Isha Mago Vs ADIT (ITAT Delhi)
In the appeal of Isha Mago vs. ADIT (Income Tax Appellate Tribunal, Delhi), the primary issue concerned the disallowance of foreign tax credit (FTC) by the CPC and subsequently upheld by the CIT(A), due to the assessee’s late filing of Form 67 in relation to the assessment year 2018-19. Here’s a comprehensive summary of the case:
Background: The assessee filed an appeal against the order of the CIT(A), National Faceless Appeal Centre (NFAC), Delhi, dated 20th November 2023, which affirmed the CPC’s decision to disallow FTC amounting to Rs. 6,64,166/- on the grounds of late filing of Form 67. The CPC, in its intimation under section 143(1) of the Income-tax Act, 1961, disallowed the claim as Form 67 was filed after the due date for filing the return under section 139(1) of the Act.
Grounds of Appeal:
- The assessee contended that the CIT(A) erred in law and in fact by upholding the disallowance of FTC solely on the ground of late filing of Form 67.
- It was argued that the filing of Form 67 beyond the due date was a procedural requirement and not a mandatory one, and thus, should not lead to the denial of substantive rights.
- The appeal also raised objections against the denial of credit for Indian TDS without sufficient reasoning.
Arguments Before ITAT: The counsel for the assessee argued that the issue had already been settled in favor of the assessee by previous decisions of the ITAT, specifically citing the cases of Vikas Daga vs. ACIT (ITA no. 2536/Del/2022) and Eastman Industries Ltd. vs. ACIT (ITA nos. 2990, 2991 & 2992/Del/2022). These cases established that the filing of Form 67 should be viewed as a procedural or directory requirement rather than a mandatory one. The counsel emphasized that such procedural lapses should not override substantive rights to claim FTC, especially considering the provisions of the Double Tax Avoidance Agreement (DTAA) which prevail over domestic procedural rules.
