MADHU KHATRI, SINGAPORE,SINGAPORE V. DCIT CIRCLE 3(3)(1), BANGALORE, BANGALORE

ITA 173/BANG/2025

AI Insights

The case involves Madhu Khatri, an individual residing in Singapore, who appealed against the decision of the CIT(A) which denied her claim for a Foreign Tax Credit (FTC) on dividend income earned outside India for the Assessment Year 2018-19. The primary issue was the late submission of Form 67, which is required to claim FTC under Section 90 of the Income Tax Act. The Central Processing Center (CPC) in Bangalore initially denied the credit due to the absence of Form 67 with the return of income. The CIT(A) upheld this decision, leading to the current appeal before the Income Tax Appellate Tribunal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 32811 (ITAT-BANGALORE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2018-2019
• Other Referred Cases: NICDC. Vs. DCIT
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUBRAMANIAN S
• Assessee Lawyers: ROHAN SOGANI
• Keywords: Set aside
• Section: 90

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH : BANGALORE BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI PRAKASH CHAND YADAV, JUDICIAL MEMBER ITA No. 173/Bang/2025 Assessment Year : 2018-19 Madhu Khatri, 237, Arcadia, Arcadia Foreign, Singapore – 289 844. PAN: AAKPK5484G Vs. The Deputy Commissioner of Income Tax, Circle – 3(3)(1), Bangalore. APPELLANT RESPONDENT Assessee by : Shri Rohan Sogani, CA Revenue by : Shri Subramanian S, JCIT-DR Date of Hearing : 20-03-2025 Date of Pronouncement : 27-03-2025 ORDER PER PRAKASH CHAND YADAV, JUDICIAL MEMBER Present appeal of the assessee is arising from the order of the Ld.CIT(A) dated 03/12/2024 and relates to A.Y. 2018-19. 2. The brief facts of the case are that the assessee is an individual and derives income from sources viz., salary, house property, capital gain and other sources. The assessee filed her return of income for the year under consideration on 26/07/2018 and later on revised the return of income on 27/08/2018. Page 2 of 3 ITA No. 173/Bang/2025 3. During the year under consideration, the assessee has earned dividend income to the tune of Rs. 27,08,014/- outside India. In relation to this dividend income, the assessee has claimed credit of foreign tax paid by the assessee, in terms of the provisions of the section 90 of the IT Act. Since assessee could not attach Form 67 with the return of income, the CPC, Bangalore while processing the return of income of the assessee denied the claim of foreign tax credit. 4. Aggrieved with the order of the CPC, assessee filed an appeal before the Ld.CIT(A) and claimed the credit of foreign tax paid amount. However, the Ld.CIT(A) dismissed the appeal of the assessee observing that the assessee has not filed Form 67 within stipulated time and hence assessee is not entitled for the credit of foreign tax paid. 5. Aggrieved with the order of the Ld.CIT(A), assessee has come up in appeal before us. The Ld.AR pointed out that the assessee has submitted Form 67 after the lapse of around 3 years he further contended that proceedings before the CIT(A) are continuation of appellate proceedings and hence the assessee is entitled for the credit of foreign tax paid by her. 6. The Ld. DR contended that the matter may kindly be restored to the file of AO for the verification of Form 67 and relied upon the orders of the Ld.CIT(A). 7. We have heard the rival submissions and perused the materials available on record. We observe that similar issue has been decided by the Coordinate Bench in the case of NICDC. Vs. DCIT reported in 171 taxmann.com 653. In that case also, the assessee failed to submit the Form 67 along with the return of income. In that case also, there was a delay of 5 years. Deciding the appeal in favour of the assessee, the Coordinate Bench has observed as under: “9. In the present case, the claim of the assessee was declined by the Ld. CIT(A) on the basis that Form No. 67 was filed after a gap of five years. Having regard to the Page 3 of 3 ITA No. 173/Bang/2025 delineation made and in consonance with the view expressed by the Co-ordinate Benches, we hold that the claim of FTC does not get controlled solely by the delay in filing of Form 67 prescribed under rule 128(9) of the Income Tax Rules. Hence, we set aside the action of the Ld. CIT(A) and direct the Assessing officer to take cognizance of Form No.67 so filed and grant FTC as may be entitled to the assessee in accordance with law. Therefore, following the binding precedents, we here by direct the AO to allow benefit of Foreign Tax Credit subject to such enquiries and verifications as may be considered expedient.” 8. Respectfully following the verdict of Coordinate Bench, we hereby restore the matter to the file of AO for allowing the credit of foreign tax paid by the assessee with the direction after verification of Form 67. 9. In the result, the appeal filed by the assessee is allowed for statistical purposes as indicated above. Order pronounced in the open court on 27th March, 2025. Sd/- Sd/- (WASEEM AHMED) (PRAKASH CHAND YADAV) Accountant Member Judicial Member Bangalore, Dated, the 27th March, 2025. /MS / Copy to: 1. Appellant 2. Respondent 3. CIT 4. DR, ITAT, Bangalore 5. Guard file 6. CIT(A) By order Assistant Registrar, ITAT, Bangalore "