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TMI Blog2024 (9) TMI 1656X X X X Extracts X X X X X X X X Extracts X X X X ..... w. 3. Holding that the delay in filing of appeal cannot be condoned, without providing any reasons. 4. Concluding that there is no "sufficient cause" for delay, without appreciating the facts and circumstances. 5. Not appreciating that the delay in filing of appeal was not deliberate, malafide or intentional, but due to a bonafide belief and reasonable cause. 6. Not appreciating that the Appellant would be put to undue injustice for a mistake or oversight on the part of her advisors. 7 Without prejudice to the above, not deciding the appeal on merits, inspite of issuing notices in respect of the issue under consideration and not allowing grant of tax credit in respect of the taxes withheld on the foreign income earned by the Appellant and claimed in accordance with u/s 90 of the Act and Article 23 of the India-Srilanka DTAA. 8 Not allowing carry forward of losses claimed by the Appellant in the return of income. 9. Levying interest u/s 234B and 234C of the Act. The grounds mentioned above are independent and without prejudice to the other grounds preferred by the Appellant. The Appellant craves leave to add, alter, vary, substitute or amend the above grounds of appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent to him for necessary action. The tax consultant had filed a request for rectification of the same and the assessee was under the impression that the Chartered Accountant was taking care of the same and therefore, an appeal was not filed against the rectification order. The assessee appointed a new tax consultant who brought this fact of non-filing of the appeal to her notice. The assessee was made aware of the order and consequent demand when the same was brought to her notice. Since, the petitioner was not aware earlier of the order nor of the demand, no appeal was filed against the order in time. It is stated that the petitioner is a law-abiding citizen and had always paid her taxes in time and the delay in filing the appeal was not deliberate nor intentional but was due to the bona fide belief and reasonable cause and the assessee prayed that the delay in filing the appeal may be condoned in the interest of justice. The ld. CIT(A) perused the reason and rejected the application for condonation of delay and dismissed the appeal. 7. Aggrieved by the said appeal order, the assessee has preferred the present appeal before us. 8. We have heard the rival contentions. The Ld. Sr. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been held as under: "9. The only issue in this case is non-allowance of the credit for the foreign tax paid in Bhutan. Before proceeding further, we would like to reproduce rule 128 of the Income-tax Rules, 1962 (the Rules) which relates with foreign tax credit as under: "Foreign Tax Credit. 128. (1) An assessee, being a resident shall be allowed a credit for the amount of any foreign tax paid by him in a country or specified territory outside India, by way of deduction or otherwise, in the year in which the income corresponding to such tax has been offered to tax or assessed to tax in India, in the manner and to the extent as specified in this rule: Provided that in a case where income on which foreign tax has been paid or deducted, is offered to tax in more than one year, credit of foreign tax shall be allowed across those years in the same proportion in which the income is offered to tax or assessed to tax in India" 10. We further note that section 90 of the Act provides that Government of India can enter into Agreement with other countries for granting relief in respect of income on which taxes are paid in country outside India and such income is also taxable in India. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on or before the due date of filing the return of income as prescribed u/s 139(1) of the Act. However, the rule nowhere provides that if the said Form No. 67 is not filed within the required time frame, the relief as sought by the assessee u/s 90 of the Act would be denied. It is therefore evident that if the intention of the legislature were to deny the foreign tax credit, either the Act or the rules would have specifically provided that the foreign tax credit would be disallowed if the assessee does not file Form No. 67 within the due date prescribed under section 139(1) of the Act. We further note that Filing of Form No. 67 is a procedural/directory requirement and is not a mandatory requirement and violation of procedural norm does not extinguish the substantive right of claiming the credit of FTC. The following decisions support the claim of the assessee: i. CIT vs. G.M. Knitting Industries (P) Ltd. 71 Taxmann.com 35(SC) ii. Brinda Ramakrishna vs. ITO 193 ITD 840 (Bang.) iii. 42 Hertz Software India Pvt. Ltd. vs. Asst. CIT, Ita No. 29/Bang/2021 iv. Duraiswamy Kumaraswamy vs. PCIT, W.P No. 5834 of 2022 13. Hon'ble Supreme Court, in the case of Mangalore Chemicals & F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat DTAA overrides the provisions of the Act and the Rules, as held by various High Courts, which has also been approved by Hon'ble Supreme Court in case of Engineering Analysis Centre of Excellence (P.) Ltd. reported in (2021) 432 ITR 471. 8. We accordingly, hold that FTC cannot be denied to the assessee. Assessee is directed to file the relevant details/evidences in support of its claim. We thus remand this issue back to the Ld.AO to consider the claim of assessee in accordance with law, based on the verification carried out in respect of the supporting documents filed by assessee. 16. In Vikash Daga Vs ACIT Circle - 3 (1) Gurgaon ITA No. 2536/Del/2022, the ITAT DELHI BENCH 'H', NEW DELHI vide order dated 14/06/2023 have held that: 8. We have given a thoughtful consideration to the orders of the authorities below. The undisputed fact is that the assessee holds a foreign tax credit certificate for Rs. 1887114/-. In our considered opinion filing of form 67 is a procedural / directory requirement and is not a mandatory requirement. Therefore, violation of procedural norms does not extinguish the substantive right of claiming the credit of FTC. We accordingly direct the AO to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered Page 6 of 8 ITA No. 337/Hyd/2023 opinion that the decisions relied upon by the assessee are applicable to the facts of the case and the grounds raised by the assessee are accordingly allowed. 14. In the result, appeal of the assessee is allowed. 18. We have also gone through the decision of the Hon'ble Madras High Court in the case of Duraiswamy Kumaraswamy vs. PCIT (supra) and find that the facts are identical to the facts of the case of the assessee and the decision is squarely applicable to the facts of the case of the assessee. In that case, the petitioner was resident of India and had filed Indian ITR and claimed benefit of FTC u/s 90/91 of the Act r.w. Article 24 of the India-Kenya DTAA. During the year, he had income of both Kenya and India but while filing the Indian ITR for the impugned assessment year 2019-20, the Form No. 67 prescribed in rule 128 of the rules for claiming FTC was inadvertently not uploaded along with the ITR which was uploaded on 02.02.2021. The return was processed on 26.03.2021, however, the credit of FTC was not given effect to and the request made to the CPC to give effect to the FTC was not accepted and intimation along with notices ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt is directed to consider only on the aspect of rejection of FTC claim within a period of 8 weeks from the date of receipt of copy of this order." 19. Respectfully following the order of the Hon'ble Madras High Court in the case of Duraiswamy Kumaraswamy vs. PCIT (supra) and concurring with the views held by the coordinate Benches of the Tribunal (supra), we hold that merely because the assessee could not file Form No. 67 within the prescribed time limit as per the provisions of rule 128(9) of the Income-tax rules, 1962, as it stood during the year under consideration, will not preclude the assessee from claiming the benefit of foreign tax credit in respect of taxes paid outside India. Therefore, the claim of the assessee is allowed and the Assessing Officer is directed to give benefit of foreign tax credit in respect of tax paid outside India by the assessee in accordance with law and the DTAA between India and the Bhutan. Since in the instant case the assessee had filed Form No. 67 along with the return of income filed u/s. 139(4) of the Act, the foreign tax credit was allowable. The AO is directed to allow the credit in accordance with the provisions of section 90 read with D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o affect their general character; or (b) any agreement entered into under section 17 of the Greater Colombo Economic Commission Law No. 4 of 1978; or (c) any other provisions which may subsequently be made granting an exemption or reduction of tax which is agreed by the competent authorities to be of a substantially similar character, if it has not been modified thereafter or has been modified only in minor respects so as not to affect its general character. 4. Subject to the provisions of the law of Sri Lanka regarding the allowance as a credit against Sri Lanka tax of tax payable in a territory outside Sri Lanka (which shall not affect the general principle hereof) Indian tax payable under the law of India and in accordance with the Convention, whether directly or by deduction, on profits, income or chargeable gains from sources within India (excluding in the case of a dividend, tax payable in respect of the profits out of which the dividend is paid) or capital in India shall be allowed as a credit against any Sri Lanka tax computed by reference to the same items of income or capital by reference to which the Sri Lanka tax is computed: Provided that such credit shall not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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