Case Law Details
Shridhar Madhav Diwan Vs DCIT (ITAT Hyderabad)
The Income Tax Appellate Tribunal (ITAT), Hyderabad recently addressed the case of Shridhar Madhav Diwan Vs DCIT. The primary issue in contention was the denial of foreign tax credit (FTC) to the assessee due to the late filing of the return of income (ROI) and the subsequent Form No. 67. The tribunal directed the case for re-adjudication, despite clear guidelines in Rule 128(9) of the Income Tax Rules.
According to Rule 128(9), to claim FTC, a taxpayer must file the statement of foreign tax deduction in Form No. 67 on or before the due date for filing the return. However, the assessee filed Form No. 67 late, leading to the denial of FTC. The assessee contended that Rule 128(9) does not explicitly provide for disallowance of FTC in case of delayed filing, and hence, it should be considered a directory requirement rather than a mandatory one. The tribunal, after examining previous relevant cases and the provisions of DTAA, concluded that Rule 128(9) should be interpreted in line with the DTAA provisions.
The ITAT, in line with the principles of the India-USA Double Taxation Avoidance Agreement (DTAA), directed the Assessing Officer to verify the details of the foreign tax paid by the assessee and take a decision in conformity with the established law. This ruling may set a precedent for other cases where the late filing of Form No. 67 is in question, providing reassurance to assessees regarding their right to claim FTC.
FULL TEXT OF THE ORDER OF ITAT HYDERABAD
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