Anindya Sarkar Vs Assistant Director of Income Tax (ITAT Kolkata)
Income Tax Appellate Tribunal (ITAT) Kolkata ruled in favor of Anindya Sarkar, an individual taxpayer, in his appeal against the Assistant Director of Income Tax, CPC, Bengaluru, regarding the denial of Foreign Tax Credit (FTC) for Assessment Year 2020-21. Sarkar, who worked for a Singapore-based company, had declared income earned in Singapore and paid taxes there, seeking relief under the Double Taxation Avoidance Agreement (DTAA) between India and Singapore. However, his FTC claim was denied because Form 67, a mandatory document for such claims, was filed after the due date prescribed under Section 139(1) of the Income Tax Act. His rectification requests under Section 154 were also rejected, leading to a tax demand of ₹17,71,860. The CIT(A) upheld the tax department’s stance, stating that the delay in filing Form 67 made the claim legally non-est.
Sarkar appealed to ITAT Kolkata, arguing that DTAA provisions override domestic tax laws, making the FTC claim a vested right that should not be denied due to procedural delays. The tribunal considered judicial precedents, including Mahua Bagchi Vs. ACIT and Deepak Shimoga Padmaraju Vs. ADIT, which supported the view that procedural lapses should not deprive a taxpayer of benefits under DTAA. ITAT ruled in favor of the assessee, directing the tax authorities to allow the FTC claim as per the India-Singapore DTAA. This decision reinforces that DTAA provisions prevail over domestic filing requirements, ensuring taxpayers are not unfairly penalized for procedural delays.
