MICHAEL J PONNAMBALAM,TIRUNELVELI V. ITO, WARD-1, TIRUNELVELI

ITA 1/CHNY/2025

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Michael J Ponnambalam, an individual who returned to India after a long tenure abroad, filed income tax returns for the Assessment Years 2020-21 and 2021-22, claiming foreign tax credits for taxes paid in various countries. The Income Tax Officer denied these credits, citing the late filing of Form-67, which is required to claim FTC. Ponnambalam appealed this decision, which was upheld by the Commissioner of Income Tax (Appeals). The case was brought before the Income Tax Appellate Tribunal, which, referencing a precedent set by the Madras High Court, directed the Assessing Officer to reconsider the FTC claims, emphasizing that the filing of Form-67 before the due date is directory, not mandatory.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 107064 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2021-2022
• Other Referred Cases: Duraiswamy Kumarswamy v. PCIT [2023] 156 taxmann.com 445 (Mad)
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M.D. VIJAY KUMAR
• Assessee Lawyers: GIRISH KUMAR
• Keywords: Set aside
• Section: 143(1); 139(1)

Judgement Text

"आयकर अपीलीय अिधकरण, ‘ए’ \u0011ा यपीठ, चे\u0016ई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH: CHENNAI \u0019ी यस यस िव\u001cने\u001e रिव, \u0011ा ियक सद एवं \u0019ी जगदीश, लेखा सद क े सम' BEFORE SHRI SS VISWANETHRA RAVI, JUDICIAL MEMBER AND SHRI JAGADISH, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.3340/Chny/2024 & आयकर अपील सं./ITA No.01/Chny/2025 िनधा :रण वष: /Assessment Years: 2020-21 & 2021-22 Michael J Ponnambalam, 7-40, Sannathi Street, Vadakangulam S.O., Tirunelveli – 627 116. Vs. The Income Tax Officer, Ward-1, Tirunelveli. [PAN: HBJPP 5981C] (अपीलाथ\u0007/Appellant) (\b\tयथ\u0007/Respondent) अपीला थF की ओर से/ Appellant by : Shri Girish Kumar, Advocate HIथF की ओर से /Respondent by : Dr. M.D.Vijay Kumar, JCIT सुनवा ई की ता रीख/Date of Hearing : 06.03.2025 घोषणा की ता रीख /Date of Pronouncement : 07.03.2025 आदेश / O R D E R PER JAGADISH, A.M : Aforesaid two appeals filed by the assessee for Assessment Years (AYs) 2020-21 & 2021-22 arises out of the common orders of Learned Commissioner of Income Tax, Appeal, Addl/JCIT(A)-2, Surat [hereinafter “CIT(A)”] dated 25.11.2024. 2. The facts in both the appeals of the assessee are identical and issues are common hence, we proceed to pass a common order. For ITA Nos.3340/Chny/2024 & 01/Chny/2025 :- 2 -: brevity, we shall take up the appeal in ITA No.3340/Chny/2024 for A.Y 2020-21 as lead case. 3. The only ground of appeal in these appeals of assessee is against the order of Ld CIT(A) confirming the intimation order passed u/s. 143(1) of the Act by CPC, Bengaluru in not giving credit of foreign tax on the ground that Form-67 was filed beyond time limit prescribed u/s. 139(1) of the Act. 4. The assessee is an individual, who returned to India in May, 2013 after serving as a University staff in Physics in USA, Nigeria, Italy and Jamaica, for 42 years. The assessee has filed return of income for A.Y 2020-21 on 29.11.2022, and for A.Y 2021-22 on 23.11.2022 u/s.139(8A) of the Act along with Form-67 . The assessee has claimed foreign tax credit of Rs. 1,80,009/- for A.Y 2020-21 and Rs 1,94,582/- for A.Y 2021-22, but the same was denied in the intimation u/s 143(1) of the Act as the assessee has not filed return and Form-67 within due date prescribed u/s. 139(1) of the Act. Aggrieved, the assessee preferred an appeal before Ld. CIT(A). On appeal, the Ld. CIT(A) has confirmed the intimation order. ITA Nos.3340/Chny/2024 & 01/Chny/2025 :- 3 -: 5. The Ld. Authorized Representative (A.R) of the assessee has argued that the assessee has filed return of income u/s. 139(8A) of the Act along with Form-67 and therefore, the Form 67 in support of the claim for foreign tax credit was available at the time of processing of the return. The Ld. AR argued that filling of Form-67 before the prescribed due date u/s 139(1) is directory and not mandatory and FTC is to be allowed, if the same is available at the time of processing of return. The Ld AR relied on the decision of Hon’ble Madras High Court in the case of Duraiswamy Kumarswamy v. PCIT [2023] 156 taxmann.com 445 (Mad), in this respect. 6. The Ld. Departmental Representative (DR), on the other hand, has relied on the orders of lower authorities. 7. We have heard the rival submissions, and perused the materials available on record. The assessee has filed return of income for A.Y 2020-21 on 29.11.2020 and for A.Y 2021-22 on 23.11.2022 along with Form-67 u/s 139(8A) of the Act. The returns of income were processed u/s. 143(1) of the Act on 30.12.2023 and 29.12.2023 respectively, denying the claim of foreign tax credit. The Ld. AR has argued that Form-67 was available at the time of processing return of income and ITA Nos.3340/Chny/2024 & 01/Chny/2025 :- 4 -: therefore, in view of the decision of Hon’ble Madras High Court in the case of Duraiswamy Kumarswamy v. PCIT, supra, the CPC should have allowed the foreign tax credit. We note that the Hon’ble Madras High Court in the case of Duraiswamy Kumarswamy v. PCIT, supra, on identical facts has allowed the credit of FTC as under: “12. Further, in the present case, the intimation under section 143(1) was issued on 26.03.2021, but the FTC was filed on 02.02.2021. Thus, the respondent is supposed to have provided the due credit to the FTC of the petitioner. However, the FTC was rejected by the respondent, which is not proper and the same is not in accordance with law. Therefore, the impugned order is liable to be set aside.” 8. In view of the above, the A.O is directed to verify the claim of FTC and allow the same in accordance with the decision of Hon’ble Jurisdiction High Court, supra. Thus, the appeal filed by the assessee is allowed for statistical purposes only. ITA No.01/Chny/2025 for A.Y 2021-22: 9. We find that the identical issue is involved in assessee’s appeal for A.Y 2021-22 also and accordingly, our adjudication above in A.Y 2020-21 applies mutatis mutandis therein as well. Therefore, for the similar reasons, we direct the A.O to verify the claim of the assessee and allow the same in accordance with decision of Hon’ble Jurisdiction High Court, supra. ITA Nos.3340/Chny/2024 & 01/Chny/2025 :- 5 -: 10. In the result, both the appeals filed by the assessee are allowed for statistical purposes. Order pronounced on 07th March, 2025. Sd/- Sd/- (यस यस िव\u001cने\u001e रिव) (SS Viswanethra Ravi) \u0001याियक \u0001याियक \u0001याियक \u0001याियक सद\bय सद\bय सद\bय सद\bय / Judicial Member (जगदीश) (Jagadish) लेखा लेखा लेखा लेखा सद\u0011य सद\u0011य सद\u0011य सद\u0011य /Accountant Member चे\u0013नई/Chennai, \u0016दनांक/Dated: 07th March, 2025. EDN/- आदेश क\u0019 \bितिल\u001cप अ\u001dे\u001cषत/Copy to: 1. अपीलाथ\u0007/Appellant 2. \b\tथ\u0007/Respondent 3. आयकर आयु\u000f/CIT, Madurai 4. िवभागीय \bितिनिध/DR 5. गाड\u0018 फाईल/GF "