The Joint Commissioner of Income Tax (OSD), Circle-12, Pune V. Raj Surendra Mohan Hajela, Pune

ITA 470/PUN/2023

AI Insights

The case involves an appeal by the Revenue against the order of the NFAC, which had allowed the respondent-assessee's appeal concerning the denial of foreign tax credit for the assessment year 2021-22. The assessee, a resident and tax resident of the USA, had filed a return claiming a foreign tax credit but initially failed to submit Form No.67 with the return, which was later corrected but still denied by the Central Processing Centre (CPC) due to a clerical error in the assessment year mentioned. The NFAC, after condoning the delay in filing the appeal, ruled in favor of the assessee based on judicial precedents. The Revenue challenged this decision, leading to the current appeal.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 137449 (ITAT-PUNE)
• Duration Of Justice: 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-07-2023
• Appeal Filed By: Department
• Order Result: PartlyAllowed
• Bench Allotted: B
• Next Hearing Date: 20-06-2023
• Assessment Year: 2021-2022
• Appeal Filed On: 23-04-2023
• Laws Referred To: Income Tax Act, 1961, India USA Double Tax Avoidance Agreement
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: MISS PALAK SHAH
• Keywords: Opportunity of being heard; Principle of natural justice; Reasonable cause
• Section: 143(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “B”, PUNE BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER आयकर अपील सं. / ITA No.470/PUN/2023 िनधाᭅरण वषᭅ / Assessment Year : 2021-22 Jt.CIT (OSD), Circle-12, Pune. Vs. Raj Surendra Mohan Hajela, 1101 Marvel Simrose, Lane E (Off. North Main Road), Koregaon Park, Pune- 411001. PAN : ABLPH1801J Appellant Respondent आदेश / ORDER PER INTURI RAMA RAO, AM: This is an appeal filed by the Revenue directed against the order of the National Faceless Appeal Centre [‘NFAC’] dated 16.01.2023 for the assessment year 2021-22. 2. Briefly, the facts of the case are that the respondent-assessee is a resident and also a tax resident of USA filed the Return of Income for the assessment year 2021-22 on 21.10.2021 by claiming foreign tax credit of Rs.4,32,10,256/- in terms of provisions of Income Tax Act, 1961 (‘the Act’) read with India USA Double Tax Avoidance Revenue by : Shri M. G. Jasnani Assessee by : Miss Palak Shah Date of hearing : 21.06.2023 Date of pronouncement : 11.07.2023 ITA No.470/PUN/2023 2 Agreement (‘DTAA’). The due date for filing the return of income for the assessment year under consideration was stated to have extended upto 15.03.2022. However, the respondent-assessee had not filed the Form No.67 i.e. the form for claiming foreign tax credit along with return of income, but filed on 21.10.2021. The said return of income was processed by CPC u/s 143(1) on 22.03.2022. The CPC had not allowed the credit for foreign tax credit on the ground that the Form No.67 was not filed along with the return of income as well as on the ground that wrong assessment year was mentioned in Form No.67 as assessment year 2020-21 instead of assessment year 2021-22. Thereafter, the respondent-assessee had filed another Form No.67 on 28.03.2022 by correcting the wrong assessment mentioned in the Form No.67 and requested for rectification of the intimation. But, the CPC had not allowed the said rectification. Against the said intimation, an appeal was filed before the NFAC with the delay. The NFAC condoned the delay and proceeded to dispose of the matter on merits and allowed the grounds of appeal filed by the assessee after referring certain judicial precedents. ITA No.470/PUN/2023 3 3. Being aggrieved by the order of the NFAC, the Revenue is in appeal before us in the present appeal. 4. When the matter was called on, a petition for adjournment was moved before us, which was rejected by us as no reasonable cause for seeking the adjournment was mentioned therein. Therefore, we proceed to dispose of the mater on merits after hearing the ld. Sr. DR. 5. We had carefully gone through the order passed by the NFAC. We find that the order passed by the NFAC suffers from following clauses :- (i) The appeal was filed before the NFAC with the delay and the NFAC condoned the delay without discussing the explanation tendered by the assessee explaining the delay in filing the appeal. (ii) The CPC had not granted the credit for foreign tax credit for the reasons that wrong assessment year was mentioned in Form No.67 had been adverted to the reasons were not available in the intimation u/s 143(1) of the Act, but contains a wrong assessment year. 6. Therefore, the NFAC ought not to have granted the relief without calling for a remand report from the Assessing Officer/CPC. Thus, the order of the NFAC was passed in gross violation of principles of natural justice as well as without adverting ITA No.470/PUN/2023 4 to the full facts of the case. In the circumstances, we are of the considered opinion that ends of justice would be met if the order of the NFAC is set-aside to the file of the NFAC with a direction that the issues in appeal shall be adjudicated afresh after affording reasonable opportunity of being heard to the assessee. Thus, the grounds of appeal filed by the Revenue stand partly allowed for statistical purposes. 7. In the result, the appeal filed by the Revenue stands partly allowed for statistical purposes. Order pronounced on this 11 th day of July, 2023. Sd/- Sd/- (PARTHA SARATHI CHAUDHURY) (INTURI RAMA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; ᳰदनांक / Dated : 11 th July, 2023. Sujeet आदेश कᳱ ᮧितिलिप अᮕेिषत / Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant. 2. ᮧ᭜यथᱮ / The Respondent. 3. The Pr. CIT concerned. 4. िवभागीय ᮧितिनिध, आयकर अपीलीय अिधकरण, “B” बᱶच, पुणे / DR, ITAT, “B” Bench, Pune. 5. गाडᭅ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune.