2023 (1) TMI 370 - AT - Income Tax
Denial of foreign tax credit u/s 90/90A - delay in filing Form no.67 - Form No. 67 was filed by the assessee after the due date of filing the return of income u/s 139(1) as per the provisions of Rule 128(9) and thus claim of the assessee was rejected - HELD THAT:- We find that under Rule 128(9), as it stood during the year under consideration, provided that 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.
Thus, during the year under consideration, the assessee was required to furnish Form No. 67 on or before the due date of filing the return of income u/s 139(1) of the Act, as per the provisions of Rule 128(9). We further find that Rule 128(9) has recently been substituted by the Income-tax (Twenty-seventh Amendment) Rules, 2022, w.r.e.f. 01/04/2022 .
Thus with effect from 01/04/2022, the time period for furnishing statement in Form No. 67 has been extended till the 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).
We find that in another decision in Anuj Bhagwati [2022 (9) TMI 1397 - ITAT MUMBAI] the coordinate bench of the Tribunal 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.
We are of the considered opinion that mere delay in filing Form No. 67 as per the provisions of Rule 128(9), as it stood during the year under consideration, will not preclude the assessee from claiming the benefit of foreign tax credit in respect of tax paid outside India. Since in the present case, the claim of the assessee was denied on this technical aspect without going into the merits, therefore, we deem it appropriate to direct the jurisdictional AO to decide the claim of the foreign tax credit on merits, after accepting the Form No. 67, and other related documents filed by the assessee. Accordingly, grounds raised by the assessee are allowed for statistical purposes.
Levy of interest u/s 234A - HELD THAT:- We deem it appropriate to remand the issue to the file of the AO for de novo adjudication after the necessary examination of facts as to whether or not the return of income filed by the assessee is within the prescribed time limit under the Act. With regard to the levy of interest u/s 234B and 234C same are consequential in nature. Accordingly, ground raised in assessee’s appeal is allowed for statistical purposes.