TMI Blog2023 (8) TMI 808X X X X Extracts X X X X X X X X Extracts X X X X ..... r the Appellant : Shri Vipul Gohil, CA For the Respondent : Shri Vijay Kumar Jaiswal, CIT ORDER PER ANNAPURNA GUPTA, ACCOUNTANT MEMBER This appeal has been filed by the assessee against order passed by the ld. Pr. Commissioner of Income Tax-3, Ahmedabad dated 8.2.2022 passed under section 263 of the Income Tax Act, 1961 [hereinafter referred to as the Act for short] for the Asst. Year 2017-18. 2. The assessee has challenged the order of the ld.Pr.CIT raising the following grounds: 1. Passing order under section 263 of Income tax Act without considering the provision of Income Tax Act which is against justice and equity. 2. Passing order under section 263 of Income tax Act without giving proper opportunity of being heard. The Ld. Pr. CIT-3 has wrongly applied provision of 263(1) of Income Tax Act. 3. Passing order under section 263 of Income tax Act with instruction to AO for fresh assessment for A.Y. 2017-18. 4. The appellant reserves, craves leave all these to Hon'ble Commissioner to add, alter, amend, delete, modify, vary, and/or rescind any of the facts/grounds hereafter, if necessary, in the interest of justice. 3. We ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax shall be allowed on furnishing the following documents by the assessee, namely: 6. Para 2.1 of the ld.Pr.CIT order reveals that he took note of the fact from the case records of the assessment in the present case that due inquiry was conducted by the AO on the issue of foreign tax credit belatedly claimed and the assessee had filed a reply to him stating that requirement of filing requisite form no.67 was actually a directory provision and not mandatory. In support, he relied upon various decisions including a direct decision on the issue by the ITAT Bangalore Bench in the case of M/s. Brinda Rama Krishna in ITA No.454/Bang/2021 order dated 17.11.2021. The ld.Pr.CIT after taking note of the same, went on to hold that this decision of the ITAT, Bangalore Bench was a decision by the SMC Bench and not binding precedent and the assessee had not cited any decision of the jurisdictional High Court and he further went to note and discuss in detail the requirement as per the Rule being mandatory and not directory, and accordingly noting this error in the assessment order, he issued show cause notice to the assessee. The contents of para 2 to 3 of the ld.Pr.CIT s order reveals the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the assessing officer did not look into this aspect arid assessed the total income as returned by the assessee in the revised return of income and allowed FTC of Rs. 28,52,306/- as claimed by the assessee. Thus, it was noticed that the A.O. had failed to pass the assessment order without making any enquiry on this aspect and failed to make disallowance of tax credit claimed on foreign income to the tune of Rs. 28,52,306/-. It is thus, apparent that order passed by the then AO in this case for AY 2017-18 u/s. 143(3) of the Act dated 29.11.2019 is erroneous in so far as it is prejudicial to the interest of revenue to the above extent. 3. In view of above stated facts, a show cause notice was issued to the assessee on 07.01.2022 giving the assessee an opportunity of being heard and requesting to show cause as to why the impugned amount of Rs. 28,52,306/- should not be disallowed on account of irregular tax credit claimed u/s. 90/91 of the I.T. Act and demand is raised for A.Y.2017-18. The said notice was duly served upon the assessee online on e-Portal and requested to furnish its reply through e- filing portal. 7. Though these contents do not reveal case law cited by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore, it can be safely stated that the issue has not attained finality. The relevant finding in of the ld.Pr.CIT at para 6.5 of his order as under: 6.5 The assessee has relied upon various case laws of High Courts in which it has taken a view that filing of audit report is directory and not mandatory. The assessee has contended that violation of procedural norm does not extinguish the substantive right of claiming the credit of foreign tax credit. The said case laws have been gone through. However, it is found that the same are not applicable to the instant case. All the decisions relied upon by the assessee are of High Court and not of the Apex Court and therefore, it can safely be said that the issue has not attained its finality. Besides this, these decisions are relating to claim of deduction u/s. 80IA(7), 10A(5) etc. where Audit Report was not filed in time. Further, it is a matter of fact that the assessee has not filed Form No.67 on or before the due date of filing of return of income, as specified in Sub-Rule (9) of Rule 128 and therefore, as per sub-Rule (1) of Rule 128, he cannot be allowed the credit of foreign tax paid by him for the year under consideration. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e decision of Hon ble Apex Court in the case of PCIT Vs. Wipro Ltd. in Civil Appeal No.1449 of 2022 dated 11.7.2022 which dealt with the aspect of mandatory nature of the requirement of filing of certain forms for claiming exemption. It was pointed out that ITAT, Mumbai had distinguished the said decision pointing out that firstly it dealt with the exemption provision and requirement of filing of form was provided in the Statute itself which the Hon ble Apex Court held, therefore, to be a mandatory requirement for claiming exemption. The ld.counsel for the assessee pointed out that ITAT distinguished present requirement of filing of form no.67 as being prescribed in the Rules and not in the Act itself, and not relating to exemption provision. 13. Considering the above, we hold that there was no error in the order of the AO accepting the assessee s claim of foreign tax credit, even though form no. 67 was filed belatedly beyond date prescribed under section 139(1) of the Act, since it was allowed by the AO following the decision of the ITAT in the case of M/s. Brinda Rama Krishna (supra) and several other judgments have also affirmed the proposition of law laid down in the said de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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