๐๐ป๐ฐ๐ผ๐บ๐ฒ ๐ง๐ฎ๐ ๐ง๐ฟ๐ถ๐ฏ๐๐ป๐ฎ๐น ๐ข๐ฟ๐ฑ๐ฒ๐ฟ ๐ผ๐ป ๐ฑ๐ถ๐๐ฎ๐น๐น๐ผ๐๐ฎ๐ป๐ฐ๐ฒ ๐ผ๐ณ ๐๐ผ๐ฟ๐ฒ๐ถ๐ด๐ป ๐ง๐ฎ๐ ๐๐ฟ๐ฒ๐ฑ๐ถ๐
๐๐ฒ๐ ๐๐๐๐๐ฒ๐:
1. Denial of Foreign Tax Credit (FTC) due to procedural non-compliance (late filing of Form 67).
2. Whether FTC can be disallowed purely based on delay in filing Form 67.
3. Application of Double Taxation Avoidance Agreement (DTAA) between India and Thailand.
๐๐ฎ๐ฐ๐๐ ๐ผ๐ณ ๐๐ต๐ฒ ๐๐ฎ๐๐ฒ:
โข The appellant earned income in both India and Thailand in AY 2019-20.
โข He filed his return of income on August 27, 2019, claiming Foreign Tax Credit.
โข FTC was denied because Form 67 was filed on April 8, 2021, after the due date for filing the return.
โข Appeals to the Assessing Officer (AO) and the Commissioner of Income Tax (Appeals) [CIT(A)] were dismissed on procedural grounds.
๐๐ฝ๐ฝ๐ฒ๐น๐น๐ฎ๐ป๐’๐ ๐๐ฟ๐ด๐๐บ๐ฒ๐ป๐๐:
1. DTAA provisions override the Income Tax Act and Rules when more beneficial to the Assessee.
2. Filing Form 67 is procedural, not substantive, and cannot bar the claim ofย Foreign Tax Credit.
3. The appellant cited judicial precedents emphasizing that procedural lapses should not extinguish substantive rights.
4. Natural justice principles and avoidance of double taxation should apply.
๐ง๐ฟ๐ถ๐ฏ๐๐ป๐ฎ๐นโ๐ ๐๐ถ๐ป๐ฑ๐ถ๐ป๐ด๐:
1. DTAA Supremacy: The provisions of DTAA override Income Tax Act rules, including Rule 128, if more beneficial to the taxpayer.
2. Procedural Nature of Form 67: Filing Form 67 is a directory, not mandatory, requirement. Non-compliance with procedural norms does not nullify the substantive right to claim FTC.
3. No Double Taxation: Denial of FTC would result in double taxation, contrary to the principles of DTAA and CBDT Circular No. 14 (1955).
๐ง๐ฟ๐ถ๐ฏ๐๐ป๐ฎ๐นโ๐ ๐๐ฒ๐ฐ๐ถ๐๐ถ๐ผ๐ป:
โข The Tribunal allowed the appeal and directed the Assessing Officer to grant FTC as per the DTAA between India and Thailand.
โข The delay in filing Form 67 was deemed a procedural lapse that does not affect the substantive right to claim FTC.
๐๐ผ๐ป๐ฐ๐น๐๐๐ถ๐ผ๐ป:
The Income Tax Appellate Tribunal ruled in favor of the taxpayer, emphasizing the primacy of DTAA provisions and the directory nature of procedural requirements like Form 67 filing. This decision reinforces the principle that substantive rights cannot be denied due to procedural lapses.
The copy of the order is as under:
