TaxTMI 
TaxTMI 
2025 (2) TMI 1842
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....the Ld. Commissioner of Income Tax (Appeals) erred on facts and in law in not appreciating that not allowing credit of tax paid in USA on salary income received in USA would result in double taxation of income which is contrary to the provisions of the Act as also the treaty. 3. That the Ld Commissioner of Income Tax (Appeals) erred on facts and in law in sustaining the assessment order and in denying the Foreign Tax Credit (FTC) for default in filling Form 67 under Rule 128. 4. That the Ld Commissioner of Income Tax (Appeals) has erred on facts and in law in denying FTC to the assessee by ignoring the law that provisions of DTAA cannot be overridden by Rule 128 and Form 67. 5. That the Ld. Commissioner of Income Tax (Appeals) erred in law in levying interest under section 234A, 234B, 234C of the Act. 6. That each of the above mentioned grounds are without prejudice to one another and the appellant craves leave to add/amend to the grounds in interest of justice at any time before the disposal of the appeal." 3. Brief facts of the case are that the assessee filed her return of income on 25.07.2018, declaring income of Rs. 15,83,040/-. Assessee ....
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....was processed by Revenue on 20.03.2020 by CPC u/s. 143(1) and the FTC paid by the assessee of Rs. 2,82,020/- was disallowed. The assessee filed form No. 67 with the revenue on 18.09.2020 as per Rule 128 declaring the foreign income and foreign tax paid. The assessee filed rectification application u/s. 154 of the Act on 22.10.2020, but the claim of the assessee for FTC was denied by the Assessing Officer on the ground that there was no mistake apparent from record in the intimation issued by the CPC u/s. 143(1) of the Act. The Assessing Officer referred to Rule 128(8) and 128(9) of the Rules and denied the credit of foreign taxes paid by the assessee. Ld. CIT(Appeals) upheld the order of the Assessing Officer. Ld. Counsel for the assessee submitted that the assessee has filed paper book, in which complete details have been given wherein pay-in slips of the assessee issued by TCS, USA for the months of January to March, 2018 are enclosed at page Nos. 42 to 49. Form-67 filed with Revenue alongwith acknowledgment is placed in paper book pages 60-62. It was submitted that filing of form-67 is directory in nature and not mandatory. It was submitted that as per DTAA read with section 90 ....
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....TC u/s. 90 of the Act of Rs. 2,82,020/-, in the return of income filed with the Revenue. The said foreign tax credit (FTC) was denied to the assessee by CPC while processing the return of income u/s. 143(1) on 20.03.2020, purportedly on the ground that Form No. 67 was not filed by the assessee. The assessee has claimed to have declared income from salary from TCS India as well as TCS, USA in return of income, and claimed the FTC to the tune of Rs. 2,82,020/- deducted in USA. The said credit was denied to the assessee on the ground that Form -67 was not filed on or before the due date of filing of return of income u/s 139(1). The assessee filed rectification application before AO u/s. 154 of the Act on 22.10.2020. Prior to filing of aforesaid rectification application u/s 154, the assessee had filed Form-67 with Revenue on 18.09.2020. The Assessing Officer dismissed the rectification application on 09.03.2021 on the ground that there is no mistake apparent on the face of record and also that Form No. 67 was filed on 18.09.2020 only after completion of processing of return of income u/s 143(1) on 20.03.2020. The FTC cannot be allowed keeping in view Rule 128(8) and 128(9). The ld. CI....
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....ial agreement/ DTAA signed by the government, the specific provisions made in such agreement shall prevail over the general provisions contained in the Income Tax Act. The CBDT vide its Circular No. 333 dated 02/04/1982 has held that:- SECTION 90. AGREEMENT WITH FOREIGN COUNTRIES [CORRESPONDING TO SECTION 40A OF THE 1922 ACT] 627. Specific provisions made in double taxation avoidance agreement Whether it would prevail over general provisions contained in Income tax Act 1. It has come to the notice of the Board that sometimes effect to the provisions of double taxation avoidance agreement is not given by the Assessing Officers when they find that the provisions of the agreement are not in conformity with the provisions of the Income-tax Act, 1961. 2. The correct legal position is that where a specific provision is made in the double taxation avoidance agreement, that provisions will prevail over the general provisions contained in the Income-tax Act. In fact that the double taxation avoidance agreements which have been entered into by the Central Government under section 90 of the Income-tax Act, also provide that the laws in force in either count....
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.... involved. First being the procedural irregularity and second the legitimate quantification for disallowance. If the adjustment has been made on the basis of first defect i.e., for procedural irregularity then according to the decisions referred by the Id. Counsel for the assessee, this irregularity is not fatal enough to deny the claim of deduction u/s 80IC of the Act. More so, when in response to the first proposed adjustment, the assessee has reiterated submission of Form 10CCB. As far as the arguments raised by the Id. D/R is concerned, if a disallowance is to be made after filing of Form 10CCB, then it is a debatable issue and the same is not permissible u/s 143(1) in a prima facie adjustment and the assessee should have been given a notice for that. In other words, if a disallowance is required to be established by arguments and long drawn process of reasoning on points, which there may conceivably be two opinions about, then the case should have been selected for scrutiny assessment. In view of the above discussion, we delete the disallowance of deduction u/s 80IC of the Act, made by the Assessing Officer and upheld by the Ld. CIT(A) and allow the appeal of the assessee. ....
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....ter the end of the relevant assessment year makes the assessee entitled to claim FTC. Therefore, considering the facts of the present case, the FTC deserves to be allowed to the assessee even if Form 67 was filed by the assessee after the due date of filing the return under section 139(1) of the IT Act, 1961, and in our view not allowing foreign tax credit by AO (CPC) was nothing, but a mistake apparent on record. Therefore, we direct the revenue to allow the claim of the assessee. In the case of Vikash Daga vs. ACIT (supra), held as under:- "8. We have given a thoughtful consideration to the orders of the authorities below. The undisputed fact is that the assessee holds a foreign tax credit certificate for Rs. 1887114/-. In our considered opinion filing of form 67 is a procedural / directory requirement and is not a mandatory requirement. Therefore, violation of procedural norms does not extinguish the substantive right of claiming the credit of FTC. We accordingly direct the AO to allow the credit of FTC and hold that rule 128(9) of the Rules does not provide for disallowance FTC in case of delay filing of form 67 is not mandatory but a directory requirement and....