2023 (10) TMI 255

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

...., dated 30/11/2022 arising out of the order passed U/s. 154 r.w.s 143(1) of the Income Tax Act, 1961 [the Act], dated 8/9/2021 for the AY 2019- 20. 2. Brief facts of the case are that the assessee being an individual Non-Resident Indian filed his return of income on 29/10/2019 admitting a total income of Rs. 3,01,43,390/-. Subsequently, the return was summarily processed by the CPC wherein the CPC disallowed the assessee's claim of relief U/s. 90 / 90A of the Act with regard to foreign tax credit. Accordingly an addition was made under the head income from other sources for Rs. 23,35,811/-. The assessee filed a rectification petition U/s. 154 of the Act. The Ld. AO cited the Income Tax Rules, 1962 [the Rules] disallowed the foreign tax c....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....y the assessee. 4. Before us, the Ld. Departmental Representative fully supported the order of the Ld. AO and pleaded that the assessee has not complied with the provisions of Rule 128(9) of the IT Rules, 1962 and therefore the denial of foreign tax credit by the Ld. AO be upheld. 5. Per contra, the Ld. AR vehemently objected to the denial of foreign tax credit by stating that as per section 295(1) of the Act which gives power to the CBDT to prescribe Rules for various purposes. Clause-(ha) of section 295(2) gives power to the CBDT to issue Rules for FTC [foreign tax credit]. The relevant extract is as follows: "Sec. 295(2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide f....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ect to this Rule, the FTC cannot be denied". Further, the Ld. AR also submitted that even though this Notification is effective from FY 2022-23, this can be applied retrospectively. The Ld. AR further also relied on the decision in the case of CIT (Central)-I vs. Vatika Township Privater Limited [2014] 367 ITR 466 (SC). The Ld. AR further submitted that as per Article-25 of the Double Taxation Avoidance Agreement [DTAA] between India and USA relief on Double Taxation should be provided on behalf of the resident to the foreign tax credit already paid by the assessee in the USA however, should not exceed that part of income tax which may be attributable to the income taxed in the USA. The Ld. AR further submitted that nowhere in Article-25....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ification. Further, there is also no express provision in the India and USA DTAA that the foreign tax credit shall be denied on failure of submission of statement in Form-67 within the due date prescribed U/s. 139(1) of the Act. Further, in the instant case, the assessee has filed Form-67 on or before the due date prescribed U/s. 139(4) of the Act and also before the filing of the return of income on 29/10/2019. Further, we also find that the Form-67 was filed before processing the return of income by the CPC U/s. 143(1) of the Act. We also find that the Ld. AO has also rejected the rectification petition filed by the assessee U/s. 154 of the Act citing the same reason that the assessee has not complied with the provisions of Rule 128(9) of....