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2025 (7) TMI 33 - AT - Income TaxDenial of Foreign Tax Credit - late filing of Form No. 67 - HELD THAT - It is settled principle of law that FTC cannot be denied to an assessee having filed the same belatedly. Since the Lower Authorities not considered the belated filing of Form No. 67 by the assessee we deem it fit to set-aside the matter back to the file of Jurisdictional Assessing Officer to consider the Form No. 67 claiming Foreign Tax Credit by giving proper opportunity of hearing to the assessee and redo the assessment in accordance with law. Appeal filed by the Assessee allowed for statistical purpose.
1. ISSUES PRESENTED and CONSIDERED
The core legal questions considered by the Tribunal in this appeal are:
2. ISSUE-WISE DETAILED ANALYSIS Issue 1: Condonation of Delay in Filing Appeal Relevant legal framework and precedents: Under the Income Tax Act, 1961, an appeal must be filed within the prescribed time limit. However, the authorities have discretion to condone delay if sufficient cause is shown. The principles governing condonation of delay require examination of reasons for delay, whether they are bona fide and whether prejudice is caused to the revenue. Court's interpretation and reasoning: The assessee filed the appeal against the Rectification order after a delay of 772 days. The delay was attributed primarily to the assessee travelling outside India and inability to verify the order online, causing a delay in filing the appeal. The Tribunal noted that 408 days elapsed until the Rectification order was passed, and thereafter 364 days delay in filing the appeal. The Tribunal found the reasons furnished by the assessee to be satisfactory and bona fide. Key evidence and findings: The assessee's explanation of being abroad and unable to access the Department's website was accepted. The Tribunal observed that the reasons were not routine but genuine, and the delay was not wilful or negligent. Application of law to facts: Applying the settled principles of condonation of delay, the Tribunal held that the delay of 772 days was to be condoned as sufficient cause was shown. Treatment of competing arguments: The Revenue contended that the delay was excessive and routine reasons were given, thus no sufficient cause existed. The Tribunal rejected this contention, emphasizing the genuine circumstances of the assessee's absence from India and inability to file the appeal timely. Conclusion: The Tribunal condoned the delay of 772 days in filing the appeal. Issue 2: Denial of Foreign Tax Credit on Late Filing of Form No. 67 Relevant legal framework and precedents: Section 90 of the Income Tax Act provides relief in the form of credit for taxes paid in foreign countries to avoid double taxation. Form No. 67 is a statutory requirement to claim Foreign Tax Credit. However, precedents from various Tribunals have held that FTC cannot be denied solely on the ground of late filing of Form No. 67 if the claim is genuine and substantiated. Court's interpretation and reasoning: The Tribunal referred to decisions from the Delhi Tribunal (Eastman Industries Ltd.) and Kolkata Tribunal (Neetu Agarwal), which held that FTC should not be denied merely due to late filing of Form No. 67. The Tribunal noted that the lower authorities failed to consider the belated filing of Form No. 67 and denied the FTC claim outright. Key evidence and findings: The assessee produced Form No. 67 with acknowledgement and other supporting documents in the Paper Book. The Tribunal found that the claim of FTC was substantiated and the denial was not justified. Application of law to facts: Applying the legal principles established by the Tribunal precedents, the Tribunal held that the assessee was entitled to claim FTC despite the delay in filing Form No. 67. Treatment of competing arguments: The Revenue relied on the statutory requirement of timely filing of Form No. 67 and the denial of FTC by the Assessing Officer and CIT(A). The Tribunal overruled this, emphasizing the settled law that FTC cannot be denied merely on the ground of delay. Conclusion: The Tribunal set aside the denial of FTC and directed the Assessing Officer to consider the claim afresh after giving the assessee an opportunity of hearing. Issue 3: Rejection of Rectification Application under Section 154 Relevant legal framework and precedents: Section 154 allows rectification of mistakes apparent from the record. The Rectification application was filed against the intimation under section 143(1) denying FTC. The Rectification was rejected by the Additional Commissioner of Income Tax (Appeals)-2. Court's interpretation and reasoning: The Tribunal noted that the Rectification application was rejected, and the appeal against that order was filed with delay. Having condoned the delay, the Tribunal found it appropriate to set aside the matter to the Assessing Officer to reconsider the FTC claim on merits. Key evidence and findings: The Tribunal observed that the Rectification order was passed without considering the belated filing of Form No. 67 and the genuine claim of FTC by the assessee. Application of law to facts: The Tribunal applied the principle that Rectification should be allowed if there is a mistake apparent from the record and the claim is legitimate. Since the lower authorities failed to consider these aspects, the matter was remanded for fresh consideration. Treatment of competing arguments: The Revenue supported the rejection of Rectification and the denial of FTC. The Tribunal found the Revenue's stand untenable in light of the legal precedents and facts. Conclusion: The Tribunal set aside the Rectification order and remanded the matter to the Assessing Officer for fresh adjudication after hearing the assessee. 3. SIGNIFICANT HOLDINGS The Tribunal held:
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