TaxTMI 
TaxTMI 
2025 (6) TMI 1376
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....n the premise that Form 67 in support of claim of FTC was filed beyond the due date of filing of the Return of Income under Section 139(1) of the Act. It is prayed that the position taken by the Ld. ADDL/JCIT(A) in her Order is contrary to the position taken by the Ld. Commissioner of Income-tax (Appeals) in Appellant's own case in AY 2019-20 (i.e. in the subsequent year) and this fact was also brought to the notice of the Ld. ADDL/JCIT(A) as can been seen from Page 3 of the Order of the Ld. ADDL/JCIT(A). It is also prayed that the Order of the Ld. ADDL/JCIT(A) is contrary to the following Judicial Pronouncements relied upon during the Appellate Proceedings before the Ld. ADDL/JCIT(A): • Decision of the Hon'ble High Court in the case of Duraiswamy Kumaraswamy Vs. The Principal Commissioner of Income Tax • Order of the Hon'ble ITAT in the case of Mr. Sanjay Patil vs. The Assessing Officer, Circle-3(2), Surat [ITA No. 189/SRT/2021] (Order in the case of another employee of the employer of the Appellant) • Order of Hon'ble ITAT in case of Mr. Nitin Prabhakar Dixit vs. DCIT, Panvel [ITA 798/PUN/2022] â€....
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.... the Act. It is prayed that the appellant has filed Form 67 on 15 March 2019 before filing a Revised Return of income on 20 March 2019 as stated in the beginning of para 7.4 of the Order of the Ld. ADDL/JCIT(A) and the due date to file the Revised Return of income for the year under appeal was 31 March 2019. Ground No.4: Non-grant of FTC is not a permissible adjustment/ no adjustment of a debatable issue can be made in the Intimation under Section 143(1) of the Act. On the facts and circumstances of the case and in law, the Ld. ADDL/JCIT(A) ought to have held that the non-grant of FTC of Rs. 8,15,869/- is not a permissible adjustment under Section 143(1) of the Act as no such adjustment relating to debatable issues can be made in the Intimation under Section 143(1) of the Act. It is prayed that the Order of the Ld. ADDL/JCIT(A) is contrary to the following judicial precedents relied upon during the Appellate Proceedings before the Ld. ADDL/JCIT(A): • Order of the Hon'ble ITAT in the case of City Manager Association vs. DCIT, CPC Bengaluru, (ITA No.1345/Ahd/2019); • Order of Hon'ble ITAT in the case of Paris Elyse....
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....I.T. Rules. Therefore, the CPC has rightly disallowed the claim of FTC of the assessee. The learned DR has pointed out that, though there is delay in furnishing Form-67, however, the same was filed on 15/03/2019 before the CPC passed order u/s 143(1) of the Act, on 20th March, 2020. 5. We have considered the rival submission as well as perused the relevant material available on record. At the outset we note that the learned CIT (A) has recorded the relevant facts and rejected the claim of the assessee in Para 7.4 as under: "7.4. The Appellant claimed FTC of Rs. 815869/- u/s.91 of the Act in original return of income filed on 09-08-2018. The Appellant had filed the Form 67 also on 15-03- 2019. The Appellant also filed a Revised Return of income on 20/03/2019. However, it is pertinent to note that the due date of filing of Return of income was 31.08.2018. The Appellant 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. Therefore, the return of income was processed by Centralized Processing Centre (CPC) electronically and intimation u/s 143(....
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....clear that, one of the requirements of 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 Ramakrishna v. ITO [2022] 135 taxmann.com 358/193 ITD 840 (Bang. - Trib.). 7. It's a trite law that DTAA overrides the provisions of the Act and the Rules, as held by various High Courts, which has also been approved by Hon'ble Supreme Court in case of Engineering Analysis Centre of Excellence (P.) Ltd. v. CIT [2021] 125 taxmann.com 42/281 Taxman 19/432 ITR 471. 8. We accordingly, hold that FTC cannot be denied to the assessee. Assessee is directed to file the relevant details/evidences in support of its claim. We thus remand this issue back to the Ld.AO to consider the claim of assessee in accordance with law, based on the verification carried out in respect of the supporting documents filed by assessee." 6. T....
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....g the return of income as prescribed under Section 139(1) of the Act. The question thus arises as to whether where a substantial compliance has been made and Form 67 has been eventually filed albeit after the due date of filing of return of income under Section 139(1) of the Act, the denial of FTC would be justified. In this regard, the assessee contends that Rule 128 provides machinery for seeking relief and compliance thereof are the procedural formality which has been duly complied with, albeit with some delay. The provisions of sections 90, section 91 and DTAA does not provide for denial of exemption merely on account of delay in filing of certain forms/reports in contrast to other provisions of the Act such as 80AC, 801A(7), 10A(5) and 10B(5) where attendant conditions of compliance are mandatory. 9. In the factual backdrop, we notice that the Co-ordinate Bench of Tribunal in the case of Ms. Brinda Ramakrishna v. ITO [2022] 135 taxmann.com 358/193 ITD 840 (Bangalore - Trib.) in [ITA No.454/Bang/2021 order dated 17.11.2021] clearly held that filing of Form 67 is a directory requirement and having regard to the position that DTAA overrides the provisions of the Act and ....
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....cluding the case in Union of India v. Azadi Bachao Andolan [2003] 132 Taxman 373/263 ITR 706 etc. and reached a conclusion that since Rule 128(9) of the Rules does not provide for disallowance of FTC in the case of delay in filing Form 67 and such filing within the time allowed for filing the return of income under section 139(1) of the Act is only directory, since DTAA over rides the Act, and the Rules cannot be contrary to the Act. 8. We find from Article 25(2)(a) of the DTAA that where a resident of India derives income which, in accordance with the provisions of the convention, may be taxed in the United States, India shall allow as a deduction from the tax on the income of the resident an amount equal to the income tax paid, paid in the United States, whether directly or by deduction. In view of this provision over riding the provisions of the Act, according to us, rule 128(9) of the Rules has to be read down in conformity thereof. Rule 128(9) of the Rules cannot be read in isolation. Rules must be read in the context of the Act and the DTAA impacting the rights, liabilities and disabilities of the parties. 9. With this view of the matter, we are of the consi....