Case Law Details
Satishkumar Ekambaram Vs ITO (ITAT Chennai)
The case of Satishkumar Ekambaram Vs ITO before the ITAT Chennai involved an appeal concerning the allowance of Foreign Tax Credit (FTC) for the Assessment Years (AY) 2018-19 and 2019-20. The issue centered on the denial of FTC claimed by the assessee due to the late filing of Form 67, a mandatory document for claiming FTC under Section 90 of the Income Tax Act. For AY 2018-19, the assessee initially filed a return without claiming FTC of ₹9.59 lakhs, but later filed a revised return along with Form 67. However, the Centralized Processing Centre (CPC) denied the claim on the grounds that Form 67 was submitted after the due date, and the CIT(A) upheld this denial, citing that Form 67 must be filed along with the original return as per Rule 128(9) of the Income Tax Rules.
The ITAT, however, considered a similar case in ITO vs. Smt. Chengam Durga (ITA No.1491/Chny/2023) and a Madras High Court ruling in Duraiswamy Kumaraswamy (WP No.5834 of 2022), where it was held that the requirement to file Form 67 with the original return was directory, not mandatory. The tribunal emphasized that the rule’s purpose was to facilitate the implementation of the provisions, and non-compliance with the filing deadline should not automatically disqualify the FTC claim. Following this precedent, the ITAT directed the CIT(A) to allow the FTC claim after verifying the late-filed Form 67. The same reasoning was applied to the appeal for AY 2019-20, and both appeals were allowed for statistical purposes, with the final order pronounced on November 4, 2024.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
1. Aforesaid appeals by assessee for Assessment Years (AY) 2018- 19 & 2019-20 have identical issue i.e., allowance of foreign tax credit (FTC). At the time of hearing, none appeared for assessee and accordingly, the appeals were heard with the able assistance of departmental representative.
2. The appeal for AY 2018-19 arises out of an order passed by Learned Addl. /Joint Commissioner of Income Tax (Appeals)-1, Jaipur, [CIT(A)] on 06-06-2024 in the matter of an intimation issued by CPC, Bengaluru u/s 143(1) on 10-06-2020 denying Foreign Tax Credit of 9.59 Lacs as claimed by the assessee u/s 90. The same was denied for want of filing of requisite Form 67 along with return of income u/s 139(1). Aggrieved, the assessee is in further appeal before us.
3. It emerges that the assessee filed original return of income on 30- 08-2019 but it did not claim FTC of Rs.9.59 Lacs. The assessee revised return of income on 31-03-2019 and filed Form No. 67 on 30-03-2019. The ITR was processed by CPC and credit was not allowed since Form No.67 was filed belatedly. The Ld. CIT(A) confirmed the action of CPC since this claim was not made in the original return of income. As per Rule 128(9), this form was required to be furnished along with return of income u/s 139(1). Aggrieved, the assessee is in further appeal before
4. We find that the issue of foreign tax credit is covered in assessee’s favor by the decision of this Tribunal in the case of ITO vs. Smt. Chengam Durga (ITA No.1491/Chny/2023 dated 08-04-2024). The bench, considering the decision of Hon’ble High Court of Madras in the case of Duraiswamy Kumaraswamy (WP No.5834 of 2022 & ors. order dated 06.10.2023), held that filing of this form in terms of Rule 128 was only directory in nature. The rule is only for the implementation of the provisions of the act and it would always be directory in nature. Respectfully following the same, we direct Ld. CIT(A) to grant impugned Foreign Tax Credit to the assessee after verifying Form No.67.
5. Since facts as well as issue in AY 2019-20 are pari-materia the same, our adjudication as above shall apply mutatis-mutandis to this year also.
6. Both the appeals stand allowed for statistical purposes.
Order pronounced on 04th November, 2024.
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