TMI Blog2023 (1) TMI 1282X X X X Extracts X X X X X X X X Extracts X X X X ..... give credit for foreign tax as per Form No. 67 filed on 02.04.2021 after due verification as per law. Thus we direct the AO to give credit for foreign tax as per Form No. 67 filed on 02.04.2021 after due verification as per law. Appeal of the assessee is allowed for statistical purposes. - SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER For the Assessee : Shri. Abhishek Bansal For the Revenue : Shri. Ganesh R. Gale, Standing Counsel ORDER This is an appeal filed by the assessee against the order passed by the National Faceless Appeal Centre (NFAC), Delhi, (DIN Order No. ITBA/NFAC/S/250/2022-23/1045892809(1)) under section 250 of the Income Tax Act, 1961 (hereinafter called the Act ), order dated 29.09.2022, on the following grounds of appeal: 1. For that the intimation u/s 143(1) is bad in law as well as on facts. 2. For that the Ld. ADIT (CPC) Bengaluru erred in not allowing relief u/s 90 for non-filing of Form No. 67 which is merely a procedural error. 3. For that Ld. CIT(A) erred in affirming the action of the Ld. ADIT (CPC) Bengaluru in spite of the fact that the Form No. 67 was filed by the assessee upon receipt of Intimation u/s 143(1). 4. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed under DTAA on these overseas income. The assessee filed return of income but did not file Form No. 67 within due date as per the Rules. The assessee filed Form No. 67 on 02.04.2021 which is much before the CIT (A) s order. 7. I further observed that before the CIT(A), the assessee has relied on many judgments but he did not accept. On my observation a similar issue has been decided by the Co-ordinate Bench of the Tribunal in the case of Vinodkumar Lakshmipathi Vs. CIT(A), NFAC, Delhi in ITA No. 680/Bang/2022 reported in [2022] 145 taxmann.com 235 (Bangalore Trib.) is as under: 4. We have heard the rival submissions and perused the materials available on record. The claim of the assessee has been denied while processing return of the assessee u/s 143(1) of the Income-tax Act, 1961 ['the Act' for short] dated 11-6-2020 on the reason that assessee has not filed the Form No. 67 along with return of income so as to claim the foreign tax credit. However, the same has been filed before the Ld. CIT(A) on 22-9-2018. The assessee has made the contention before Ld. CIT(A) that assessee has offered the foreign income of Rs. 2,01,024/- and also paid tax on it at Rs. 63,342/- a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owed on furnishing the following documents by the assessee, namely: (i) a statement of income from the country or specified territory outside India offered for tax for the previous year and of foreign tax deducted or paid on such income in Form No. 67 and verified in the manner specified therein; (ii) certificate or statement specifying the nature of income and the amount of tax deducted therefrom or paid by the assessee, (a) from the tax authority of the country or the specified territory outside India; or (b) from the person responsible for deduction of such tax; or (c) signed by the assessee: Provided that the statement furnished by the assessee in clause (c) shall be valid if it is accompanied by, (A) an acknowledgement of online payment or bank counter foil or challan for payment of tax where the payment has been made by the assessee; (B) proof of deduction where the tax has been deducted. (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 due date specified for furnishing the return of income under sub-sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a resident of India in respect of income from sources within Australia which has been subjected to tax both in India and Australia shall be allowed as a credit against the Indian tax payable in respect of such income but in an amount not exceeding that proportion of Indian tax which such income bears to the entire income chargeable to Indian tax; It was submitted by him that section 90 of the Act read with Article 24(4)(a) provides that Australian tax paid shall be allowed as a credit against the Indian tax but limited to proportion of Indian tax. Neither section 90 nor DTAA provides that FTC shall be disallowed for noncompliance with any procedural requirements. FTC is Assessee's vested right as per Article 24(4)(a) of the DTAA read with section 90 and same cannot be disallowed for non-compliance of procedural requirement that is prescribed in the Rules. 8. It was further submitted by him that section 295(1) of the Act gives power to the CBDT to prescribe Rules for various purposes. Section 295(2)(ha) gives power to the Board to issue Rules for FTC. The relevant extract is as follow: (2) In particular, and without prejudice to the generality of the foregoing power, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oneous to attach equal importance to the non-observance of all conditions irrespective of the purposes they were intended to serve. Further reliance was placed on the decision of the Hon'ble Supreme Court, in the case of Sambhaji and Others v. Gangabai and Others, reported in [2008] 17 SCC 117, wherein it has been held that procedure cannot be a tyrant but only a servant. It is not an obstruction in the implementation of the provisions of the Act, but an aid. The procedures are handmaid and not the mistress. It is a lubricant and not a resistance. A procedural law should not ordinarily be construed as mandatory; the procedural law is always subservient to and is in aid to justice. It was submitted that filing of Form 67 as per the provisions of section 90 read with rule 128(9) is a procedural law and should not control the claim of FTC. 12. It was further submitted that even in the context of 80-IA(7), 10A(5) etc, wherein there is specific provision for disallowance of deduction/exemption if audit report is not filed along with the return, various High Courts have taken a view that filing of audit report is directory and not mandatory. Reliance in this regard was placed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and hence non-furnishing of Form No. 67 before the due date u/s. 139(1) of the Act was fatal to the claim for FTC. 16. I have given a careful consideration to the rival submissions. I agree with the contentions put forth by the learned counsel for the Assessee and hold that (i) rule 128(9) of the Rules does not provide for disallowance of FTC in case of delay in filing Form No. 67; (ii) filing of Form No. 67 is not mandatory but a directory requirement and (iii) DTAA overrides the provisions of the Act and the Rules cannot be contrary to the Act. I am of the view that the issue was not debatable and there was only one view possible on the issue which is the view set out above. I am also of the view that the issue in the proceedings u/s. 154 of the Act, even if it involves long drawn process of reasoning, the answer to the question can be only one and in such circumstances, proceedings u/s. 154 of the Act, can be resorted to. Even otherwise the ground on which the revenue authorities rejected the Assessee's application u/s. 154 of the Act was not on the ground that the issue was debatable but on merits. I therefore do not agree with the submission of the learned DR in this r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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