TMI Blog2023 (1) TMI 370X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 cre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act and hence the impugned order / intimation under section 143(1) of the Act is void ab initio and is liable to be quashed / set aside. 4. On the facts and in the circumstances of the case and in law, rules cannot override the provisions of the Income-tax Act, 1961 which has been clarified by the amendment to Rule 128 of the Income-tax Rules, 1962 and thus the action of the Assessing Officer and CIT(A) / NFAC are erroneous. 5. On the facts and circumstances of the case and in law, the Assessing Officer erred in levying higher interest under section 234A, 234B and 234C of the Act. The Assessing Officer be directed to recompute the interest. 6. The appellant craves leave to add to, alter or amend, the above Grounds of Appeal as and when advised. 3. The only grievance of the assessee is against denial of foreign tax credit under section 90/90A of the Act due to delay in filing Form no.67. 4. Brief facts of the case, as emanating from the record are: The assessee is an individual. For the year under consideration, the assessee filed his return of income belatedly on 31/10/2020, declaring a total income of Rs.64,42,150. The assessee in his return of income cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7, 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 under section 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 and the same reads as under: (9) 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 end of the assessment year relevant to the previous year in which the income referred to in sub-rule (1) has been offered to tax or assessed to tax in India and the return for such assessment year has been furnished within the time specified under sub-section (1) or sub-section (4) of section 139: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also taken by a coordinate division bench in Vinodkumar Lakshmipathi V CIT(A) NFAC ITA No.680/Bang./2022 06.09.2022. It is well settled that while laying down a particular procedure, if no negative or adverse consequences are contemplated for non-adherence to such procedure, the relevant provision is normally not taken to be mandatory and is considered to be purely directory. Admittedly, Rule 128 does not prescribe denial of credit of FTC. Further the Act i.e. section 90 or 91 also do not prescribe timeline for filing of such declaration on or before due date of filing of ROI. Further rule 128 (4) clearly provides the condition where the foreign tax credit would not be allowed. Rule 128 (9) does not say that if prescribed form would not be filed on or before the due date of filing of the return no such credit would be allowed. Further by the amendment to the rule with effect from 1 April 2022, the assessee can file such form number 67 on or before the end of the assessment year. Therefore, legislature in its own wisdom has extended such date which is beyond the due date of filing of the return of income. Further, the fact in the present case is quite distinct then the issue involv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... going into the merits, therefore, we deem it appropriate to direct the jurisdictional Assessing Officer 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 no.1, 2 and 4, raised by the assessee are allowed for statistical purposes. 14. During the course of hearing, the learned A.R. submitted before us that if relief is granted in terms of grounds no.1, 2 and 4, then ground no.3, is prayed to be treated as not pressed. In view of the aforesaid findings and the above submission of the learned A.R., ground no.3, is hereby dismissed as not pressed. 15. Insofar as levy of interest under section 234A of the Act is concerned, we deem it appropriate to remand the issue to the file of the Assessing Officer 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 under sections 234B and 234C of the Act, the same are consequential in nature. Accordingly, ground no.5, raised in assessee s appeal is allowed for statistical ..... X X X X Extracts X X X X X X X X Extracts X X X X
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