Sanjay Patil Vs Assessing Officer (ITAT Surat)
ITAT held that Assessee has vested right to claim Foreign Tax Credit (FTC) under the tax treaty, the same cannot be disallowed for mere delay in compliance of a procedural provision, that is ‘delay in filing Form No.67’.
FULL TEXT OF THE ORDER OF ITAT SURAT
Captioned appeal filed by the assessee, pertaining to Assessment Year (AY) 2018-19, is directed against the order passed by the National Faceless Appeal Centre (NFAC)/Ld. CIT(A) in Appeal No. ITBA/NFAC/S/250/2021-22/1034917066(1) dated 17.08.2021, which in turn arises out of an assessment order passed by the Assessing Officer under section 143(1) of the Income Tax Act, 1961 [hereinafter referred to as the “Act”].
2. The grounds of appeal raised by the assessee are as follows:
“1.On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in confirming the action of the Ld. Assessing Officer, CPC (Ld. AO) of making the adjustment in the Intimation under Section 143(1) of the Act of not allowing Foreign Tax Credit (“FTC”) of Rs.3,93,063 allowing as per Section 91 of the Income-tax Act, 1961 (‘Act’).
It is prayed that the Ld. Assessing Officer be directed to grant the FTC of Rs.3.93.063.
2.On the facts and circumstances of the case and in law, the Ld. CIT(A) ought to have held that the non-grant FTC of Rs.3,93,063 is not a permissible adjustment under section 143(1) of the Act.
It is prayed that the ld assessing officer be directed to allow the FTC of Rs.3,93,063/-
The assessee craves leave to add, amend, alter, substitute, withdraw all or any of the above Grounds of Appeal anytime either before or during the hearing of the Appeal.”
3. Succinct facts are that Assessee is an individual taxpayer. During the year under consideration, the Assessee was employed with Shell India Markets Private Limited from l April 2017 to 30 November 2017. Thereafter, he was sent on a long-term assignment to Iraq where he was employed with Shell Gas Iraq B.V (‘Shell Iraq’) from December 2017 to 31 March 2018 during the year under consideration. As per the applicable tax laws in Iraq, taxes on salary income earned in Iraq were deposited with the Iraq tax authorities for the abovementioned period. For the assessment year 2018-19, the Assessee was a Resident and Ordinarily Resident (‘ROR’) in India. Accordingly, global income of the Assessee inclusive of salary income from Iraq was taxable in India. The Assessee had filed his original return of income under section 139(1) of the Income Tax Act, 1961 (‘the IT Act’) on 6 August 2018 in India declaring total income of Rs.77,09,060/-. Thereafter, the Assessee filed his revised return of income on 20th March, 2019 declaring total income of Rs.83,69,190/- and claiming the Foreign Tax Credit (‘FTC’) of Rs.3,93,063/- with respect to taxes paid in Iraq. The Assessee had e-filed the Form 67 – ‘Statement of Income from a country or specified territory outside India, and Foreign Tax Credit on 16 March 2019 for the purposes of claiming Foreign Tax Credit (FTC). For the sake of convenience, relevant details are tabulated in chronological order as under:
