TaxTMI 
TaxTMI 
2026 (7) TMI 301
X X X X Extracts X X X X
X X X X Extracts X X X X
....f income under section 139(1) of the Act. 3. We have heard the rival submissions and perused the materials available on record. The assessee filed his original return of income for the assessment year 2021-22 on 24-12-21 declaring total income of Rs. 2,41,31,730/- and claimed relief under Section 90/ 90A of the Act on account of foreign tax credit of Rs. 13,91,287/-. The said return was duly processed by the Learned CPC under Section 143(1) of the Act dated 22-3-2022. However, the Learned CPC did not give the relief for foreign tax credit of Rs. 13,91,287/- in the said intimation under Section 143(1) of the Act dated 22-3-2022 on the ground that Form No. 67 was not filed by the assessee within the due date of filing the return of income under Section 139(1) of the Act. This action of the Learned CPC was also upheld by the Learned JCITA. Aggrieved, the assessee is in appeal before us. 4. It is not in dispute that assessee is a salaried individual employed with Amazon Seller Services Pvt Ltd. It is not in dispute that the assessee earned income not only from India but also from USA. The assessee being a resident Indian, had duly offered the global income to tax and claimed fore....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 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. (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 sub-section (1) of section 139, in the manner specified for furnishing such return of income.' 4. The Assessee claimed FTC of Rs. 4,73,779/- u/s. 90 of the Act read with Article 24 of India Australia tax treaty ("DTAA") in a revised return of income filed on 31-8-2018. The Assessee had not filed the Fo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tion of Indian tax which such income bears to the entire income chargeable to Indian tax; " It was submitted by him that section 90 of the Act read with article 24(4)(a) provides that Australian tax paid shall be allowed as a credit against the Indian tax but limited to proportion of Indian tax. Neither section 90 nor DTAA provides that FTC shall be disallowed for non-compliance with any procedural requirements. FTC is Assessee's vested right as per article 24(4)(a) of the DTAA read with section 90 and same cannot be disallowed for non-compliance of procedural requirement that is prescribed in the Rules. 8. It was further submitted by him that section 295(1) of the Act gives power to the CBDT to prescribe Rules for various purposes. Section 295(2)(ha) gives power to the Board to issue Rules for FTC. The relevant extract is as follow: "(2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters :- ..................... (ha) the procedure for granting of relief or deduction, as the case may be, of any income-tax paid in any country or specified territ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t, in the case of Sambhaji v. Gangabai [2008] 17 SCC 117, wherein it has been held that procedure cannot be a tyrant but only a servant. It is not an obstruction in the implementation of the provisions of the Act, but an aid. The procedures are handmaid and not the mistress. It is a lubricant and not a resistance. A procedural law should not ordinarily be construed as mandatory; the procedural law is always subservient to and is in aid to justice. It was submitted that filing of Form 67 as per the provisions of section 90 read with rule 128(9) is a procedural law and should not control the claim of FTC. 12. It was further submitted that even in the context of 80IA(7), 10A(5) etc, wherein there is specific provision for disallowance of deduction/exemption if audit report is not filed along with the return, various High Courts have taken a view that filing of audit report is directory and not mandatory. Reliance in this regard was placed on the following cases : ♦ CIT v. Axis Computers (India) (P.) Ltd [2009] 178 Taxman 143 (Delhi) ♦ Pr. CIT v. Surya Merchants Ltd. [2016] 72 taxmann.com 16/387 ITR 105 (All.) ♦ CIT v. American Data....