Case Law Details
Ashok Madhav Rao Vs ADIT (ITAT Mumbai)
In this case only reason why the foreign tax credit was denied to the assessee is that the assessee submitted the certificate of his employer and without submitting any detail of the payment of taxes in Netherlands. Now, we find that claim of the assessee is now supported by the letter dated 26th March, 2019 by the Dutch Tax authorities. The assessee has submitted the English translation. I find that the employer has deducted whatever tax has been held to be correct by that authority. Even otherwise, the form no. 67 furnished by the assessee also clearly shows what is the amount of salary received by him from Netherlands and what is the amount of withholding tax paid by him through his employers in Netherlands. Now the fiscal report 2017 on behalf of the assessee is also available which is also placed at page no.30 to 37 of the Paper Book. Therefore, there is no doubt that assessee has paid tax in Netherlands and assessee is entitled to deduction of such tax under Section 90 of the income tax Act. The only dispute is with respect to the quantum of deduction. The assessee has clearly submitted that now there is an assessment by Dutch tax authorities and correct tax paid therein is available. In view of this, we direct the learned Assessing Officer to grant credit of Dutch tax paid by the assessee after proper verification and obtaining necessary information from the assessee. Accordingly, the appeal of the assessee is allowed with above direction.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
01. This appeal is filed by the assessee against the appellate order passed by the National Faceless Appeal Centre, Delhi dated 26th March, 2022 for A.Y. 2018-19, wherein the appeal filed by the assessee against the order dated 13th January, 2021 passed under Section 143(1) of the Income-tax Act, 1961 (the Act) by the Central Processing Centre for not granting foreign tax credit of ₹6,51,760/-, was dismissed.
02. Assessee aggrieved by the same has preferred this appeal raising following grounds of appeal:-
“1. Not considering revised statement of total income
1.1 The learned CIT (A) has erred in not considering the revised statement of total income submitted on 18 February 2021.
1.2 The learned CIT (A) failed to appreciate that the revision was on account of subsequent filing of income-tax return in Netherlands for the Calendar year 2017.
1.3 The learned CIT (A) powers are co-terminus with that of the income-tax officer and hence CIT (A) has all the powers which the subordinate authority may have in the matter. Accordingly, the Hon’ble CIT (A) ought to have considered the request of the appellant to compute the total income and income-tax liability for the captioned assessment year as the revised statement of total income.
2. Relief u/s. 90 of the Act denied
2.1 The learned CIT (A) erred in confirming the order of CPC, Bengaluru denying the relief claimed under section 90 of the Act.
2.2 The learned CIT(A) erred in denying the relief on the ground that the appellant has not provided evidence of tax paid or deducted along with Form 67 as laid down in Rule 128 of Income-tax Rules 1962.
2.3 The learned CIT(A) erred in not appreciating the fact that the Appellant has filed Form 67 along with a declaration from employer certifying the nature of income and amount of tax deducted there from which is in accordance with clause (b) of Rule 128(8) of the Income-tax Rules, 1962.
2.4 Without prejudice to the above, the learned CIT (A) erred in not granting an opportunity to the appellant to submit the evidence of tax paid or deducted.
2.5 Without prejudice to the above, the learned CIT (A) erred in not appreciating that submission of Form 67 is a procedural requirement and based on the substantive provisions of the Act read with the DTAA, the appellant should be eligible to claim relief of tax paid in Netherlands.
2.6 Without further prejudice, the appellant submits that he has complied with the procedural requirement and if there is any defect therein, the appellant should be provided an opportunity to remedy the defect.
3. Relief u/s. 90 of the Act- Revised Form 67 not considered.
3.1 without prejudice to the above, the learned CIT (A) erred in granting relief under section 90 of the Act of INR 3,09,611 as claimed by the Appellant in the revised statement of total income submitted on 18 February 2021.
4. General
4.1 Each one of the above grounds of appeal is without prejudice to the other.”
03. The brief fact of the case shows that assessee is an individual citizen of India. For A.Y. 2018-19, the assessee was on deputation to Netherlands by his employer. During the year, assessee is a resident and ordinarily resident. Therefore, the income earned by the assessee from Netherlands is chargeable to tax in India. The assessee filed his return of income on 30th August, 2018, which was revised on 30th March, 2019. In the revised return of income assessee declared the salary received in Netherlands and claimed relief under Section 90 of the Income-tax Act, 1961 (the Act) to ₹6,51,760/-. The same was denied to the assessee as per assessment order passed under Section 143(1) of the Act on 13th January, 2021.
04. The assessee aggrieved with the same preferred the appeal before the learned CIT (A). The learned CIT (A) noted that assessee has filed form no.67 in which tax credit of ₹6,51,760/- was claimed. Subsequently, form no. 67 was revised in view of refund of tax received in Netherlands. The tax credit was revised at ₹3,09,611/-. The learned CIT (A) after quoting the provisions of Rule 128 of the Income-tax Act, held that on perusal of form no.67, which was not signed by the appellant, no acknowledgement of online payment or bank counter file or challans for payment of tax made by him in Netherlands was furnished. Assessee also did not furnish proof of deduction of tax and where such tax is deducted. The assessee has merely furnished the certificate from his employer who certified that the tax liability of the assessee was paid in Netherlands. Therefore, he did not find any reason to interfere with the order of the Central Processing Centre which did not allow tax credit under Section 90 of the Act. Thus, the order of the Central Processing Centre was confirmed. The assessee aggrieved with that order has preferred the appeal before us.
05. The learned Authorized Representative and the learned Departmental Representative were heard. A paper book containing 48 pages submitted by the assessee was also perused along with the orders of the lower authorities.
06. The facts clearly show that only reason why the foreign tax credit was denied to the assessee is that the assessee submitted the certificate of his employer and without submitting any detail of the payment of taxes in Netherlands. Now, we find that claim of the assessee is now supported by the letter dated 26th March, 2019 by the Dutch Tax authorities. The assessee has submitted the English translation. I find that the employer has deducted whatever tax has been held to be correct by that authority. Even otherwise, the form no.67 of furnished by the assessee also clearly shows what is the amount of salary received by him from Netherlands and what is the amount of withholding tax paid by him through his employers in Netherlands. Now the fiscal report 2017 on behalf of the assessee is also available which is also placed at page no.30 to 37 of the Paper Book. Therefore, there is no doubt that assessee has paid tax in Netherlands and assessee is entitled to deduction of such tax under Section 90 of the income tax Act. The only dispute is with respect to the quantum of deduction. The assessee has clearly submitted that now there is an assessment by Dutch tax authorities and correct tax paid therein is available. In view of this, we direct the learned Assessing Officer to grant credit of Dutch tax paid by the assessee after proper verification and obtaining necessary information from the assessee. Accordingly, the appeal of the assessee is allowed with above direction.
07. In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 19.12.2022.
