TaxTMI 
TaxTMI 
2026 (9) TMI 911
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.... Section 90 of the Income Tax Act 1961 r.w.r. 128 of the Income Tax Rules. 3. On the facts and circumstances of the case and in law, the Ld. CIT(A) failed to consider the fact that the CPC, despite allowing the FTC in Annexure FSI and Annexure TR of the Order u/s. 154, did not allow the same while computing the overall tax liability of the appellant. The CIT(A) further erred by not making any mention about the same in his order passed u/s. 250. 4. On the facts and circumstances of the case and in law, the Ld. CIT(A) as well as the CPC erred in ignoring the fact that salary income of Rs. 25,60,820 earned from Ascus International(s) Pte Ltd. (Foreign company) has been correctly disclosed and the tax amount of Rs. 5,63,380 with-held on the said foreign income has also been correctly disclosed in Form 67 and claimed u/s. 90 in the return of income. As a result, denying the relief has resulted in double taxation of the salary income which is not correct in view of the DTAA between Indian and Singapore which override the provisions of domestic law. 5. On the facts and in the circumstances of the case and in the law, the CIT(A) as well as the CPC erred in not co....
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...., but since the said income was taxed in Singapore also. The assessee claimed relief from double taxation as provided under Section 90 of the Act. The assessee also informed that Form No. 67 prescribed under the Income-tax Rules, 1962, was filed belatedly on 20.11.2022, though the same was required to be filed one month prior to the date of filing of the return of income but the assessee submitted that various Courts and Tribunals consistently ruled that due date requirement under Rule 128 of the Income-tax Rules for filing Form No. 67 is merely directory in nature and cannot be treated as mandatory, and Rule 128(9) of the Rules does not provide for disallowance of Foreign Tax Credit (FTC) in case of delay in filing Form No. 67. But said claim of the assessee was rejected by the learned CIT(A) observing as under: 5.3 OBSERVATION BY THIS OFFICE:- On examining the facts and submissions, it is observed that the appellant earned salary income from both domestic and foreign sources, including Ascus International(s) Pvt. Ltd (Singapore). The appellant claimed Foreign Tax Credit (FTC) of Rs. 5,63,380 for taxes withheld in Singapore and also claimed credit of Self-Assessm....
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....on the decision of the coordinate Bench in Gopal Ramkrishnan v. DCIT, ITA Nos.2661 & 2662/Mum/2026, and submitted that the requirement of furnishing Form No. 67 is procedural and that delay in furnishing the form cannot extinguish the substantive right to Foreign Tax Credit under section 90 of the Act. 5. We have considered the rival submissions and perused the material available on record. The limited controversy is whether the assessee's claim of Foreign Tax Credit can be rejected solely for delayed furnishing of Form No. 67, when the foreign income has been offered to tax in India and the foreign tax payment is otherwise verifiable. The coordinate Bench, in Gopal Ramkrishnan (supra), after considering the scheme of section 90 and Rule 128 and the judicial precedents including Nirmala Murli Relwani v. ACIT, ITA No.2094/Mum/2022, Sonakshi Sinha v. CIT, ITA No.1704/Mum/2022, order dated 08.09.2022, Ms. Brinda Rama Krishna v. ITO, [2022] 135 taxmann.com 358 (Bangalore - Trib.), and 42 Hertz Software India (P.) Ltd. v. ACIT, [2022] 139 taxmann.com 448 (Bangalore - Trib.), held that the requirement of furnishing Form No. 67 is procedural and that delayed filing, by itself, does....
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....Laws (Relaxation of Certain Provisions) Ordinance, 2020, and notifications issued thereunder by the CBDT. Learned AR also submitted that provisions of section 90/91 of the Act are substantive provisions and the provisions of Rule 128 of the Income Tax Rules, 1962, cannot override the same. Learned AR placed reliance upon certain decisions of the coordinate bench of the Tribunal in support of its submissions. 6. On the contrary, the learned Departmental Representative vehemently relied upon the impugned order passed by the learned CIT(A). 7. We have considered the rival submissions and perused the material available on record. In the present case, the assessee filed the revised return of income under section 139(5) of the Act on 26/08/2020, and claimed the foreign tax credit of Rs. 11,79,796. It is the claim of the assessee that she has received certain income amounting to Rs. 48,10,498, from foreign sources, on which tax was already paid in Ghana. Due to certain factors beyond her control, the assessee received Form No.67, after some delay. However, as soon as the assessee received the aforesaid Form, she filed a revised return of income under section 139(5) of th....
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....he end of the assessment year in which the corresponding income has been offered/assessed to tax and the return of such assessment year has been furnished within the time specified under 139(1) or 139(4) of the Act. 10. We find that the coordinate bench of the Tribunal in Sonakshi Sinha vs CIT, in ITA No. 1704/Mum./2022, vide order dated 08/09/2022, while dealing with a similar issue wherein the taxpayer filed Form No.67, after the due date for filing the return of income under section 139(1), observed as under: "012. We have carefully considered the rival contention and perused the orders of the lower authorities. Short question In this appeal is whether assessee is entitled to foreign tax credit even when form number 67 required to be filed according to the provisions of rule 128 (9) of the Income Tax Rules on or before the due date of filing of the return of income, not complied by the assessee, but same was filed before the completion of the assessment proceedings. Precisely, the fact shows that assessee filed return of income u/s. 139 (1) of the income tax act. In such a return of income, she claimed the foreign tax credit. However, form number 67 was filed d....
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....s not the case of violation of any of the provisions of the act but of the rule, which does not provide for any consequence, if not complied with Therefore, respectfully following the decisions of the coordinate bench on this issue, we hold the assessee is eligible for foreign tax credit, as she has filed form number 67 before completion of the assessment, though not in accordance with rule 128 (9) of The Income Tax Rules, which provided that such form shall be filed on or before the due date of filing of the return of income. Accordingly, ground number 2 of the appeal of the assessee is allowed.' 11. We further find that in another decision in Anuj Bhagwati vs DCIT, in ITAS No.1844 and 1845/Mum./2022, the coordinate bench of the Tribunal vide order dated 20/09/2022, while deciding a similar issue held that section 90/91 of the Act has not been amended insofar as grant of foreign tax credit is concerned and Rules cannot override the Act and therefore filing of Form No. 67 is not mandatory but it is directory. The relevant findings of the coordinate bench of the Tribunal in the aforesaid decision are as under: "8. We considering the facts, circumstances provisi....
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....ble to the present case. Coordinate Bench while giving its decision has placed reliance on other decisions of the Coordinate Bench in the case of 42 Hertz Software India Private Ltd. us. ACIT [2022] 139 taxmann.com 448 (Bng), wherein it followed the earlier order in the case of Brinda Ramakrishna vs. ITO [2022] 135 taxmann.com 358 (Bng). It also referred to the decision of Binod Kumar Lakshmipati vs. CIT in ITA No. 680/Bng/2022, dated 06.09.2022. In all these decisions, it was held that "one of the requirement of Rule 128 for claiming FTC is that Form-67 is to be submitted by the 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 of filing of Form No.67% 5.4. It is further noted that amendment to Rule 128 is effective from 01.04.2022 whereby assessee is allowed to file Form-67 on or before the end of the Assessment Year, whereby legislature has extended such date which is beyond the due date of filing of return of income. It was submitted that filing of Form 67 as per the provisions of section 90 read with Rul....
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....he condonation mechanism under section 119(2)(b) of the Act. The remedy under section 119(2)(b) is administrative in character and cannot curtail the appellate jurisdiction to grant relief where the assessee otherwise satisfies the substantive conditions prescribed under the Act. 4.7 In the present case, the assessee has admittedly furnished Form No.67, though belatedly, and there is no allegation that the claim of FTC is either fictitious or otherwise inadmissible on merits. In these circumstances, denial of FTC merely on account of delayed filing of Form No.67 would elevate a procedural requirement over a substantive statutory right and would defeat the very object underlying section 90 of the Act and the relevant DTAAs. 4.8 Accordingly, the impugned orders are set aside and the matter is restored to the file of the Assessing Officer with a direction to examine the assessee's claim of Foreign Tax Credit on merits after taking on record Form No.67 and the supporting evidences furnished by the assessee. Subject to verification that the taxes claimed as credit have actually been paid in the respective foreign jurisdictions and that no refund thereof has been cl....