TaxTMI 
TaxTMI 
2025 (8) TMI 137
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....so not claimed Foreign Tax Credit (FTC). Subsequently, the assessee filed her revised return of income u/s 139(5) on 23/02/2021 wherein the assessee declared the salary income earned in USA and also claimed FTC of Rs. 4,43,166/- u/s 90 of the I.T. Act, 1961. The assessee also filed Form-67 along with a revised return of income. The CPC processed the revised return of income u/s 143(1) but did not grant the FTC to the assessee. The assessee filed a rectification petition for grant of FTC which was rejected by the CPC. Against this, the assessee has filed an appeal before the learned CIT (A) but could not succeed. Thus, the learned AR has submitted that the denial of FTC only on the ground of filing of Form-67 with a delay of 44 days is not justified and highly arbitrary. The learned Counsel for the assessee has relied upon various decisions on this point as under: i) ITAT Hyderabad Benches in the case of CES Ltd vs., Dy.CIT in ITA No.474/Hyd/2023 dated 22.03.2024 ii) ITAT Kolkata Benches in the case of Vivek Tiwari vs. ACIT in ITA No.163/KOL/2025 dated 16/06/2025 iii) Hon'ble Madras High Court in the case of Duraiswamy Kumaraswamy vs. PCIT reported in ....
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....020 was passed disallowing the claim of FTC. The Appellant has not filed Form 67 before the time allowed under section 139(5) of the Act. The word "shall" has been used in the rule 128(9) therefore the provisions of rule 128 are mandatory in nature and not directory. From the above, it is apparent that unless there is an order condoning the delay in filing Form No. 67 by the PCIT under Section 119(2)(b), such Form No.67 can't be taken into consideration and the relief u/s. 91 cannot be allowed by the Appellate Authority even if other conditions are fulfilled. ln view of the above, the appellant is not eligible for relief under section 91 and the Ground No. 1 is dismissed." 6. Thus, it is clear that the assessee has filed Form 67 on 15/03/2019 along with the revised return of income. However, the CPC while processing the return of income u/s 143(1) of the Act on 20/03/2020, has disallowed the claim of FTC debit. Form-67 was available before the CPC at the time of processing the return. An identical issue has been considered by this Tribunal in a series of decisions relied upon by the assessee and in the latest decision dated 7/3/2025 in case of Shri Suresh Kumar Vobbili....
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....as held that the provisions of DTAA overrides the provisions of the Act and the Rule as held by the Hon'ble Supreme Court in the case of Engineering Analysis Centre of Excellence vs. CIT 432 ITR 471. Similar view has been taken by the Delhi Bench of the Tribunal in the case of NICDC Neemrana Solar Power Ltd. v. Deputy Commissioner of Income-tax (Supra) in Para 8 & 9 as under: "8. In the case of Sumedha Arora v. Income -Tax Officer [2023] 154 taxmann.com 535 (Delhi - Trib.) the Co-ordinate bench held as under: "7. As stated, section 90 of the Act provides that Government of India can enter into agreement with other countries for granting relief in respect of income on which taxes are paid in the country outside India and such income is also taxable in India. Article 24 of India-Italy DTAA provides for credit towards foreign taxes paid for earning income arising from foreign soil. Section 90(2) of the Act provides that the provisions of this Act shall apply to the extent they are more beneficial to the assessee. Article 24(3)(a) seeks to provide for method of elimination of Double Tax and the amount of Italian tax payable under the laws of Italy in respect of in....
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....e cannot be contrary to the Act, the assessee is fully entitled to the FTC. The Tribunal also observed that the issue of allowability of FTC is not a debatable issue and only one view is possible and thus seeking rectification under Section 154 could be resorted by the assessee. Similar view has been taken in 42 Hertz Software India (P.) Ltd. v. Asstt. CIT [2022] 139 taxmann.com 448 (Bangalore - Trib.) /[ITA No.29/Bang/ 2021 order dated 7th March, 2022). A reference is made to another Co-ordinate Bench decision in the case of Vinodkumar Lakshmipathi v. CIT (Appeals) NFAC [2022] 145 taxmann.com 235 (Bangalore - Trib.), [ITA No.680/Bang/2022 order dated 06.09.2022]; Sonakshi Sinha v. CIT (Appeals) [2022] 142 taxmann.com 414/197 ITD 263 (Mumbai - Trib.)/[ITA no.1704/Mum/2022 order dated 20th September, 2022] and host of other judgments referred to and relied upon." 7. The Jabalpur Bench of the Tribunal in case of Gaurav Singh v. Income-tax Officer (Supra) has also reiterated this view. We further note that the Coordinate Bench (Hyderabad) of the Tribunal in the case of Purushothama Reddy Vankireddy v. ADIT (International Taxation) reported in [2023] 147 taxmann.com 398 (Hyder....
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....idered opinion that the decisions relied upon by the assessee are applicable to the facts of the case on hand while respectfully following the same, we allow the appeal, and direct the Learned Assessing Officer to verify the details of the foreign tax paid by the assessee on the earnings at foreign source and take a view inconformity with the established law discussed above." 8. The Hon'ble Madras High Court in the case of Duraiswamy Kumaraswamy v. Principal Commissioner of Income-tax, reported in 460 ITR 615 has also held in para 11 to 13 as under: "11. The law laid down by the Hon'ble Apex Court in G.M.Knitting Industries (P) Ltd. (supra), 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 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 th....
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....tentions, perused the material available on record and gone through the orders of the authorities below. There is no dispute with regard to the fact that the assessee has claimed credit for Foreign Tax Credit in the return of income filed on 30/07/2022 which is on or before the due date specified u/s 139(1) of the Act. The Assessing Officer denied the credit for Foreign Tax Credit for non-filing of Form No.67 on or before the due date specified u/s 139(1) of the Act by considering rule 128(9) of the I.T. Rules, 1962 which was prevailing in the statute before the amendment by the I.T. Act (27th amendment) Rule 1962 and the same has been notified by the CBDT on 18/08/2022. Further, as per the amended rule 128(9) w.e.f. 1/4/2022 which is applicable from A.Y 2022-23, the statement in Form 67 shall be furnished on or before the end of the A.Y relevant to previous year in which the income referred to in Sub-Rule (1) has been offered to tax or assessed to tax in India and the return for such A.Y has been furnished within the time specified time sin subsection (1) or sub section (4) of section 139 of the Act. The amended rule is applicable for the A.Y 2022-23. In the present case, the disp....