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2025 (10) TMI 531
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....pective of the fact that the same was duly claimed in the income tax return as per provisions of the Income Tax Act. 2. That on facts as well as on law, the Learned Commissioner of income Tax (Appeals), National Faceless Appeal Centre (NFAC) has erred in confirming the order under section 154 read with section 143(1) without taking into consideration the fact that Form 67 in relation to Foreign Tax Credit (FTC) was duly filed before the last date for filing of the income tax return. 3. That on facts as well as on law, the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC) has erred in confirming the levy of interest under section 234A amounting to Rs. 38,394. 4. That on facts as well as on law, the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC) has erred in confirming the levy of interest under section 234B amounting to Rs. 1,72,773. 5. That on facts as well as on law, the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC) has erred in confirming the levy of interest under section 234C amounting to Rs. 32,317. 6. That your appellant ....
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....n of section 90 read with Rule128(9) is a procedural law and shall not control the claim of foreign tax credit. In view of above, your Honour may kindly give necessary direction to the Learned Assessing Officer in this regard so that the appellant can get the benefit towards the claim for foreign tax paid in Kenya against his salary income in determining his final tax liability. 2. Impugned levying interest under section 234A amounting to Rs. 38,394. The Learned Deputy Director of Income Tax, CPC, Bengaluru, has passed the order under section 154 in ignoring the foreign tax credit amounting to Rs 6,39,970 resulting into a tax on unjustified denial of foreign tax credit in the rectification under section 154. The CPC, Bengaluru had wrongly calculated tax on its entire tax liability which is unsustainable and bad in law. As a consequence, it has resulted into impugned levy of interest under section 234A amounting to Rs. 38,394 which is consequential in nature. In view of above, the impugned levy of interest under section 234A amounting to Rs. 38,394 is liable to be summarily rejected. 3. Impugned levying interest under section 234B amounti....
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....ements of Rule 128 for claiming FTC is prescribed by Rule 128(8) & (9) of the Rules and the same reads as under:- "(8) Credit of any foreign tax shall be allowed on furnishing the following documents by the assessee, namely:- (i) a statement of income from the country or specified territory outside India offered for tax for the previous year and of foreign tax deducted or paid on such income in Form No.67 and verified in the manner specified therein; (ii) certificate or statement specifying the nature of income and the amount of tax deducted therefrom or paid by the assessee,- (a) from the tax authority of the country or the specified territory outside India; Or (b) from the person responsible for deduction of such tax; or (c) signed by the assessee: Provided that the statement furnished by the assessee in clause (c) shall be valid if it is accompanied by,-- (A) an acknowledgement of online payment or bank counter foil or challan for payment of tax where the payment has been made by the assessee; (B) proof of deduction where the tax has been deducted. statement in Form No.67 referred to in cla....
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....rsight and pleaded that mistake may be considered as technical mistake and there was a reasonable cause. We find no merit in the submissions made by the assessee's representative that the above reason mentioned by the assessee in its written submissions is reasonable. The assessee has realized the filing of Form 67 only after the scrutiny proceedings were initiated by the AO. We also note that Form 67 has been filed with a delay of more than two years without any valid and reasonable cause. We also extract herein below Rule 128(9) of the IT Rules, 1962 for reference: "128 (9) The statement in Form No.67 referred to in clause (i) of sub-rule (8) and the certificate or the statement referred to in clause (ii) of sub-rule (8) shall be furnished on or before the due date specified for furnishing the return of income under subsection (1) of section 139, in the manner specified for furnishing such return of income." 6. From the plain reading of Rule 128(9) of the IT Rules, it is clear that the statement in Form-67 shall be furnished on or before the due date specified for furnishing the return of income under sub-section(1) of section 139 of the Act. Therefore, we are of the....
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.... time of processing of the return of income carried out u/s 143(1) of the Act on 25.12.2019 as well as at the time of completion of assessment under section 143(3) of the Act on 27.12.2019 and, therefore, the credit for Foreign Taxes paid in the USA should have been allowed. Reliance was placed by the Ld. AR on the case of Rahul Anand vs. ADIT (CPC, Bengaluru) in ITA No. 1497/KOL/2024 order dated 06.12.2024, a copy of which was filed along with the case law paper book in which reliance has also been placed upon several other judicial pronouncements. The Ld. DR submitted that the assessee had filed multiple returns which was countered by the Ld. DR by stating that the return was revised but in the computation sheet, different figure has been adopted by the Ld. AO. Our attention was drawn to the computation sheet in which the figure of Rs. 2,49,43,470/- was adopted while in the assessment order u/s 143(3) of the Act, the total income is assessed at Rs. 2,23,86,630/- which is the same as the income as per the return of income. Our attention was further drawn to column 14 of the computation sheet in which total income after deduction is shown at Rs. 2,49,43,470/- while in column 16 the....
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....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 country outside India and such income is also taxable in India. Article 25 of DTAA between India and USA provides for credit for foreign taxes. Article 25(2)(a) is relevant in the present context and the same is extracted below: "Where a resident of India derives income which, in accordance with the provisions of this Convention, may be taxed in the United States, India shall allow as a deduction from the tax on the income of that resident an amount equal to the income tax paid in the United States, whether directly or by deduction. Such deduction shall not, however, exceed that part of the income-tax (as computed before the deduction is given) which is attributable to the income which may be taxed in the United States." 9. Thus, Section 90 of the Act read with Article 25(2)(a) of the DTAA provides that tax paid in USA shall be allowed as a credit against the tax payable in India but limited to the proportion of Indian tax. Neither section 90 nor the DTAA provides that FTC shall be disallowed for non-compliance wit....
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....ce to the facts at hand as the effect of section 90(2) of the Income-tax Act, read with explanation 4 thereof, is to treat the DTAA provisions as the law that must be followed by Indian courts, notwithstanding what may be contained in the Income-tax Act to the contrary, unless more beneficial to the assessee. 13. We have gone through the decisions of the coordinate Benches and concur with their findings in this regard that filing of Form No. 67 is directory and not mandatory and the credit for foreign taxes paid cannot be denied merely on the delay in filing the Form No. 67. 14. We have also gone through the decision of the Hon'ble Madras High Court in the case of Duraiswamy Kumaraswamy us. PCIT (supra) and find that the facts are identical to the facts of the case of the assessee and the decision is squarely applicable to the facts of the case of the assessee. In that case, the petitioner was resident of India and had filed Indian ITR and claimed benefit of FTC u/s 90/91 of the Act r.w. Article 24 of the India-Kenya DTAA. During the year, he had income of both Kenya and India but while filing the Indian ITR for the impugned assessment year 2019-20, the Form N....
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.... reassessment by taking into consideration of the FTC filed by the petitioner on 02.02.2021. The respondent is directed to give due credit to the Kenya income of the petitioner and pass the final assessment order. Further, it is made clear that the impugned order is set wade only to the extent of disallowing of FTC clam made by the petitioner und hence, the first respondent is directed to consider only on the aspect of rejection of FTC clam within a period of 8 weeks from the date of receipt of copy of this order" 15. Respectfully following the order of the Hon'ble Madras High Court in the case of Duraiswamy Kumaraswamy vs. PCIT (supra) and concurring with the views held by the coordinate Benches of the Tribunal in the cases relied upon in the cases of Rahul Anand and Jaspal Singh Bindra (supra), we hold that merely because the assessee could not file Form No. 67 within the prescribed time limit as per the provisions of rule 128(9) of the Income-tax rules, 1962, as it stood during the year under consideration, will not preclude the assessee from claiming the benefit of the Foreign Tax Credit in respect of taxes paid outside India. Therefore, the claim of the assessee i....