TaxTMI 
TaxTMI 
2025 (4) TMI 1255
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....ification order. 3. That the appellant craves leave to add, amend, alter or withdraw any ground of appeal before final hearing 7. Briefly the facts of the case are that the assessee is an individual and filed his income tax return for the A.Y. 2022-2/3 on 27.08.2022, declaring a total income of Rs. 49,37,172/-. This income included Rs. 49,35,911/- earned as professional income from Canada, on which taxes amounting to Rs. 10,32,088/- were paid in Canada. The assessee claimed relief for this foreign tax credit (FTC) under Section 90 of the Income Tax Act, 1961, by filing Form No. 67 on 27.08.2022, after the due date for filing the return under Section 139(1), which was 31.07.2022. The CPC, Bengaluru, processed the return under Section 143(1) on 26.10.2022 and disallowed the FTC claim of Rs. 10,32,088/-, citing non-compliance with Rule 128(9) of the Income Tax Rules, 1962, which requires Form No. 67 to be filed on or before the due date of filing the return. 8. Against the assessment order the assessee went in appeal before the Ld. CIT(A). The Ld. CIT(A), vide order dated 22.02.2024, upheld the AO's disallowance of the FTC claim. The CIT(A) observed that Rule 128(9) explicitly req....
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....'s filing of Form No. 67 on 27.08.2022, after the due date of 31.07.2022, violated the explicit condition of the rule. The DR contended that judicial precedents cited by the assessee were not binding as they were from non-jurisdictional tribunals and lacked a definitive ruling from the Supreme Court. The DR further argued that the DTAA does not override procedural requirements under domestic law, and the assessee's failure to comply with Rule 128(9) justified the disallowance. The amended Rule 128(9), effective post the relevant period, was stated to be inapplicable to A.Y. 2022-23. 12. We have heard the rival contention of both the parties and perused he material available on the record. We find merit in the assessee's appeal. The core issue is whether the delay in filing Form No. 67 beyond the due date under Section 139(1) warrants the denial of FTC under Section 90. We observe that Section 90, in conjunction with the India-Canada DTAA, confers a substantive right to claim FTC for taxes paid abroad, subject to conditions prescribed under the Income Tax Rules. Rule 128(9), as applicable for A.Y. 2022-23, required Form No. 67 to be filed by the due date of the return under Section....
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....aharashtra v. G.M.Knitting Industries (P) Limited in Civil Appeal Nos.10782 of 2013 and 4048 of 2014 dated 24.06.2015, wherein it was held that Form 3AA is required to be filed along 11. The law laid down by the Hon'ble Apex Court in Commissioner of Income-Tax, Maharashtra v. G.M.Knitting Industries (P) Limited in Civil Appeal Nos.10782 of 2013 and 4048 of 2014 dated 24.06.2015, which was referred above, would be squarely applicable to the present case. In the present case, the returns were filed without FTC. However, the same was filed before the passing of the final assessment order. The filing of FTC in terms of the Rule 128 is only directory in nature. The rule is only for the implementation of the provisions of the Act and it will always be directory in nature. This is what the Hon'ble Supreme Court had held in the above cases when the returns were filed without furnishing Form 3AA and the same can be filed the subsequent to the passing of assessment order. 12. Further, in the present case, the intimation under Section 143(1) was issued on 26.03.2021, but the FTC was filed on 02.02.2021. Thus, the respondent is supposed to have provided the due credit to the FTC of....
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....Rule 128 for claiming FTC is that Form 67 is to be submitted by assessee before filing of the returns. In our view, this requirement cannot be treated as mandatory, rather it is directory in nature. This is because, Rule 128(9) does not provide for disallowance of FTC in case of delay in filing Form No.67. This view is fortified by the decision of coordinate bench of this Tribunal in case of Ms.Brinda Kumar Krishna vs. ITO in ITA no.454/Bang/2021 by order dated 17/11/2021". A Co-ordinate Bench of this Tribunal in the cases of Shridhar Madhav Diwan vs. DCIT in ITA No. 102/Hyd/2023, dated 24/05/2023 and Purushothama Reddy Vankireddy vs. ADIT in ITA No. 526/Hyd/2022, dated 05/12/2022, followed the same and held the issue in favour of the assessee. These decisions are applicable to the facts of the case and while respectfully following the said view, we hold the issue in favour of assessee." Respectfully following the said decision of the Co-ordinate Bench of the Tribunal, we deny the contentions of learned DR and while rejecting the plea taken by the Revenue, dismiss the grounds raised. 12.3 Further, I may also refer to the decision of Coordinate Bench in case of CES Limited Vs. ....
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....angalore - Trib.), which relates to the matter of delayed filing of Form 67, under Rule 128, in the matter of claim of FTC. On the facts of the case it was held that one of the requirements of Rule 128 for claiming FTC is that Form 67 is to be submitted by assessee before due date prescribed u/s 139(1) of the Act, but this requirement cannot be treated as mandatory, rather it is directory in nature, because Rule 128(9) does not provide for disallowance of FTC in case of delay in filing Form 67. Similar view has been taken in the case of Ms. Brinda RamaKrishna v. ITO(2022 (2) TMI 752- ITAT/[2022] 135 taxmann.com 358/193 ITD 840 (Bangalore - Trib.) Bangalore, for the purpose of Form 67 rwr 128 relating to FTC. 10.4 We also consider the decision of the ITAT, Ahmedabad Bench, in the case of Income-tax Officer (Exemptions) v. Ramji Mandir Religious and Charitable Trust [2024] 158 taxmann.com 114/205 ITD 150 (Ahmedabad - Trib.)(Ahmedabad), where in the matter of filing of Form 10/10B which is required to be furnished before due date u/s 139(1) of the Act, the tribunal held the same to be merely directory in nature and opined that the same cannot be so fatal so as to deny exemption u/s ....