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2024 (3) TMI 37 - AT - Income TaxIssues involved: The judgment involves the appeal filed by the Revenue against the order of the Ld. Commissioner of Income Tax (Appeals) regarding the disallowance of Foreign Tax Credit claimed by the assessee for the Assessment Year 2019-20 due to the non-filing of Form-67 as prescribed under Rule 128(9) of the IT Rules, 1962. Details of the Judgment: Issue 1: Disallowance of Foreign Tax Credit The Revenue challenged the order of the Ld. CIT(A)-NFAC, arguing that the disallowance of the Foreign Tax Credit amounting to Rs. 2,83,87,928/- for AY 2019-20 was erroneous as the assessee had not filed Form-67. The Ld. AR contended that the filing of Form-67, though belated, was done before the passing of the intimation under Section 143(1) of the Act. The Ld. AR emphasized that the filing of Form-67 should be considered as directory and not mandatory for claiming the Foreign Tax Credit. The Tribunal noted that Form-67 was filed before the generation of the intimation under Section 143(1) of the Act, and referred to a similar decision by the Hon'ble Madras High Court, which held that such filing was only directory and not mandatory. The Tribunal upheld the order of the Ld. CIT(A)-NFAC, dismissing the Revenue's appeal. Separate Judgment: The Hon'ble Madras High Court's decision was cited to support the argument that the filing of Form-67 for claiming Foreign Tax Credit is directory and not mandatory, as long as it is done before the final assessment order is passed. The Court set aside the impugned order disallowing the Foreign Tax Credit claim and directed reassessment by considering the Form-67 filed by the petitioner. The Court emphasized that the rule regarding Form-67 is for the implementation of the provisions of the Act and is directory in nature. This judgment clarifies the importance of timely filing of necessary forms for claiming tax credits and highlights the distinction between mandatory and directory provisions in tax law.
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