TMI Blog2023 (10) TMI 621X X X X Extracts X X X X X X X X Extracts X X X X ..... t going into the merits of the claim, we deem it proper to direct the AO to decide the claim for foreign tax credit on merits after accepting Form 67 and other related documents filed by the assessee - Appeal of the assessee is allowed for statistical purpose. - Shri Challa Nagendra Prasad, Judicial Member For the Assessee : Shri Ratnesh Kumar Awasthi, Advocate; For the Department : Shri Om Parkash, Sr. D. R.; ORDER PER C. N. PRASAD, J. M. : 1. This appeal is filed by the assessee against the order of the ld. Commissioner of Income Tax (Appeals) [hereinafter referred to CIT (Appeals)]/National Faceless Appeal Centre [NFAC] Delhi, dated 19.06.2023 for assessment year 2019-20 in denying the Foreign Tax Credit (FTC) to the assessee. 2. Briefly stated the facts are that the assessee filed her original return of income under section 139(1) of the Income Tax Act, 1961 (the Act) on 29.07.2019. Thereafter a revised return under section 139(5) of the Act was filed on 28.07.2020 declaring income of Rs. 27,14,700/- including the income earned from outside India of Rs. 27,16,466/-. The original returns under section 139(1) as well as the revised return under se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stances. The ld. Counsel submits that Mumbai Tribunal following various decisions held that mere delay in filing Form 67 as per the provisions of Rule 128(9) will not preclude the assessee from claiming the benefit of foreign tax credit in respect of the taxes paid outside India. The ld. Counsel submits that the decision is placed at page Nos. 285 to 292 of the paper book and is squarely applicable to the facts of the assessees case. 5. The ld. DR strongly supported the order of the ld. CIT (Appeals). 6. Heard rival submissions perused the orders of the authorities below. The only question to be addressed in this appeal is as to whether the assessee is entitled for foreign tax credit though statement in Form 67 is not filed along with the original return under section 139(1) of the Act within the due date specified therein but was filed along with the revised return under section 139(5) of the Act which was also within the due date for filing revised return for the year under consideration. It is not under dispute that original as well as revised returns were filed within the due dates extended by the Notification by the CBDT. The assessee due to factors beyond her control wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 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). In the present case, the assessee though filed her original return of income within the extended time granted vide order dated 23/07/2019, passed by the CBDT under section 119 of the Act, however, furnished Form No.67 along with her revised return of income on 26/08/2020. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 67. Same view is 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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