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TMI Blog2023 (11) TMI 1189X X X X Extracts X X X X X X X X Extracts X X X X ..... e circumstances of the case in law, the learned commissioner of Income tax (Appeals) erred in dismissing the appeal as there is no doubt about the genuineness of taxes paid in Singapore still the benefit of foreign tax credits under section 90/90A was denied in the absence of claim made in the Return of Income. 3. On the facts and in the circumstances of the case in law, the learned commissioner of Income tax (Appeals) erred in dismissing the appeal by disallowing the foreign tax credits under section 90/90A stating that foreign tax credit was never claimed in original return without considering the fact that declaration of not claiming complete foreign tax credit was explicitly mentioned in the Form 67 filed on 30th December, 2020 due to nonavailability of tax proofs back then. 4. On the facts and in the circumstances of the case in law, the learned commissioner of Income tax (Appeals) erred in dismissing the appeal mere on the violation of procedural norms inspite of accepting the genuineness of tax payment in foreign country.'' 2. All the grounds so raised by the assessee are related to the solitary issue of related to the denial of relief u/s 90/90A of the Income Tax vis a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned from January 2020 to March 2020 of Rs. 34,20,120/- (66,000 Singapore Dollars) has been offered for Singapore tax assessment in the following calendar year. On 14-06-2021, the assessee was assessed by Inland Revenue Authority of Singapore for tax year January 2020 to December 2020. Based on Singapore tax assessment, the assessee has filed revised Form 67 for AY 2020-21 on 18th May,2022 with additional FTC of Rs. 4,56,453/- (8435.664 Singapore dollars) and also enclosed copy of Form 67 filed on 18-05-2022 for ready reference as Annexure B. By the time tax assessment done by Inland Revenue Authority of Singapore for calendar year 2020 on 14 June, 2021 observed that the time period to file Revised Indian Income Tax Return (ITR) for A.Y. 2020-21 was already expired i.e. on 31 March, 2021. It is noted that the assessee has filed rectification return, explaining the reason for filing revised Form 67 but none of these arguments, however impressed the learned Asst. director of Income Tax-CPC and it has passed an order u/s 154 without giving benefit of additional tax relief u/s 90 of Income tax Act 1961. 3. Being aggrieved by the order of the AO, the assessee carried the matter before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hout filing the Form No. 67 in time as per the Rule 128. As already stated several times in the order, the relief claimed by the appellant is not part of the return of income. Therefore, all the grounds raised on the single issue of not allowing the additional claim of FTC are dismissed. 20.0 In the result, the appeal filed by the appellant Shri Abhinav Jhalani for the A.Y 2020-21 against the order passed u/s 154 of the Act is dismissed.'' 4. Feeling dissatisfied with the appeal result the assessee carried the matter with this tribunal. The ld. AR of the assessee in support of the grounds reiterated the contentions raised before the ld. CIT(A). The ld. AR further submitted that the assessee reiterated that if a claim though available in law is not made either inadvertently or on account of erroneous belief of complex legal position, such claim cannot be shut out for all times as there is neither any fraud nor malpractice alleged by the assessee. Based on the fundamental rule of the law of taxation that unless otherwise expressly provided, income cannot be taxed twice as it is neither valid nor just to tax the income twice. Therefore, the benefit of DTAA should be given to the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rity ought to have considered the assessee's claim which was purely legal in nature and the reservation as contemplated by the Hon'ble Supreme Court in the Goetze India Ltd. vs. CIT (supra) is applicable to AO and not to the appellate authority. We are of the view that assessee's claim should have been considered and appropriate relief in accordance with law may be provided. In view thereof, we set aside the matter to the file of the Id. AO to consider the assessee's claim afresh by providing adequate opportunity of being heard. If some compliance is further required, the assessee may be allowed to make the same and decide the grounds of appeal in accordance with law. Thus the appeal of the assessee is allowed for statistical purposes." On being consistent with the said finding and considering the peculiar facts of the present case that the assessee has filed the form no. 67 on 30.09.2020 and there is no dispute about the eligibility of the assessee for the foreign tax credit and the same have been rejected merely on the ground that the same is not claimed in the original return of income. The Jaipur bench has decided vide order dated 27-09- 2023 in IT(IT)A No. 12/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is also taxable in India. In this regard Article 22 of India Finland DTAA provides for credit for foreign taxes. The relevant portion of sub clause (2) of Article 22 is reproduced below :- " 2. In India double taxation shall be eliminated as follows :- Where a resident of India derives income which, in accordance with the provisions of this Agreement, may be taxed in Finland, India shall allow as a deduction from the tax on the income of that resident, an amount equal to the tax paid in Finland. Such deduction shall not, however, exceed that portion of the tax as computed before the deduction is given, which is attributable, as the case may be, to the income which may be taxed in Finland." And since as per section 90 of the Act read with Article 22 sub clause (2) provides that Finland Income Tax paid shall be allowed as a credit against the Indian Tax but limited to proportion of Indian tax. In my view, neither section 90 nor DTAA provides that FTC shall be disallowed for non compliance with any procedural requirements. Since FTC is assessee's vested right as per Article 22(2) of the DTAA read with section 90 and thus same cannot be disallowed for non compliance of procedur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o attach equal importance to the non observance of all conditions irrespective of the purposes they were intended to serve." Apart from the above decision, I further rely upon the decision of Hon'ble Supreme Court in the case of Sambhaji &Ors. vs. Gangabai & Ors., (2008) 17 SCC 117 (SC) wherein it was 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. According to Hon'ble Supreme Court, the procedures are handmaid and not the mistress. It is a lubricant and not a resistance. Thus, a procedural law should not ordinarily be construed as mandatory. The procedural law is always subservient to and is in aid to justice. Even otherwise, since there are no conditions prescribed in DTAA that FTC can be disallowed for non compliance of any procedural provision, therefore, the provisions of DTAA override the provisions of the Act. As the assessee has vested right to claim the FTC under the tax treaty and the same cannot be disallowed for mere delay in compliance of a procedural provision. 5.3. Even otherwise, the said Form 67 filed by the assessee before the tax authorities was available befor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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