TaxTMI 
TaxTMI 
2023 (4) TMI 1462
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....the Form 67 was uploaded late on 18.10.2021 but before the intimation under section 143(1) dated 24.12.2021 which makes the issue debatable and as such upholding the disallowance of the claim on a debatable issue is beyond the scope of Section 143(1) which makes the addition made arbitrary and unjustified. 3. That the Ld. Commissioner of Income Tax(Appeals) has erred in applying the sole decision of the Hon'ble Visakhapatnam which was against the assessee as against 3 decisions mentioned in his order of various Benches of Hon'ble ITAT which are in favour of the assessee in utter disregard of the settled position that in case of conflicting decisions, the view in favour of the assessee is to be applied. 4. That the appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed off. 5. That the order of the Ld. Commissioner of Income Tax is erroneous, arbitrary, opposed to law and facts of the case and is, thus, untenable." 2. Briefly the facts of the case are that the assessee filed his return of income on 15/12/2020 declaring total income of Rs. 79,17,730/- In the return of income, the assessee has s....
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....was on the record of the Department well before the processing of the return of income by CPC under section 143(1) dt. 24/12/2021. 5.1 It was submitted that while processing the return of income, the CPC Bangalore has not taken cognizance of Form No. 67 which was duly filed by the assessee which has resulted in the tax demand so raised by the CPC in terms of intimation issued under section 143(1) of the Act. It was submitted that neither Section 90 nor DTAA provides that Foreign Tax Credit (FTC) shall be disallowed for non compliance with any procedural requirement. It was submitted that FTC is the assessee's vested right as per Article 24(4)(a) of the DTAA r.w.s 90 of the Act. 5.2 It was further submitted that Rule 128(9) provides that Form No. 67 should be filed on or before the due date of filing the return of income as prescribed under section 139(1) of the Act. However, the Rule no where provides that if the said Form is not filed within due date, the benefit of FTC would be denied. It was submitted that there are many section in the Income Tax Act that specifically deny deduction or exemption or relief if the return is not filed within the prescribed time limit such as ....
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....t as claimed by the assessee. 7. We have heard the rival contentions and perused the material available on the record. The limited issue under consideration is where there is a delay in filing of Form No. 67 as required under Rule 128 of the Income Tax Rules, would the same result in denial of the FTC which the assessee is otherwise eligible to claim and has duly claimed while filing the return of income and which has been duly computed and acknowledged by the CPC, Bangalore as so claimed by the assessee while processing the return of income so filed by the assessee. 8. In this regard, we refer to the decision of Coordinate Bangalore Benches in case of Ms. Brinda Rama Krishna Vs. ITO (supra) wherein the assessee had claimed FTC under section 90 r/w Article 24 of the India - Australia Tax Treaty in the revised returned income. However the assessee did not file Form No. 67 before filing the return of income. On realizing the same, the assessee filed Form No. 67 subsequently and thereafter the revised returned income was processed by CPC and intimation under section 143(1) was issued disallowing the claim of FTC. In the said factual background, the Coordinate Bangalore Benches v....
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.... 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. We find that coordinate bench in 42 Hertz Software India (P.) Ltd. (Supra) wherein following its earlier order in the case of Ms. Brinda Rama Krishna (supra) 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 filing of the returns and that 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 67. Same view is also taken by a coordinate division bench in Vinodkumar Lakshmipathi v. CIT(A)[IT Appeal No. 680/Bang/2022, 6-9-2022. It is well settled that while laying down a particular procedure, if no negative or adverse consequences are contemplated for non-adherence to such procedure, the relevant provision is normally not taken to be mandatory and is considered to be purely directory. Admittedly, Rule 128 does not prescribe denial of credit of FTC. Further the Act i.e. section 90 o....
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....nches vide its order dt. 01/12/2022 has held that mere delay in filing Form No. 67 as per the provisions of Rule 128(9) will not preclude the assessee from claiming the benefit of FTC in respect of tax paid outside India. 8.5 We, therefore, find that the various Coordinate Benches have consistently held that the delay in filing Form No. 67 cannot result in denial of the FTC as the same have to be read as directory and not mandatory in nature. 8.6 In the instant case, it is not in dispute that the assessee has not filed Form No. 67 while filing the return of income however, the same has been filed well before the processing of the return of income and thereafter the intimation under section 143(1) has been issued by the CPC. We therefore find that the CPC has erred in not considering the Form No. 67 so filed by the assessee while processing the return of income and therefore the claim of the FTC by the assessee has been wrongly denied to the assessee. 8.7 As far as the decision of the Coordinate Visakhapatnam Benches in case of Muralikrishna Vaddi (supra) is concerned, in that case, Form No. 67 was filed after scrutiny proceedings were initiated by the AO and that too with ....