INCOME TAX OFFICER, WARD 4, CUDDALORE V. MURARY SETTY DURGA MOUNIKA, NEYVELI

MA 57/CHNY/2024

AI Insights

The case involves a Miscellaneous Application by the Revenue against the order of the Income Tax Appellate Tribunal which had previously dismissed the Revenue's appeal due to the tax effect being below Rs. 50 lakhs, as per CBDT Circular No. 17/2019. The Revenue contended that the CIT(A) erred in allowing the assessee, Ms. Murary Shetty Durga Mounika, to claim a foreign tax credit of Rs. 2,09,776/- for taxes paid on income earned outside India, which was not initially granted by the AO due to the late filing of Form No. 67. The CIT(A) had reversed the AO's decision, leading to the Revenue's appeal. The Tribunal, however, upheld the CIT(A)'s decision and dismissed the Revenue's appeal without adjudicating on the merits, citing the monetary limit for appeals.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 107023 (ITAT-CHENNAI)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 05-02-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2020-2021
• Other Referred Cases: Ms. Brinda Ramakrishnan Vs. ITO, M/s Jerry Nirmal Francis, Sanjay Patil VS. ITO
• Laws Referred To: Income Tax Act, CBDT Circular No.17/2019, CBDT Circular No.3/2018, Income Tax (27th Amendment) Rules, 2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANITHA
• Assessee Lawyers: PLACING
• Keywords: Revised return; Tax effect
• Section: 143(1); 139(1); 90; 139; 260A

Judgement Text

"आयकर अपीलीय अिधकरण, ‘ए’ \u0001यायपीठ, चे\tई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH: CHENNAI \u0001ी एबी टी. वक , \u000bाियक सद\u0011 क े सम\u0014 BEFORE SHRI ABY T. VARKEY, JUDICIAL MEMBER Miscellaneous Application No.57/Chny/2024 (in ITA No.1217/Chny/2023) िनधा\u000eरण वष\u000e/Assessment Year: 2020-21 The ITO, Ward-4, Cuddalore. v. Ms. Murary Shetty Durga Mounika, 41D, Type-III Quarters, Block 20, Neyveli-607 803. [PAN: CGKPM 9231 K] (अपीलाथ\u0016/Appellant) (\u0017\u0018यथ\u0016/Respondent) Department by : Ms. Anitha, Addl.CIT Assessee by : None सुनवाईक\u001cतारीख/Date of Hearing : 31.01.2025 घोषणाक\u001cतारीख /Date of Pronouncement : 05.02.2025 आदेश / O R D E R PER ABY T. VARKEY, JM: This is an Miscellaneous Application preferred by the Revenue against the order of this Tribunal dated 19.02.2024 in ITA No.1217/Chny/2023 for AY 2020-21. 2. None appeared for the assessee. The Ld.DR for the Revenue assailed the impugned order of this Tribunal by asserting that there is a mistake apparent on the face of the impugned order. According to her, the Ld.CIT(A) has allowed the assessee’s appeal allowing the assessee to claim credit of Rs.2,09,776/- earned outside India from the foreign tax paid. According to the Ld.DR, the Tribunal has dismissed the appeal of MA No.57/Chny/2024 (in ITA No.1217 /Chny/2023) Ms. Murary Shetty Durga Mounika :: 2 :: the Revenue against the action of the Ld.CIT(A) only on the ground that the tax effect in the Revenue appeal was below Rs.50 lakhs relying on the CBDT Circular No.17/2019 dated 08.08.2019. According to the Ld.DR, the Revenue’s case comes within the exceptional clause as per clause (a) Para No.10 of CBDT’s Circular No.3/2018. It would be gainful to look into the petition filed by the Revenue, which is reproduced as under: The assessee, Ms. Murary Shetty Durga Mounika, (CGKPM9231K) filed Return of Income for the AY. 2020-21 on 27-12-2020 declaring a total income of Rs. 33,89,180/-. Later on a Revised Return of Income was filed on 31-05-2021 with total income of Rs.35.60.020/-, along with Form No.67 The Revised Return of Income was processed by the CPC u/s 143(1) and the relief u/s 90 of the Act, being foreign tax paid on the income earned outside India of Rs 2,09,776/, claimed by the assessee, was not given credit, as the assessee did not file the Form No. 67 within the due date ie, along with the Return of Income filed u/s 139(1) of the Act. Aggrieved, the assessee file a rectification petition before the AO and the AO rejected the rectification petition for the reason that the relief sought by the assessee is debatable and thus does not come within the purview of rectification. The assessee filed appeal before the CIT(A) The CIT(A), NFAC, vide Order dated 08-06-2023, allowed the Foreign Tax credit of Rs.2,09,776/- claimed by the assessee u/s 90 of the Act on relying upon the decision of Hon'ble ITAT, Bangalore in the case of Ms. Brinda Ramakrishnan Vs. ITO in ITA No.454/Bang/2021. The CIT(A), NFAC has also relied upon the decision of Hon'ble ITAT. Chennai in M/s Jerry Nirmal Francis in ITA No.845/Chny/2022 dated 28-02-2023 and the decision of ITAT, Surat in the case of Sanjay Patil VS. ITO in ITA No. 189/SRT/2021 dated 18-05-2022 Against the order of the CIT (A), the Revenue filed appeal before the ITAT by invoking the exceptional clause viz. clause (a) of para 10 of CBDT's Circular No. 03/2018 with the following Grounds of appeal 1 The Order of the Ld. CIT(A) is contrary to law and facts and circumstances of the case. 2. The Ld CIT(A) erred in holding that filing of Form No.67 cannot be treated as mandatory, rather a is directory in nature by placing reliance upon the decision of Hon'ble ITAT, Bangalore in the case of Ms Brinda Ramakrishnan Vs ITO in ITA No 454/Bang/2021 3. The Ld CIT(A) erred in allowing relief to the assessee by placing reliance on the ITA No.454/Bang/2021 Whereas it is settled law that power of condonation of the CBDT/Central Government cannot be taken away by any another person, MA No.57/Chny/2024 (in ITA No.1217 /Chny/2023) Ms. Murary Shetty Durga Mounika :: 3 :: The Hon'ble ITAT, Chennai vide its Order in ITA No 1217/Chny/2023, dated 19-02-2024 has dismissed the appeal of the Revenue on the grounds that the tax effect is below Rs 50 lakhs, less than the monetary limit as prescribed in CBDT Circular No. 17/2019, dated 08-08-2019 The Hon'ble ITAT did not adjudicated the appeal on merit. It is pertinent to mention that the Revenue's appeal was filed by invoking the exceptional clause as per para 10, clause (a) of CBDT's Circular No 3/2018. As per the Rule 128(9) of the Income Tax Rules (prior to the substitution by twenty seventh Amendment Rules, 2022 which came into effect from 01-04-2022) the filing of FormNo 67 is required to be done on or before furnishing of the Return of Income u/s 139(1) of the Act The relevant Rule prior to substitution and post substitution are as under Prior to substitution (9) The statement in Form No.67 referred to in clause (i) of sub-rule(8) and the certificate or the statement referred to in clause (ii) of sub-rule (8) shall be furnished on or before the due date specified for furnishing the return of income under sub-section (1) of section 139 in the manner specified for furnishing such return of income. Post substitution (9) The statement in Farm No.67 referred to in clause (i) of sub-rule(8) and the certificate or the statement referred to in clause (i) of sub-rule (8) shall be furnished on or before the end of the assessment year relevant to the previous year in which the income referred to in sub-role (1) has been offered to fax or assessed to tax in India and the return of income for such assessment year has been furnished within the time specified under sub-section (1) or sub- section 94) of section 139. From the above it is clear that filing of Form No. 67 is mandatory, but not directory as held by the CIT(A). Also the order of the CIT(a) is against the principle of Sententia legis, as in the Rule 128(9) the word shall is used, which shows that the true intention of the legislature was to make it mandatory, furthermore there is no ambiguity in the language of the said rule. Hence, the Order of the CIT(A) is contrary to law. It is pertinent to mention that the Form No 67 is a statutory Form and as per law, all the statutory forms needs to be submitted within the time allowed in statue. Thus the order of the CIT(A) invokes the exceptional clause as per para 10, clause (a) of CBDT's Circular No 3/2018 wherein the \"Constitutional validity of the provisions of an Act or Rule is under challenge\". Hence, in the view of the above facts and circumstances the Order of the CIT(A) is not acceptable. Further, as the case was not adjudicated on merit, there is no scope to file further appeal u/s 260A of the IT Act. In this background, the above said facts are submitted for the consideration of the Hon'ble ITAT This Miscellaneous Petition is filed to highlight the facts and for further directions MA No.57/Chny/2024 (in ITA No.1217 /Chny/2023) Ms. Murary Shetty Durga Mounika :: 4 :: The Hon'ble ITAT may admit this Miscellaneous Petition and may pass orders which it deems fit under the circumstances, it may warrant. 3. After hearing the Ld.DR and going through the contents of the Miscellaneous Application filed by the Revenue against the impugned action of the Tribunal dated 19.02.2024, I am not convinced that there is a mistake apparent on the face of the record to interfere with the impugned action of this Tribunal though dismissing it on the ground that tax effect in this case is below Rs.50 lakhs. The issue agitated by the Revenue was against the First Appellate Authority’s direction to the AO to give credit of Rs.2,09,776/- on the foreign tax paid by assessee on the income earned outside India. After going through the records of the case, I am of the view that the Ld.CIT(A)/NFAC while passing the First Appellate order dated 08.06.2023 has rightly relied on the order of this Tribunal in the case of Jerry Nirmal Francis [in ITA No.846/Chny/2022 dated 08.02.2023] following the Bangalore Tribunal order in the case of Ms. Brinda Ramakrishna vs. ITO in ITA No.454/Bang/2021, wherein it was held that when the assessee has filed Form 67 on or before due date for filing of return of income u/s.139(4) of the Act, the AO ought to have considered the said form and allowed credit for tax paid in the other countries. Such an interpretation given by this Tribunal has been later recognized by the Union of India by amending Rule 128(9) of the Income Tax (27th Amendment) Rules, 2022, which allows furnishing of Form 67 before the time specified under sub-section (1) or (4) of section 139 of MA No.57/Chny/2024 (in ITA No.1217 /Chny/2023) Ms. Murary Shetty Durga Mounika :: 5 :: the Act albeit w.e.f.01.04.2022. Therefore, the impugned action of the Ld.CIT(A) dated 08.06.2023 in the assessee’s case for AY 2020-21, doesn’t suffer from any infirmity; and permitting restoration of the Appeal will be abuse of the process of the Court and would be a futile exercise; and keeping in mind the policy of the Union of India, to reduce litigation, I am not inclined to recall the impugned order finding no merit in the contention of the Revenue and therefore, Miscellaneous Application stands dismissed. 4. In the result, Miscellaneous Application filed by the Revenue is dismissed. Order pronounced on the 05th day of February, 2025, in Chennai. Sd/- (एबी टी. वक ) (ABY T. VARKEY) \u0001याियक सद\bय/JUDICIAL MEMBER चे\tई/Chennai, !दनांक/Dated: 05th February, 2025. TLN, Sr.PS आदेश क\u001c \u0017ितिलिप अ$ेिषत/Copy to: 1. अपीलाथ\u0007/Appellant 2. \b\tथ\u0007/Respondent 3. आयकरआयु\u000f (अपील)/CIT(A) 4. आयकरआयु\u000f/CIT, Chennai / Madurai / Salem / Coimbatore. 5. िवभागीय\bितिनिध/DR 6. गाड\u0018फाईल/GF "