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TMI Blog2024 (7) TMI 334X X X X Extracts X X X X X X X X Extracts X X X X ..... aimed by the assessee for the reason that the assessee had not filed Form 67 as per Rule 128 of the Income Tax Rules, 1962, within the due date for filing the returns. In fact, the assessee filed the revised return and also filed Form 67 and claimed FTC well before passing of the intimation under section 143(1) of the Act. The assessee challenged this intimation before the NFAC and contended that the Form 67 has been filed along with the revised return on 28.03.2022 by which time no order under section 143(1) of the Act was passed by the authorities and therefore the same is before the completion of the assessment proceedings by the authorities on 13.11.2022. However, the NFAC had not accepted the case of the assessee and held that the filing of Form 67 is mandatory and it should be furnished on or before the due date specified for furnishing the return of income under section 139(1) of the Act. The NFAC also relied on the order of the Vishakapatnam Bench of ITAT in the case of Murali Krishna Vaddi Vs. ACIT [2022] 142 taxmann.com 32 and dismissed the appeal. Against the order of the NFAC, the assessee is before us raising the following grounds: 1. General ground: 1.1 The learne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rn is to be accepted and the variations thereto is to be deleted fully. 4. Prayer: 4.1 Based on the above grounds and other grounds adduced at the time of hearing, the appellant prays that the order passed under section 250 be quashed or in alternative the above grounds and relief prayed thereof be allowed. The appellant prays accordingly. 3. The learned AR at the time of hearing had filed a Paper Book and also the case laws in support of his arguments and prayed to allow the appeal since the intimation was issued after the revised return along with Form 67 was filed before the AO. The ld AR also relied on the order of the coordinated Bench of this Tribunal and the judgement of the Hon'ble High Court of Madras in support of his argument. 4. The learned DR relied on the orders of the Lower Authorities and prayed to dismiss the appeal. 5. We heard the arguments of both sides and perused the materials available on record and also the case laws and Paper Book filed by the assessee. As seen from the records, the assessee filed the revised return on 28.03.2022 and claimed the FTC earned by the company as per sections 90/91 of the Act by filing Form 67. Thereafter, the return was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 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 subsection (1) of section 139, in the manner specified for furnishing such return of income." 4. The Assessee claimed FTC of Rs. 4,73,779/- u/s. 90 of the Act read with Article 24 of India Australia tax treaty ("DTAA") in a revised return of income filed on 31.8.2018. The Assessee had not filed the Form 67 before filing the return of incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o 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 non-compliance 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, such rules may provide for all or any of the following matters:- (ha) the procedure for granting of relief or deduction, as the case may be, of any income-tax paid in any country or specified territory outside India, under section 90 or section 90A or section 91, against the income-tax payable under this Act;" 9. It was submitted that the Bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vant. 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 80IA(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 on the following cases: CIT vs Axis Computers (India) (P.) Ltd [2009] 178 Taxman 143 (Delhi) PCIT, Kanpur vs Surya Merchants Ltd [2016] 72 com 16 (Allahabad) CIT, Central Circle vs American Data Solutions India (P.) Ltd [2014] 45 com 379 (Karnataka) CIT-II vs Mantec Consultants (P.) Ltd [2009] 178 Taxman 429 (Delhi) CIT vs ACE Multitaxes Systems (P.) Ltd [2009] 317 ITR 207 (Ka ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d (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 regard. 17. In the result, the appeal is allowed." 7. The aforesaid decision has also been followed by a Division Bench of ITAT Surat Bench in the case of Sanjay Patil Vs Assessing Officer (ITAT Surat) ITA No.189/SRT/2021 Order dated 18/05/2022. Following the view expressed in the aforesaid decision, we hold that the assessee is entitled to FTC and the AO is directed to allow the claim. The decision rendered by the ITAT Visakapatnam Bench in ITA No.269/Viz/202 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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