TaxTMI 
TaxTMI 
TaxTMI 
2024 (2) TMI 159
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....ssee filed his return of income [for brevity 'ITR'] belatedly u/s 139(4) of the Act on 28/02/2020 by offering to tax his global income of Rs.58,48,036/- of which Rs.45,58,748/- was from United State of America Company [for brevity 'USA'] which suffered tax in USA @24.37%. Since such USA salary is again offered to tax in India, the resident assessee filed Form No 67 on even date claiming Foreign Tax Credit Rs.11,11,174/- [for brevity 'FTC'] in terms of section 90/90A of the Act r.w. INDO-USA Double Tax Avoidance Agreement entered with USA [for brevity 'DTAA']. The Ld. CPC by its order of intimation dt. 25/02/2021, however denied the aforestated claim of FTC to the assessee for a solitary reason of not filing FTC claim Form No 67 accompanying certificates, statements etc., within the time limit of filing ITR prescribed u/s 139(1) of the Act as specified u/r 128(9) of Income Tax Rules, 1962 [for brevity 'IT-Rules'] which was expired on 31/08/2019. 3. Being aggrieved by the order of intimation processed u/s 143(1) of the Act, the assessee instituted an appeal before Ld. first appellate authority [for brevity 'FAA'], who by impugned order confirmed the action of the Ld. CPC, and thus d....
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....ied upon by rival parties and duly considered facts of the case in light of settled legal position, which are forewarned to parties present. 7. We note that, neither party to the present litigation have dispute over the entitlement of FTC to the appellant or correctness of amount of FTC claimed. The solitary dispute in the instant case revolves around denial of FTC credit on the ground of delayed filing of Form No. 67 & accompanying certificates/statement in violation s/r (9) of rule 128 of IT Rules, 1962. To put it straight, the only question in the extant case arisen as to 'whether belated compliance for FTC made after the expiry of time limit prescribed for filing ITR u/s 139(1) of the Act is allowable?' 8. Upon visiting enabling provisions of the statute, we note that; 8.1 Sub-section(1) of section 90 of the Act, inter alia, empowers the Central Government of India [for brevity 'GOI'] to enter into a DTAA with other countries for avoidance of double taxation and for granting relief in respect of income on which tax has been paid or income tax is chargeable both in India and the foreign country. Accordingly invoking the power conferred u/s 295(2)(ha) of the Act Central Board....
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.....' 9.2 Insofar as superseding of provisions of DTAA over the provisions of the Act and IT Rules, 1963 are concerned, the article 26 comes into play which provides for non-discrimination by stating that, nationals of a Contracting State who are residents of one or both of the Contracting States, shall not be subjected to any taxation or any requirement connected therewith in the other Contracting State which is other or more burdensome than the taxation and connected requirements to which nationals that other State in the same circumstances are or may be subjected. Thus, this provision nowhere undermines right of GOI in prescribing other or addition burdensome requirements either under the Act or rules but washouts the possibilities of discriminating treatment if any. 10. A careful reading & conjunct consideration of provisions of section 90/90A of the Act and provisions of DTAA, prima-facie it appears us that, the provisions of DTAA in general does not prevail over the provisions of Act and rules made thereunder. Section 90/90A of the Act does also not provide so. However, wherever the DTAA has provided the taxation of a particular category of income at certain rates, then charg....
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.... resident assessee for the amount of any foreign tax paid/deducted in a country or specified territory outside India, for which s/r (9) prescribed a time limit for furnishing a requisite form alongwith certificates & statements etc., as specified under s/r (8) thereof. We note that, both these s/r (1) as well s/r (9) created a mandate using the word 'shall', therefore here arises a question of its effective operation, thus interpretation. Whether a particular provision in a statute is mandatory or directory has to be construed from the scheme and object of the provisions. It is well settled law that the rules are sub-ordinate piece of legislation, enacted to facilitate to carry out objective of main legislation i.e. provisions of Act. The very purpose and object of insertion of rule 128 to statute is to allow FTC and it is so subscribed by s/r (1) therefore, mandate of s/r (9) is sub-servient to s/r (1). As the river cannot rise higher to its source hence s/r (9) it is to be read harmoniously so as not to defeat the purpose of s/r (1) enabling FTC to resident assessee to in terms of article 25 of DTAA. It is apt to mention here that the very insertion of rule 128 is stemmed out of ....