TaxTMI 
TaxTMI 
2023 (8) TMI 808
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.... 3. Passing order under section 263 of Income tax Act with instruction to AO for fresh assessment for A.Y. 2017-18. 4. The appellant reserves, craves leave all these to Hon'ble Commissioner to add, alter, amend, delete, modify, vary, and/or rescind any of the facts/grounds hereafter, if necessary, in the interest of justice." 3. We have heard both the parties and have also gone through the order of the ld.Pr.CIT. 4. As transpires from the order of the Ld. PCIT, revisionary jurisdiction under section 263 of the Act was assumed by the ld. PCIT for the reason that he noted from the assessment record that though the assessee had belatedly filed requisite form for claiming foreign tax credit against foreign income returned i.e. form no.67, the AO had wrongly allowed foreign tax credit to the assessee, despite the Income Tax Rules, 1962 (hereinafter referred to as 'Rules') strictly requiring the furnishing of such form to be filed by due date of filing of return of income under section 139(1) of the Act. 5. The facts being that originally the assessee had disclosed total income of Rs. 36,43,040/- in which neither foreign income was disclosed nor any tax credit under....
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....nd the assessee had not cited any decision of the jurisdictional High Court and he further went to note and discuss in detail the requirement as per the Rule being mandatory and not directory, and accordingly noting this error in the assessment order, he issued show cause notice to the assessee. The contents of para 2 to 3 of the ld.Pr.CIT's order reveals the above facts as under: "2.1 On further examination of case records, it was noticed that the Assessing Officer had accepted the belated filing of Form No.67 as required to be filed under Rule 128 of the I.T. Rules inserted w.e.f. 01.04.2017. As per this Rule, the assessee was required to file the Form No.67 on or before the due date prescribed u/s. 139(1) of the Act. response to a query raised by the assessing officer, the assessee vide letter dated 22.11.2019 during the course of assessment proceedings submitted that filing of Form No.67 is a directory provision and not a mandatory provision and the breach of requirement of filing Form No.67 belatedly instead of filing the same by 30.09.2017 [due date u/s. 139(1)] was only a technical defect. The assessee has further submitted that therefore, the disallowance of the cl....
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....s to why the impugned amount of Rs. 28,52,306/- should not be disallowed on account of irregular tax credit claimed u/s. 90/91 of the I.T. Act and demand is raised for A.Y.2017-18. The said notice was duly served upon the assessee online on e-Portal and requested to furnish its reply through e- filing portal." 7. Though these contents do not reveal case law cited by the assessee to the AO during the assessment proceedings, the same finds mention in the written submission filed by the ld.counsel for the assessee before us as being M/s. Brinda Rama Krishna in ITA No.454/Bang/2021 order dated 17.11.2021. Clearly, the basis with the ld.Pr.CIT for forming prima facie view that there was an error in the order of the AO is grossly incorrect. As is evident from above primarily the reason with the Ld.PCIT for finding that the AO had wrongly allowed benefit of tax credit was that the decision of the ITAT cited by the assessee before the AO on identical issue and which found favour with the AO, was that by Single Member Bench; 'SMC' Bench, of ITAT and as per the Ld.PCIT the same therefore was not a binding precedent. 8. The Income Tax Appellate Tribunal is a quasi-judicial body const....
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....uction u/s. 80IA(7), 10A(5) etc. where Audit Report was not filed in time. Further, it is a matter of fact that the assessee has not filed Form No.67 on or before the due date of filing of return of income, as specified in Sub-Rule (9) of Rule 128 and therefore, as per sub-Rule (1) of Rule 128, he cannot be allowed the credit of foreign tax paid by him for the year under consideration." 10. Again we find that the ld.Pr.CIT himself is in error stating that only the decision of the apex court has binding precedent and no other court. It appears that the Ld.PCIT is totally unaware of the Rule of judicial precedence . Even otherwise We have gone through the order of the ITAT Bangalore Bench in the case of M/s. Brinda Rama Krishna and we find that decision rendered therein applies squarely to the facts of the present case. The finding of the ITAT in the said case at para 16 bring out the aforesaid facts clearly as under: "16. I have given a careful consideration to the rival submissions. I agree with the contentions put forth by the learned counsel for the Assessee and hold that (i) Rule 128(9) of the Rules does not provide for disallowance of FTC in case of delay in filing ....
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....n the order of the AO accepting the assessee's claim of foreign tax credit, even though form no. 67 was filed belatedly beyond date prescribed under section 139(1) of the Act, since it was allowed by the AO following the decision of the ITAT in the case of M/s. Brinda Rama Krishna (supra) and several other judgments have also affirmed the proposition of law laid down in the said decision. The AO by doing so, had taken a possible view on the matter and therefore his order cannot under any circumstances be said to be in error. 14. In view of the above, revisionary order passed by the ld.Pr.CIT under section 263 of the Act is set aside and the appeal of the assessee is allowed. 15. In the result, the appeal of the assessee is allowed. Order pronounced in the Court on 29^th March, 2023 at Ahmedabad. ============= Document 1 Sr. Appellant Respondent ITA No. ITAT A.Y. No. Date of Pronounc ement 1. Sanjay Patil, The Assessing 189/SRT/ SURAT BENCH, 2018-19 18-05-2022 Surat Officer, Circle- 2021 10 SURAT, Gujarat ㆠ3(2), Surat. 2. Shri Pradeep The Deputy ITA No. Lankapalli, Commissioner of 5....