PRAKASH NARAYANAN,BENGALURU V. DCIT CIRCLE 3(3)(1), BENGALURU

ITA 969/BANG/2025

AI Insights

The case involves Shri Prakash Narayanan, the appellant, who challenged the decision of the Commissioner of Income Tax (Appeals) regarding the denial of a revised foreign tax credit claim for the Assessment Year 2018-19. Initially, the appellant claimed a foreign tax credit of Rs. 8,50,562 in his original return, which he later revised to Rs. 13,24,710 upon discovering an error. The Assessing Officer (AO) accepted the revised return but granted relief only as per the original claim. The appellant's subsequent appeal to the CIT(A) was unsuccessful, leading to the present appeal before the Tribunal. The Tribunal, referencing judicial precedents and the principles of avoiding double taxation, ruled in favor of the appellant, allowing the revised foreign tax credit claim.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 714585 (ITAT-BANGALORE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2018-2019
• Other Referred Cases: Ms. Brinda RamaKrishna vs. ITO, 42 Hertz Software India (P.) Ltd. vs. ACIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MURALI MOHAN
• Assessee Lawyers: ANOOP AGARWAL
• Keywords: Additional evidence; Revised return; Salary income
• Section: 142(1); 90

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH : BANGALORE BEFORE SHRI PRASHANT MAHARISHI, VICE – PRESIDENT AND SHRI SOUNDARARAJAN K., JUDICIAL MEMBER ITA No. 969/Bang/2025 Assessment Year : 2018-19 Shri Prakash Narayanan, 708, Sobha Quartz, Bellandur, Bengaluru – 560 103. PAN: ADXPN4161D Vs. The Deputy Commissioner of Income Tax, Circle – 3(3)(1), Bengaluru. APPELLANT RESPONDENT Assessee by : Shri Anoop Agarwal, CA Revenue by : Shri Murali Mohan, CIT-DR Date of Hearing : 08-07-2025 Date of Pronouncement : 05-08-2025 ORDER PER SOUNDARARAJAN K., JUDICIAL MEMBER This is an appeal filed by the assessee challenging the order of the NFAC, Delhi dated 12/03/2025 in respect of the A.Y. 2018-19 and raised the following grounds: “1.0 The appellate order passed by the learned Commissioner of Income Tax (Appeals) dated 12.03.2025, in so far as it is against the appellant is opposed to law, weight of evidence, probabilities, facts and circumstances of the case, may be quashed. 2.0 The learned Commissioner of Income Tax (Appeals) has erred in dismissing the appellant's appeal by not allowing revised claim of relief u/s 90 of the Income Tax Act, 1961. Printed from counselvise.com Page 2 of 5 ITA No. 969/Bang/2025 3.0 The appellant craves leave to add or alter any ground of appeal at any time up to the final decision of the appeal, and to educe additional evidence, if so required while prosecuting the appeal. Prayer: For the above and the other grounds to be urged during the course of proceedings of this appeal, the appellant prays the Hon’ble Tribunal that this appeal be allowed in the interest of justice and equity.” 2. The brief facts of the case are that the assessee is an individual and filed his revised return of income on 28/03/2019 declaring a gross total income of Rs. 1,62,94,120/-. 3. The assessee had included his income from salary and income from other sources. The return filed by the assessee was selected for limited scrutiny to examine the issue of “Foreign financial interest” and notice u/s. 143(2) was issued on 23/09/2019. Subsequently, notice u/s. 142(1) was issued on 24/11/2020. In response to the said notice, the assessee has furnished the details. The AO examined the submissions made by the assessee and accepted the income returned in the revised return but granted the relief u/s 90 as per the original return. The assessee had disputed the relief claimed u/s. 90 of the Act by filing an appeal before the Ld.CIT(A). The assessee originally claimed a relief of Rs. 8,50,562/- in the original return of income and subsequently claimed a relief of Rs. 13,24,710/- and provided the supporting materials. The assessee relying on the judicial precedence had sought for the relief u/s. 90 of the Act based on the revised return filed by him. The Ld.CIT(A) had also not granted the relief and therefore the present appeal has been filed before this Tribunal. 4. At the time of hearing, the Ld.AR submitted that the assessee had furnished the supporting documents in respect of the foreign tax credit claimed and also field the revised form 67 while filing the revised return and therefore the assessee is entitled for the relief of the foreign tax credit as claimed in the revised form 67. The Ld.AR also filed a paper book enclosing the various documents and also the judicial precedence of the Hon’ble Printed from counselvise.com Page 3 of 5 ITA No. 969/Bang/2025 Supreme Court as well as the other High Courts and prayed that the necessary relief may be granted by considering the revised form 67. 5. The Ld.DR relied on the order of the lower authorities and submitted that the AO had considered the original form 67 and granted the necessary relief and not granted the relief as per the revised form 67 on the ground that the said form 67 was not filed in time before the authorities. 6. We have heard the arguments of both sides and perused the materials available on record. 7. In the present appeal, the only dispute is with regard to the disallowance of the foreign tax credit of Rs. 13,24,710/- which was claimed by the assessee in the revised form 67 as against the foreign tax credit claimed in the original form 67 at Rs. 8,50,562/-. There is no dispute that the taxes paid in the foreign countries could not be taxed in India and therefore the assessee had claimed the said relief u/s. 90 of the Act. We have also perused the relevant provision 90 which states that in order to avoid the double taxation, the above said provision was made. Similarly, the Rule 128 of the Income Tax Rules which deals with the FTC specifies that the foreign tax credit should be taken into consideration as credit in the year in which the income corresponding to such tax has been offered to tax or assessed to tax in India. This is a beneficial provision to avoid the double taxation. When the fact of the payment of tax in a foreign country has been established, then automatically, the assessee is entitled for the benefit conferred under the provisions. The payment of foreign tax could be set off for the relevant Assessment Year for which the assessee has to file a declaration in form 67 and on that basis, the credit should be granted to the assessee. 8. In the present case, the assessee had originally filed his return of income in time and also claimed the FTC by filing form 67 and subsequently, he found that some lesser amount was claimed in the form 67, a revised return was field and revised form 67 was also furnished to the Printed from counselvise.com Page 4 of 5 ITA No. 969/Bang/2025 authorities. Even though, the AO had considered the revised return, had not granted the foreign tax credit claimed in the revised form 67. The Statute made it clear that the tax paid by the assessee in the foreign country need not again be taxed in India and therefore in order to avoid the double taxation, the provision was made in the Act. If the object of the legislature is clear, the same cannot be denied by citing some irrelevant facts. Moreover, the Hon’ble Jurisdictional High Court as well as the Tribunals had considered the issue and granted the relief even though the form 67 was filed belatedly. Further, the appeal proceedings before the Ld.CIT(A) is also a continuing one of the assessment and therefore even before the Ld.CIT(A), the form 67 can be filed and the benefits can be availed by the assessees. In the present case, the form 67 was furnished to the AO but the same was not considered by the AO and the Ld.CIT(A) had also not accepted the case of the assessee because the form 67 was not filed within the period prescribed under the Statute. The said view of the AO as well as the Ld.CIT(A) is not correct and also not in accordance with the principles laid down by this Tribunal in case of Ms. Brinda RamaKrishna vs. ITO in ITA No. 454/Bang/2021 dated 17/11/2021 and the another order of this Tribunal reported in (2022) 139 taxmann.com 448 in the case of 42 Hertz Software India (P.) Ltd. vs. ACIT. 9. In view of the settled position of law, we are allowing the appeal filed by the assessee. 10. In the result, the appeal filed by the assessee is allowed. Order pronounced in the open court on 05th August, 2025. Sd/- Sd/- (PRASHANT MAHARISHI) (SOUNDARARAJAN K.) Vice – President Judicial Member Bangalore, Dated, the 05th August, 2025. /MS / Printed from counselvise.com Page 5 of 5 ITA No. 969/Bang/2025 Copy to: 1. Appellant 2. Respondent 3. CIT 4. DR, ITAT, Bangalore 5. Guard file 6. CIT(A) By order Assistant Registrar, ITAT, Bangalore Printed from counselvise.com "