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2022 (12) TMI 742 - ITAT HYDERABADCredit of foreign tax paid - delayed filing of Form 67 - authorities below denied stating that under rule 128(9) Of the Income tax Rules, 1963 assessee should have furnished the statement in Form 67 before the due date specified for furnishing the return of income under sub-section (1) of Section 139 whereas in this case, the assessee furnished such Form 67 along with the return of income filed u/s 139(5) - HELD THAT:- A lot many decisions of the Hon'ble Apex Court including the case in Union of India Vs. Azadi Bachao Andolan [2003 (10) TMI 5 - SUPREME COURT] and reached a conclusion that since Rule 128(9) of the Rules does not provide for disallowance of FTC in the case of delay in filing Form 67 and such filing within the time allowed for filing the return of income under section 139(1) of the Act is only directory, since DTAA over rides the Act, and the Rules cannot be contrary to the Act. We find from Article 25(2)(a) of the DTAA that where a resident of India derives income which, in accordance with the provisions of the convention, may be taxed in the United States, India shall allow as a deduction from the tax on the income of the resident an amount equal to the income tax paid, paid in the United States, whether directly or by deduction. In view of this provision over riding the provisions of the Act, according to us, Rule 128(9) of the Rules has to be read down in conformity thereof. Rule 128(9) of the Rules cannot be read in isolation. Rules must be read in the context of the Act and the DTAA impacting the rights, liabilities and disabilities of the parties. We are of the considered opinion that the decisions relied upon by the assessee are applicable to the facts of the case on hand while respectfully following the same, we allow the appeal, and direct the Learned Assessing Officer to verify the details of the foreign tax paid by the assessee on the earnings at foreign source and take a view inconformity with the established law discussed above. Appeal of the assessee is allowed.
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