TMI Blog2024 (2) TMI 159X X X X Extracts X X X X X X X X Extracts X X X X ..... evied at that the rates, so provided in the DTAA. But where no such rates on an income or a category of income on the status of an assessee has been prescribed in the DTAA, then there cannot be any conflict with the Act. Where there is no specific provision in the agreement, it is basic law, i.e., the Income-tax Act/Rules, that will govern the taxation of income. Therefore, in absence of any specific compliance provided in INDO-USA DTAA, in view of the ratio laid down in CIT Vs Hindusthan Paper Corpn. Ltd. [ 1994 (2) TMI 312 - CALCUTTA HIGH COURT] the general provisions of the Act or the IT Rules will govern matter of taxation/assessment. The very purpose and object of insertion of rule 128 to statute is to allow FTC and it is so subscribed by s/r (1) therefore, mandate of s/r (9) is sub-servient to s/r (1). As the river cannot rise higher to its source hence s/r (9) it is to be read harmoniously so as not to defeat the purpose of s/r (1) enabling FTC to resident assessee to in terms of article 25 of DTAA. It is apt to mention here that the very insertion of rule 128 is stemmed out of provision of section 295(1)(ha) of the Act which empowered the board to prescribe procedure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the same before the due date u/s 139(1) of the Act is not fatal. Thus, we hold that belated filing of form no 67, certificate statement as envisaged under s/r (8) any-time before it is actually processed or before the final assessment is actually made is sufficient compliance of s/r (9) of IT Rules, thus entitled to FTC. Assessee appeal allowed. - Hon ble Shri S. S. Viswanethra Ravi, Judicial Member And Shri G. D. Padmahshali Accountant Member For the Assessee : Mr Kishor Phadke [ Ld. AR ] For the Revenue : Ms Sonal Sonkavde [ Ld. DR ] ORDER PER G. D. PADMAHSHALI, AM; This appeal of the assessee for assessment year 2019-20 [for brevity AY ] is assailed against DIN Order No. ITBA/APL/S/250/2023-24/1057622362(1) dt. 01/11/2023 passed u/s 250 of the Income-tax Act, 1961 [for brevity the Act ] by Addl./Joint Commissioner of Income Tax Appeals-11, Delhi [for brevity CIT(A) ], which in turn ascended out of order of intimation dt. 25/02/2021 passed u/s 143(1) of the Act by Centralised Processing Centre, Bengaluru, [for brevity CPC ]. 2. The long and short of the case is that; the appellant is an individual assessee who for the year under consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owed u/s 139(4) of the Act and well before ITR actually processed, hence no prejudice was caused to the Revenue. 5. Per contra, the Ld. DR Ms Sonkavde vehemently supported the orders of both the tax authorities and submitted that for claiming FTC, filing of Form No 67 on or before the due date of filing of return of income as provided u/r 128(9) of IT Rules, 1962 is must mandatory in nature. It is further stated that merely because the obligation is created under rules in place of provisions of the Act does not sanction the appellant to claim such obligation is directive and not mandatory. Since the appellant by choice failed to file said claim and accompanying requisite certificates as specified in s/r (8) within statutory due date as prescribed u/r 128(9) r.w.s. 139(1) of the Act and no reasonable cause beyond such belated filing is established at any-time including the present proceedings before this Tribunal, hence non-compliance of prescribed mandate per-se stands established. By pressing into service, the decision of Co-ordinate bench rendered in ITA No.269/Viz/2021 dt 14/06/2022 the Ld. DR solicited dismissal of the present appeal claim for FTC canvassing that delayed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate specified for furnishing the return of income u/s 139(1) of the Act. It shall be worthy to note here that, CBDT vide Notification No. 100/2022/F. No. 370142/35/2022-TPL GSR 636(E) dt. 18/08/2022 substituted this s/r (9) w.r.e.f. 01/04/2022 thus entitling thereby FTC credit to the resident assessee where compliance with respect to s/r (8) is made any time before the expiry of time limit prescribed for filing of return of income u/s 139(4) of the Act. It shall be apt to note further that, the explanatory memorandum appended to former notification clarifies that this amendment is effective from the 1st day of April, 2022 so that it applies to all the claims of foreign tax credit furnished during the financial year 2022-2023. 9. Now let us consider standing position of INDO-USA Treaty/DTAA; 9.1 The article 25(2)(a) of INDO-USA DTAA provides relief for FTC credit clearly stating that, Where a resident of India derives income which, in accordance with the provisions of this Convention, may be taxed in the United States, India shall allow as a deduction from the tax on the income of that resident an amount equal to the income-tax paid in the United States, whether directly or b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT Rules is concerned, it is neither nullified by article 25 nor article 26 of the DTAA. On the contrary, article 26 of DTAA simply prescribes non-discrimination while dealing with such additional or other requirements prescribed under domestic laws of the contracting state. Therefore, the appellant s first contention that the DTAA since prescribed no filing requirement for FTC will prevail over the provisions of rule 128 of IT Rules, 1962 prima-facie fails to inspire any confidence. Ergo this contention stand rejected. The reliance placed on the decision of Co-ordinate Benches in Sanjiv Gopal Vs Addl CIT reported in 66 CCH 0078 and Brinda Ramakrishna Vs ITO reported in 135 taxmann.com 358, by the Ld. AR is answered accordingly. 12. It is the case of the Revenue that, s/r (9) r.w.s/r (8) prescribed twin conditions (i) with respect to furnishing and secondly (ii) time limit within which it is to be furnished. In view of the Revenue mere filing does not entitle the assessee to FTC but filing within the time limit prescribed by s/s (1) of section 139 of the Act. To drive home this contention the Ld. DR heavily relied on the decision of Hon ble Supreme Court in PCIT Vs WIPRO Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch and any FTC claim without first verifying the eligibility of the claimant, genuineness correctness of claim. Undisputedly, a belated compliance would be indifferent to eligibility, genuineness correctness, hence cannot be subjected to rejection or denial. In our considered view filing of claim form alongwith certificates/statement etc., is mandatory as it relates to essence of FTC claim to be allowed as matter of substance, however directory with respective to time limit within which it is to be made as it is merely matter of convenience rather than substance, as the matter of fact rule 128 of IT Rules prescribed no consequences for delayed compliance or non-compliance. 15. This view we find fortified by the Hon ble Madras High Court in Hyundai Motors India Ltd. Vs UOI reported in 2015 (1) TMI 23, wherein their Hon ble lordships have also dealt with nature of time limit prescribed whether mandatory or directory co-relating with prescription of consequences for non-compliance. It is held that, the rule setting a time clock prescribing no consequences for non-compliance within such time limit, then such rule for the limited purpose of time clock has to be seen as director ..... X X X X Extracts X X X X X X X X Extracts X X X X
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