Delay in filing the form to claim the credit, ITAT allows the benefit of credit to Actress Sonakshi Sinha 

Here is n interesting case before ITAT Mumbai on the eligibility of benefit of there is a delay in filing the form. The case is as under:

 

Sonakshi Sinha (ITA No. 1704/Mum/2022)

 

Facts:

1. The CIT (A), National Faceless Appeal Centre (NFAC) has not disputed the allowability of the foreign tax credit to the assessee. He has however disallowed the foreign tax credit on the ground that form 67 has not been filed on or before the due date of filing of return of income as per rule 128 (9) of the income tax rules, 1962.

 

2. The assessee has uploaded form number 67 for claiming foreign tax credit in respect of income earned in United Kingdom on 20/1/2020. However, the assessee has filed her return of income on 22/09/2018, within the due date as per the provisions of Section 139 (1).

 

3. The assessee claimed that filing of form number 67 is a procedural requirement and not mandatory for claiming of the foreign tax credit.

 

ITAT Mumbai held as below:

1. Rule 128(9), which provides for filing of Form No. 67, does not provide for disallowance of FTC in case of delay in filing the same.

 

2. It is well settled that while laying down a particular procedure, if no negative or adverse consequences are contemplated for non-adherence to such procedure, the relevant provision is normally not taken to be mandatory and is considered to be purely directory.

 

3. Here it is not the case of violation of any of the provisions of the Act but of the Rule, which does not provide for any consequence, if not complied with.

 

4. It is held that, the assessee is eligible for foreign tax credit, as she has filed Form Number 67 before completion of the assessment, though not in accordance with rule 128 (9) of The Income Tax Rules.