NANDKUMAR CHANDRA,PUNE V. .ITO WARD 13(1), PUNE

ITA 2329/PUN/2024

AI Insights

The case involves Nandkumar Chandra, an individual resident in India, who worked on an international assignment in the UK and claimed a credit for foreign tax paid in his income tax return for the assessment year 2018-19. The Central Processing Center (CPC), Bangalore, denied this credit because Form No.67, required for claiming the foreign tax credit, was not filed within the prescribed due date. The National Faceless Appeal Centre (NFAC) upheld this decision, leading Chandra to appeal before the Income Tax Appellate Tribunal. The Tribunal, referencing decisions from the Madras High Court and its own previous rulings, determined that the requirement to file Form No.67 within the due date is directory and not mandatory, thus allowing the appeal.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 474113 (ITAT-PUNE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2018-2019
• Other Referred Cases: Duraiswamy Kumaraswamy Vs. The PCIT and others, Samiran Arunkumar Dutta Vs. DCIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SOURABH NAYAK
• Keywords: TDS
• Section: 143(1); 139(1)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES “SMC”, PUNE BEFORE DR.MANISH BORAD, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No.2329/PUN/2024 नधा\u000fरण वष\u000f / Assessment Year : 2018-19 Nandkumar Chandra, C-907, Gagan Lawish, Behind Dharmavat Petrol Pump, Pisoli, Pune – 411 060, Maharashtra PAN : AHEPC5758N Vs. ITO, Ward-13(1), Pune Appellant Respondent आदेश / ORDER PER DR. MANISH BORAD, ACCOUNTANT MEMBER : This appeal filed by the assessee pertaining to the assessment year 2018-19 is directed against the order dated 19.09.2024 passed [in short “the Act\"] by the Addl./JCIT(A)- 6, Chennai u/s.250 of the Income Tax Act, 1961 which in turn is arising out of Intimation order passed u/s.143(1) dated 23.05.2020. Assessee by : None Revenue by : Shri Sourabh Nayak Date of hearing : 18.12.2024 Date of pronouncement : 23.12.2024 ITA No.2329/PUN/2024 Nandkumar Chandra 2 2. Briefly, the facts of the case are that the appellant is an individual (Resident) deriving income under the head “salary”. During the year under consideration, the appellant worked with Emerson Electric Company (India) Private Limited. On an international assignment, he went to United Kingdom for the period 04.01.2017 to 10.09.2017. The appellant filed the Return of Income for the A.Y.2018-19 on 26.03.2019 declaring total income of Rs.25,27,840/- after claiming credit for Foreign Tax paid of Rs.3,69,731/- u/s.90 read with Article 24(2) of India-UK Double Taxation Avoidance Agreement. However, the Form No.67 was filed by the appellant on 22.03.2019. The CPC, Bangalore, vide Intimation dated 23.05.2020 denied the claim for credit of TDS, as Form No.67 was not filed within prescribed time. 3. Being aggrieved by the above Intimation, an appeal was filed before the NFAC, who vide impugned order had confirmed the action of the CPC, Bangalore denying the claim of credit for Foreign Tax paid, as the Form No.67 was filed belatedly, i.e., beyond the due date for filing of the return of income. ITA No.2329/PUN/2024 Nandkumar Chandra 3 4. Now the appellant is in appeal before the Tribunal challenging the order passed by ld. NFAC affirming the action of the CPC. 5. When the matter was called for, none appeared on behalf of the appellant despite due service of notice of hearing. However, the assessee has filed the written submissions relying on various decisions. I therefore proceed to dispose of the appeal with the able assistance from the ld. Departmental Representative exparte qua the assessee and the material available on record. 6. The ld. Departmental Representative submits that CPC, Bangalore was justified in denying the credit for Foreign Tax paid, as the assessee had not filed Form No.67 as per amended provisions of the Income Tax Rules. 7. I heard the ld. ld. Departmental Representative and perused the material on record. The issue in the present appeal is that whether or not the CPC, Bangalore is justified in denying the credit for Foreign Tax paid for the reason that the Form No.67 was not filed within the due date for filing of ITA No.2329/PUN/2024 Nandkumar Chandra 4 the return of income as specified under the provisions of section 139(1) of the Income Tax Act, 1961 (‘the Act’). Admittedly, in the present case, Form No.67 was not filed within the due date for filing of the return of income under the provisions of section 139(1), but Form No.67 was filed on 22.03.2019. The CPC, Bangalore had processed the return of income as on 23.05.2020, which means that Form No.67 was very much available with the CPC, Bangalore. Therefore, the CPC, Bangalore cannot deny the claim for credit for foreign tax paid merely because Form No.67 was not filed within the due date specified for filing the return of income under the provisions of section 139(1) of the Act, as it is merely a directory. My view is fortified by the judgment of Hon’ble Madras High Court in the case of Duraiswamy Kumaraswamy Vs. The PCIT and others in W.P.No.5834/2022 dated 06.10.2023 wherein it has been held that filing of FTC in terms of the Rule 128 is only directory in nature. The rule is only for the implementation of the provisions of the Act and it will always be directory in nature. I further find support from the decision of this Tribunal in the case of Samiran Arunkumar Dutta Vs. DCIT ITA No.2329/PUN/2024 Nandkumar Chandra 5 – ITA No.1195/PUN/2024 dated 14.08.2024 where also assessee was employed with same employer but Foreign Tax Credit was allowed even when Form No.67 was filed belatedly observing as follows : “7. I heard the ld. Sr. DR and perused the material on record. The issue in the present appeal is that whether or not the CPC, Bangalore is justified in denying the credit for Foreign Tax paid for the reason that the Form No.67 was not filed within the due date for filing of the return of income as specified under the provisions of section 139(1) of the Income Tax Act, 1961 (‘the Act’). Admittedly, in the present case, Form No.67 was not filed within the due date for filing of the return of income under the provisions of section 139(1), but Form No.67 was filed on 30.03.2021. The CPC, Bangalore had processed the return of income as on 24.12.2021, which means that Form No.67 was very much available with the CPC, Bangalore. Therefore, the CPC, Bangalore cannot deny the claim for credit for foreign tax paid merely because Form No.67 was not filed within the due date specified for filing the return of income under the provisions of section 139(1) of the Act, as it is merely a directory. Therefore, I direct the CPC, Bangalore to amend the Intimation u/s 143(1) of the Act by taking into consideration the Form No.67 filed by the appellant. Accordingly, the grounds of appeal filed by the assessee stands partly allowed.” 8. In light of above, I direct the CPC, Bangalore to amend the Intimation u/s 143(1) of the Act by taking into consideration the Form No.67 filed by the appellant. Accordingly, the grounds of appeal No.1 filed by the assessee stands allowed. Other grounds being general and consequential in nature needs no adjudication. ITA No.2329/PUN/2024 Nandkumar Chandra 6 9. In the result, the appeal of the assessee is allowed. Order pronounced on this 23rd day of December, 2024. Sd/- (MANISH BORAD) ACCOUNTANT MEMBER पुणे / Pune; \u0001दनांक / Dated : 23rd December, 2024. Satish आदेश क\u0002 \u0003ितिलिप अ ेिषत / Copy of the Order forwarded to : 1. अपीलाथ / The Appellant. 2. \u000eयथ / The Respondent. 3. The Pr. CIT concerned. 4. िवभागीय ितिनिध, आयकर अपीलीय अिधकरण, “SMC” ब\u0014च, पुणे / DR, ITAT, “SMC” Bench, Pune. 5. गाड\u0004 फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune. "