Assessee has failed to furnish Form 67 on or before the due date of furnishing the return of income as prescribed u/s 139(1) of the Act which is mandatory according to rule 128(9) of the Rules. 6. On app....
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....s 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;" 9. It was 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 therefore a procedural provision and not a mandatory provision. 10. It was further submitted that rule 128(9) provides that Form 67 should be filed on or before the due date of filing the return of income as prescribed u/s 139(1) of the Act. However, the 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 u/s 90 of the Act would be denied....
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.... 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 was placed on the following cases: CIT v. Axis Computers (India) (P.) Ltd. [2009] 178 Taxman 143 (Delhi) PCIT, Kanpur v. Surya Merchants Ltd. [2016] 72 taxmann.com 16 (Allahabad) CIT, Central Circle v. American Data Solutions India (P.) Ltd [2014] 45 taxmann.com 379 (Karnataka) CIT-II v. Mantec Consultants (P.) Ltd. [2009] 178 Taxman 429 (Delhi) CIT v. ACE Multitaxes Systems (P.) Ltd [2009] 317 ITR 207 (Karnataka). 13. It was 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. Reliance in this regard is placed on the following cases and circulars: Union of India v. Azadi Bachao Andolan [2003] 263 ITR 706 (SC) CIT v. Eli Lily & Co. (India) (P.) Lt....