SHIPIJ RATHORE,INDORE V. INCOME TAX OFFICER 1(2), INDORE

ITA 557/IND/2025

AI Insights

The case involves Shipij Rathore, the appellant, who filed an appeal against the order of the Commissioner of Income-Tax (Appeals) which denied her relief under sections 90/90A of the Income Tax Act, 1961, for the Assessment Year 2021-22. The relief was initially denied due to the non-filing of Form No. 67, which was later filed but for the incorrect assessment year. The Tribunal considered the procedural nature of the requirement to file Form No. 67 and previous rulings that supported the substantive right to claim foreign tax credit despite procedural lapses. The Tribunal's decision was influenced by the principles of natural justice and the substantive provisions of the DTAA, which override procedural requirements.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 838492 (ITAT-INDORE)
• Duration Of Justice: 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2021-2022
• Appeal Filed On: 27-06-2025
• Other Referred Cases: Collector, Land Acquisition Vs Mst. Katiji and others, Asha Rani Pandya Vs. DCIT/ACIT-1(1), Indore, Mangalore Chemicals & Fertilizers Ltd. v. Deputy Commissioner, Sambhaji and Others v. Gangabai and Others, Duraiswamy Kumaraswamy vs. PCIT, GE India Technology Centre P Ltd v CIT, Engineering Analysis Centre of Excellence P Ltd v CIT
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Department Lawyers: FORREVENUEDIDNOTHAVEANYOBJECTIONTOTHEABOVE; FORTHEASSESSEESUBMITTEDTHATINCASE; FORTHEASSESSEE; FORTHEASSESSEEANDHOLDTHAT I RULE; SHRIASHISHPORWAL
• Assessee Lawyers: SHRIADITYABHATT; WAYOFSELECTINGWRONGAY
• Keywords: Set aside; Revised return; Salary income; Principle of natural justice; Rectification of order; Double taxation relief; Residential status
• Section: 154; 90; 139(5)

Judgement Text

"Page 1 of 15 आयकरअपीलीयअिधकरण, इंदौरɊायपीठ, इंदौर IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI B.M. BIYANI, ACCOUNTANT MEMBER AND SHRI PARESH M. JOSHI, JUDICIAL MEMBER ITA No.557/Ind/2025 Assessment Year:2021-22 Shipij Rathore, 126, Swami Dayanand Nagar, Indore बनाम/ Vs. ITO 1(2) Indore (Assessee/Appellant) (Revenue/Respondent) PAN: AYJPR7888L Assessee by Shri Aditya Bhatt, AR Revenue by Shri Ashish Porwal, Sr. DR Date of Hearing 03.02.2026 Date of Pronouncement 19.02.2026 आदेश/ O R D E R Per B.M. Biyani, A.M.: Feeling aggrieved by order of first appeal dated 06.03.2025 passed by learned Commissioner of Income-Tax (Appeals)-NFAC, Delhi [“CIT(A)”] which in turn arises out of rectification order dated 21.01.2025 passed by learned CPC, Bengaluru [“AO”] u/s 154 of Income-tax Act, 1961 [“the Act”] for Assessment-Year [“AY”] 2021-22, the assessee has filed this appeal on following grounds: “1. The filing of the DTAA relief form in the incorrect assessment year is a bona fide mistake, and it is within the jurisdiction of the Income Tax Department to allow rectification of this error, given that the taxpayer did not intentionally cause the mistake. The error should be Printed from counselvise.com Shipij Rathore ITA No. 557/Ind/2025 – AY 2021-22 Page 2 of 15 corrected to ensure that the taxpayer is given the proper relief they are entitled to under the law. 2.The error was purely technical and arose due to the consultant's mistake, for which the taxpayer should not be held responsible. The taxpayer did not intentionally make any incorrect filing but relied on the consultant's to ensure expertise compliance with tax laws. 3. The taxpayer should not bear the burden of the tax liability due to an error committed by a third party (the consultant). It is a matter of fairness and justice that the taxpayer be given an opportunity to rectify the mistake without additional incurring penalties or tax liabilities. 4.Given that the taxpayer is genuinely entitled to claim the DTAA relief, and the only issue at hand is the incorrect filing of forms, it is imperative that justice is served by rectifying this mistake without further penalizing the taxpayer. 5.The order so passed is bad in law & to be set aside. 6.On the ground of principal of natural justice, assesse must be given a chance of hearing.” 2. There is a small delay of 27 days in filing present appeal. Having regard to the averments made by assessee/appellant in Para Nos. 5 to 7 of the application/affidavit filed for condonation of delay, we are satisfied that there exists a sufficient cause for occurrence of delay and that the delay is neither intentional nor deliberate. In view of the settled legal position laid down by the Hon’ble Supreme Court in Collector, Land Acquisition Vs Mst. Katiji and others 1987 AIR 1353, 1987 2 SCC 387, wherein it has been held that the “technical considerations” should not prevail over the cause of “substantial justice”, we deem it fit to condone the delay. Accordingly, the delay of 27 days in filing appeal is condoned and the appeal is taken for hearing. Printed from counselvise.com Shipij Rathore ITA No. 557/Ind/2025 – AY 2021-22 Page 3 of 15 3. The background facts leading to present appeal are such that the assessee-individual filed her return of income of AY 2021-22 on 27.12.2021 (due date was 31.12.2021) declaring a total income of Rs. 24,16,420/- and claiming a relief u/s 90/90A of Rs. 4,20,823/- on account of foreign tax credit (FTC). The return of assessee was processed by AO through an intimation dated 12.05.2022 u/s 143(1) wherein the AO did not grant the relief claimed by assessee u/s 90/90A for the reason that the Form No. 67 was not filed by assessee. Subsequently, on 16.12.2024, the assessee filed Form No. 67 and simultaneously filed a rectification-application u/s 154 to AO seeking amendment of intimation u/s 143(1) for giving relief u/s 90/90A. However, the AO rejected assessess’s application. Aggrieved, the assessee carried matter in first-appeal before CIT(A) but did not get any relief. Now, the assessee has come in next appeal before us. 4. The grievance of assessee in present case is very limited. The assessee is contesting for grant of relief of Rs. 4,20,823/- u/s 90/90A on account of FTC, which has been denied by lower authorities. 5. Advancing the grievance/claim of assessee, the Ld. AR made two-fold submissions: (i) Firstly, it is submitted that the due date for filing of return was 31.12.2021. The assessee filed return on 27.12.2021 well-in-time. Further, the assessee e-filed Form No. 67 well-in-time on the very same day of 27.12.2021 for availing FTC but mistakenly selected Printed from counselvise.com Shipij Rathore ITA No. 557/Ind/2025 – AY 2021-22 Page 4 of 15 wrong “AY 2020-21” in place of correct “AY 2021-22”, copy of the Form No. 67 so filed on 27.12.2021 alongwith e-filing acknowledgment downloaded from departmental website bearing number: 478416480271221 is available in case-file/paper-book. Subsequently, after passing of intimation u/s 143(1) by AO denying FTC to assessee, the assessee made a thorough search and at last came to know about the mistake which had crept into. Hence, the assessee e-filed Form No. 67 on 16.12.2024 by selecting AY 2021-22, copy of the Form No. 67 so filed on 16.12.2024 alongwith e-filing acknowledgment downloaded from departmental website bearing number: 754942280161224 is also available in case-file/paper-book. Ld. AR carries us to both originally filed Form 67 on 27.12.2021 and subsequently filed Form 67 on 16.12.2024 and demonstrated that all figures mentioned in both forms are same and matching. In response to a query raised by bench, Ld. AR also made an affirmative statement in open court that the assessee has not claimed any relief/credit u/s 90/90A in AY 2020-21. To demonstrate this fact, Ld. AR has also filed copies of ITR and Computation of total income/tax liability of AY 2020-21. With this submission, Ld. AR prayed that a bonafide technical mistake had occurred on the part of assessee by way of selecting wrong AY 2020- 21 but the assessee has already rectified the same by filing a new Form 67 for AY 2021-22, therefore the assessee must be given the benefit of relief as claimed. Printed from counselvise.com Shipij Rathore ITA No. 557/Ind/2025 – AY 2021-22 Page 5 of 15 (ii) Ld. AR further submitted that even if it is considered as a case of non- filing of Form 67 for AY 2021-22 in time, the assessee has benefit of decision of ITAT, Indore in ITA No. 176/Ind/2024 – Asha Rani Pandya Vs. DCIT/ACIT-1(1), Indore – order dated 28.06.2024 wherein the co-ordinate bench has held that the filing of Form 67 is a directory/procedural requirement and the statutory relief/credit u/s 90/90A cannot be denied for belated filing of Form No. 67. 6. Ld. DR for revenue did not have any objection to the above submissions of Ld. AR. However, he requested that in the event the bench directs the AO to give relief u/s 90/90A to assessee, the same must be after necessary verification by AO. 7. We have considered submissions of both sides and carefully perused the record. The issue involved in the present appeal is narrow and undisputed, namely, grant of FTC of Rs. 4,20,823/- claimed by the assessee u/s 90/90A. The AO has denied the relief of FTC in intimation u/s 143(1) solely for the reason that Form No. 67 was not found to be filed for AY 2021- 22 at the time of processing of return. 8. From the material placed before us, it is evident that the assessee filed her return of income for AY 2021-22 well within the due date. It is also borne out from record that the assessee had electronically filed Form No. 67 on 27.12.2021, i.e. on the very same day on which the return of income was filed, though by inadvertently selecting the incorrect AY 2020-21 instead of Printed from counselvise.com Shipij Rathore ITA No. 557/Ind/2025 – AY 2021-22 Page 6 of 15 AY 2021-22. The Ld. AR has demonstrated before us copies of Form No. 67 filed on 27.12.2021 as well as the Form No. 67 subsequently filed on 16.12.2024 for AY 2021-22, and we find that the figures of FTC claimed in both Forms are identical. The Ld. AR has also categorically stated at the bar that no FTC has been claimed or allowed in AY 2020-21. In these facts, it is clear that the assessee had intended to claim FTC for AY 2021-22 from the very inception, and the lapse was purely technical and inadvertent in nature, arising from selection of an incorrect AY while e-filing Form No. 67. For such a mistake, in our considered view, the assessee cannot be denied the statutory relief as available u/s 90/90A. 9. Even otherwise, we note that the co-ordinate bench of ITAT, Indore has, in Asha Rani Pandya vs. DCIT/ACIT-1(1), Indore (ITA No. 176/Ind/2024, order dated 28.06.2024, already held that the filing of Form No. 67 is a procedural/directory requirement and that FTC being a substantive relief available u/s 90/90A cannot be denied merely for delay or technical lapse in filing of Form No. 67. We re-produce below the relevant portion of the order of Asha Rani Pandya (supra): “4. We have considered the rival submissions as well as relevant material on record. The CIT(A) has confirmed the disallowance of FTC in para 4.1 to 4.3 of the impugned order as under: “4.1 The Appellant is aggrieved by the denial of foreign tax credit of Rs.20,18,309/-, which according to CPC is not available when form 67 has not been filed before the time limit specified u/s.139(1). A notice was issued to the Appellant to establish the fact on filing of form no.67 to claim relief of taxes u/s 90. In response to the same, the Appellant, vide letter dated 25/10/2023 submitted that the relief u/s.90 cannot be denied for non-filing of form 67 since income Printed from counselvise.com Shipij Rathore ITA No. 557/Ind/2025 – AY 2021-22 Page 7 of 15 earned in USA of Rs. 84,53,976/- has been offered to tax in the total income declared of Rs. 20,04,65,150/-. 4.2 The facts of the case and the compliance to the rules laid down u/r. 128 of the Income tax Rules, 1962 are carefully considered. It is an admitted fact that Form no.67 has not been filed by the Appellant before the time limit specified u/s.139(1) for AY 2019-20 and such omission is attempted to be justified by the Appellant on the pretext that filing of Form No.67 is not mandatory relying on certain judgements. With due respect to the judicial authorities who had rendered in favour of the tax payers like that of the Appellant, it is brought on record that filing of Form no.67 is mandatory to claim the benefit of Foreign Tax Credit. 4.3 Taxes are paid in an alien nation, the particulars of which can never be verified by the Income tax Authorities. It is for such reason that Form no.67 which consists of 4 parts has a verification column, affirming that the claim of the FTC to the best of the knowledge and belief of the Appellant is true and correct. Providing credit of FTC in the absence of such verification is not logical while the authorities erred in failing to comprehend that the claims are otherwise not verifiable. Further, Rule 128 incorporates the word \"Shall\", which imply that filing of Form no.67 before the time limit u/s.139(1) [now extended to 139(4)] is directory/mandatory. Having failed to file the same, the CPC was correct in denying the credit of FTC paid abroad. The corresponding ground of appeal is therefore dismissed.” 4.1. Thus, the payment of tax of Rs. 20,18,809/- on USA income has not been disputed by the CIT(A) however, the claim of the assessee on foreign tax credit was denied on the ground that the assessee has not filed form No.67 within the limitation specified u/s 139(1) of the Act. 4.2 At the outset, we note that the Hon’ble Madras High Court in case of Duraiswamy Kumaraswamy vs. PCIT (supra) has held in para 11 to 13 as under: “11. The law laid down by the Hon'ble Apex Court in Commissioner of Income-Tox, Maharashtra v. G.M. Knitting Industries (P) Limited in Civil Appeal Nos. 10782 of 2013 and 4048 of 2014 dated 24.06.2015, which was referred above, would be squarely applicable to the present case. In the present case, the returns were filed without FTC, however the same was filed before passing of the final assessment order. The 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. This is what the Hon'ble Supreme Court had held in the above cases when the returns were filed without furnishing Form 3AA and the same can be filed the subsequent to the passing of assessment order. 12. Further, in the present case, the intimation under Section 143(1) was issued on 26.03.2021, but the FTC was filed on 02.2021. Thus, Printed from counselvise.com Shipij Rathore ITA No. 557/Ind/2025 – AY 2021-22 Page 8 of 15 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. 13. Accordingly the impugned order dated 25.01.2022 is set While setting aside the impugned order, this Court remits the matter back to the respondent to make reassessment by taking into consideration of the FTC filed by the petitioner on 02.02.2021. The respondent is directed to give due credit to the Kenya income of the petitioner and pass the final assessment order. Further, it is made clear that the impugned order is set aside only to the extent of disallowing of FTC claim made by the petitioner and hence, the first respondent is directed to consider only on the aspect of rejection of FTC claim within a period of 8 weeks from the date of receipt of copy of this order.” 4.3 Thus, it is clear that the Hon’ble High Court has held that the filing of form no. 67 for claim of FTC in terms of Rule 128 is only directory in nature. Once the assesse has filed this form no.67 then the claim of foreign tax credit of the assessee ought to have been allowed by the CIT(A). The Bangalore Benches of the Tribunal in case of Deepak Shimoga Padmaraju (supra) has considered this issue in para 5 to 6 as under: “5. Further, we note that on identical issue, this Tribunal in the case of Brinda Rama Krishna (in ITA No. 454/Bang/2021 for AY.2018-19), order dated 17.11.2021 held that (i) Rule 128(9) of the Rules does not provide for disallowance of FTC in case of delay in filing Form No.67;(ii) filing of Form No.67 is not mandatory but a directory requirement and (iii) DTAA overrides the provisions of the Act and the Rules cannot be contrary to the Act. Therefore, non-furnishing of Form No.67 before the due date u/s 139(1) of the Act is not fatal to the claim for FTC. The findings of this Tribunal are reproduced below: \"2. The Assessee is an individual and during the previous year relevant to AY 2018- 19 an ordinary resident in India. The Assessee worked with Ernst & Young Australia from 20.11.2017 till 16.05.2019. Since her global income was taxable in India, the Assessee offered to tax salary income earned for services rendered in Australia for the period from December 2017 to March 2018 to tax in India. The Assessee claimed foreign tax credit (\"FTC\") for taxes paid in Australia. 3. There is no dispute that the Assessee is entitled to claim FTC. Rule 128 of the Income Tax Rules, 1962 (Rules) provides for giving FTC and reads thus: \"Foreign Tax Credit. 128. (1) An assessee, being a resident shall be allowed a credit for the amount of any foreign tax paid by him in a country or specified territory outside India, by way of deduction or otherwise, in the year in which the income Printed from counselvise.com Shipij Rathore ITA No. 557/Ind/2025 – AY 2021-22 Page 9 of 15 corresponding to such tax has been offered to tax or assessed to tax in India, in the manner and to the extent as specified in this rule: Provided that in a case where income on which foreign tax has been paid or deducted, is offered to tax in more than one year, credit of foreign tax shall be allowed across those years in the same proportion in which the income is offered to tax or assessed to tax in India.\" One of the requirements of Rule 128 for claiming FTC is provided by Rule 128 (8) & (9) of the Rules and the same reads thus: \"(8) Credit of any foreign tax shall be allowed on furnishing the following documents by the assessee, namely:-- (i) a statement of income from the country or specified territory outside India offered for tax for the previous year and of foreign tax deducted or paid on such income in Form No.67 and verified in the manner specified therein; (ii) certificate or statement specifying the nature of income and the amount of tax deducted therefrom or paid by the assessee,-- (a) from the tax authority of the country or the specified territory outside India; or (b) from the person responsible for deduction of such tax; or (c) signed by the assessee: Provided that the statement furnished by the assessee in clause (c) shall be valid if it is accompanied by,-- (A) an acknowledgement of online payment or bank counter foil or challan for payment of tax where the payment has been made by the assessee; (B) proof of deduction where the tax has been deducted. (9) The statement in Form No.67 referred to in clause (i) of sub- rule (8) and the certificate or the statement referred to in clause (ii) of sub-rule (8) shall be furnished on or before the due date specified for furnishing the return of income under subsection (1) of section 139, in the manner specified for furnishing such return of income.\" 4. The Assessee claimed FTC of Rs. 4,73,779/- u/s. 90 of the Act read with Article 24 of India Australia tax treaty (\"DTAA\") in a revised return of income filed on 31.8.2018. The Assessee had not filed the Form 67 before filing the return of income. On realising the same, the Assessee filed Form 67 in support of claim of foreign tax credit on 18.04.2020. The revised return of income was processed by Centralized Processing Centre (CPC) electronically and intimation u/s 143(1) of the Act on 28.05.2020 was passed disallowing the claim of FTC. Printed from counselvise.com Shipij Rathore ITA No. 557/Ind/2025 – AY 2021-22 Page 10 of 15 5. The Assessee filed a rectification application before the AO on 15.06.2020 & 25.02.2021 and submitted that credit for FTC as claimed in the return should be given. In the rectification order dated 10.03.2021, the AO upheld the action on the ground that the Assessee has failed to furnish Form 67 on or before the due date of furnishing the return of income as prescribed u/s 139(1) of the Act which is mandatory according to Rule 128(9) of the Rules. 6. On appeal by the Assessee, the CIT(A) vide Order dated 03.09.2021 confirmed the Order of AO. The CIT(A) held that the Assessee has not filed Form 67 before the time allowed under section 139(5) of the Act, and therefore Form 67 is non-est in law. The CIT(A) also held that provisions of Rule 128 are mandatory in nature. The CIT(A)rejected the contention of the Assessee that filing of Form 67 is a procedural requirement and noncompliance thereof does not disentitle the Assessee of the FTC. 7. Aggrieved by the order of the CIT(A), the Assessee is in appeal before the Tribunal. The learned counsel for the Assessee submitted that disallowance of FTC is bad in law. He submitted that Section 90 of the Act provides that Government of India can enter into Agreement with other countries for granting relief in respect of income on which taxes are paid in country outside India and such income is also taxable in India. Article 24 of India Australia DTAA provides for credit for foreign taxes. Article 24(4)(a) is relevant in the present context. Same is extracted below: \"4. In the case of India, double taxation shall be avoided as follows: (a) the amount of Australian tax paid under the laws of Australia and in accordance with the provisions of this Agreement, whether directly or by deduction, by a resident of India in respect of income from sources within Australia which has been subjected to tax both in India and Australia shall be allowed as a credit against the Indian tax payable in respect of such income but in an amount not exceeding that proportion of Indian tax which such income bears to the entire income chargeable to Indian tax;\" It was submitted by him that section 90 of the Act read with Article 24(4)(a) provides that Australian tax paid shall be allowed as a credit against the Indian tax but limited to proportion of Indian tax. Neither section 90 nor DTAA provides that FTC shall be disallowed for non- compliance with any procedural requirements. FTC is Assessee's vested right as per Article 24(4)(a) of the DTAA read with Section 90 and same cannot be Printed from counselvise.com Shipij Rathore ITA No. 557/Ind/2025 – AY 2021-22 Page 11 of 15 disallowed for non-compliance of procedural requirement that is prescribed in the Rules. 8. It was further submitted by him that Section 295(1) of the Act gives power to the CBDT to prescribe Rules for various purposes. Section 295(2)(ha) gives power to the Board to issue Rules for FTC. The relevant extract is as follow: \"(2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters:-- ............... (ha) the procedure for granting of relief or deduction, as the case may be, of any income-tax paid in any country or specified territory outside India, under section 90 or section 90A or section 91, against the income-tax payable under this Act;\" 9. It was submitted that the Board has power to prescribe procedure to granting FTC. However, the Board does not have power to prescribe a condition or provide for disallowance of FTC. The procedure prescribed in Rule 128 should therefore be interpreted in this context. Rule 128 is therefore a procedural provision and not a mandatory provision. 10. It was further submitted that Rule 128(9) provides that Form 67 should be filed on or before the due date of filing the return of income as prescribed u/s 139(1) of the Act. However, the Rule nowhere provides that if the said Form 67 is not filed within the above stated time frame, the relief as sought by the assessee u/s 90 of the Act would be denied. The learned counsel for the Assessee submitted that in case the intention was to deny the FTC, either the Act or the Rules would have specifically provided that the FTC would be disallowed if the assessee does not file Form 67 within the due date prescribed under section 139(1) of the Act. It was submitted that that there are many sections in the Act which specifically deny deduction or exemption or relief in case the return is not filed within prescribed time. Reference was made to section 80AC, 80-IA(7), 10A(5) and 10B(5). Such language is not used in Rule 128(9). Therefore, such condition cannot be read into Rule 128(9). 11. It was further submitted that Filing of Form 67 is a procedural/directory requirement and is not a mandatory requirement. It was submitted that violation of procedural norm does not extinguish the substantive right of claiming the credit of FTC. Reliance was placed on the decision of the Hon'ble Supreme Court, in the case of Mangalore Chemicals Printed from counselvise.com Shipij Rathore ITA No. 557/Ind/2025 – AY 2021-22 Page 12 of 15 & Fertilizers Ltd. v. Deputy Commissioner, (1992 Supp (1) Supreme Court Cases 21) wherein it observed that: \"The mere fact that it is statutory does not matter one way or the other. There are conditions and conditions. Some may be substantive, mandatory and based on considerations of policy and some others may merely belong to the area of procedure. It will be erroneous to attach equal importance to the non-observance of all conditions irrespective of the purposes they were intended to serve.\" Further reliance was placed on the decision of the Hon'ble Supreme Court, in the case of Sambhaji and Others v. Gangabai and Others, reported in (2008) 17 SCC 117, wherein it has been held that procedure cannot be a tyrant but only a servant. It is not an obstruction in the implementation of the provisions of the Act, but an aid. The procedures are handmaid and not the mistress. It is a lubricant and not a resistance. A procedural law should not ordinarily be construed as mandatory; the procedural law is always subservient to and is in aid to justice. It was submitted that filing of Form 67 as per the provisions of section 90 read with Rule 128(9) is a procedural law and should not control the claim of FTC. 12. It was further submitted that even in the context of 80IA(7), 10A(5) etc, wherein there is specific provision for disallowance of deduction/exemption if audit report is not filed along with the return, various High Courts have taken a view that filing of audit report is directory and not mandatory. Reliance in this regard was placed on the following cases: • CIT vs Axis Computers (India) (P.) Ltd [2009] 178 Taxman 143 (Delhi) • PCIT, Kanpur vs Surya Merchants Ltd [2016] 72 taxmann.com 16 (Allahabad) • CIT, Central Circle vs American Data Solutions India (P.) Ltd [2014] 45 taxmann.com 379 (Karnataka) • CIT-II vs Mantec Consultants (P.) Ltd [2009] 178 Taxman 429 (Delhi) • CIT vs ACE Multitaxes Systems (P.) Ltd [2009] 317 ITR 207 (Karnataka). 13. It was submitted that as per the provisions of section 90(2) of the Act, where the Central Government of India has entered into a DTAA, the provisions of the Act would apply to the extent they are more beneficial to a taxpayer. Therefore, the provisions of DTAA override the provisions of the Act, to the extent they are beneficial to the assessee. Reliance in this regard is placed on the following cases and circulars: Union of India v. Azadi Bachao Andolan [2003] 263 ITR 706 (SC) CIT v Eli Lily & Co (India) P Ltd (2009) 178 Taxman 505 (SC) GE India Technology Centre P Ltd v CIT (2010) 193 Printed from counselvise.com Shipij Rathore ITA No. 557/Ind/2025 – AY 2021-22 Page 13 of 15 Taxman 234 (SC) Engineering Analysis Centre of Excellence P Ltd v CIT (2021) 125 taxmann.com 42 (SC) (Pg 106-109 of PB 2-Para 25 & 26) CBDT Circular No 333 dated 2/4/82 137 ITR (St.) It was submitted that when there is no condition prescribed in DTAA that the FTC can be disallowed for non- compliance of any procedural provision. As the provisions of DTAA override the provisions of the Act, the Assessee has vested right to claim the FTC under the tax treaty, the same cannot be disallowed for mere delay in compliance of a procedural provision. 14. The learned DR reiterated the stand of the revenue that rule 128(9) of the Rules, is mandatory and hence the revenue authorities were justified in refusing to give FTC. He also submitted that the issue was debatable and cannot be subject matter of decision in Sec.154 proceedings which are restricted in scope to mistakes apparent on the face of the record. 15. In his rejoinder, the learned counsel for the Assessee submitted that Form No.67 was available before the AO when the intimation u/s.143(1) of the Act dated ITA No.680/Bang/2022 Vinodkumar Lakshmipathi, Bangalore Page 9 of 10 28.5.2020 was passed. He pointed out that the AO or the CIT(A) did not dismiss the Assessee application for rectification u/s.154 of the Act on the ground that the issue was debatable but rather the decision was given that the relevant rule was mandatory and hence non-furnishing of Form No.67 before the due date u/s.139(1) of the Act was fatal to the claim for FTC. 16. I have given a careful consideration to the rival submissions. I agree with the contentions put forth by the learned counsel for the Assessee and hold that (i) Rule 128(9) of the Rules does not provide for disallowance of FTC in case of delay in filing Form No.67; (ii) filing of Form No.67 is not mandatory but a directory requirement and (iii) DTAA overrides the provisions of the Act and the Rules cannot be contrary to the Act. I am of the view that the issue was not debatable and there was only one view possible on the issue which is the view set out above. I am also of the view that the issue in the proceedings u/s.154 of the Act, even if it involves long drawn process of reasoning, the answer to the question can be only one and in such circumstances, proceedings u/s.154 of the Act, can be resorted to. Even otherwise the ground on which the revenue authorities rejected the Assessee's application u/s.154 of the Act was not on the ground that the issue was debatable but on merits. I therefore do not agree with the submission of the learned DR in this regard. Printed from counselvise.com Shipij Rathore ITA No. 557/Ind/2025 – AY 2021-22 Page 14 of 15 17. In the result, the appeal is allowed.\" 6. In view of the above order of the Tribunal, we direct the AO to give credit for foreign tax as per Form 67 filed on 22.9.2018 before Ld. CIT(A) after due verification. 7. In the result, the appeal filed by the assessee is partly allowed for statistical purposes.\" 5. Respectfully following the above judgment, we direct the AO to give credit for foreign tax credit as per Form No.67 filed on 22/10/2022 after due verification. 6. In the result, appeal of the assessee is allowed for statistical purposes.” 4.4 Thus, it is clear that Bangalore benches of the tribunal has taken a consistent view on this issue as in the earlier decision in case of Ms. Brinda Ramkrishna vs. ITO (supra) has also considered this issue and held that Rule 128(9) of the Income tax Rules does not provide for disallowance of foreign tax credit in case of delay in filing in form 67 as it is directory requirement not mandatory. Further the DTAA overrides the provisions of the Act and Rule cannot be contrary to the Act. Following said order the Bangalore Benches of the Tribunal in case of Deepak Shimoga Padmaraju vs. ADIT (supra) has taken a same view. Accordingly in view of decisions cited above we find that this issue is covered by the decision relied upon by the assessee and consequently the AO is directed to allowed the claim of foreign tax credit after verification of the quantum. 5. In the result, the appeal of the assessee is allowed for statistical purposes.” 10. Respectfully considering the peculiar facts of present case and following the above decision of co-ordinate bench, we are of the considered view that the assessee is entitled to the relief u/s 90/90A, subject to verification of the correctness of the claim and quantum by AO. Accordingly, we direct the AO to verify the Form No. 67 filed by assessee on 27.12.2024 for AY 2021-22 and grant relief u/s 90/90A to assessee in accordance with law. Printed from counselvise.com Shipij Rathore ITA No. 557/Ind/2025 – AY 2021-22 Page 15 of 15 11. Resultantly, this appeal is allowed for statistical purpose. Order pronounced in open court on 19/02/2026 Sd/- Sd/- (PARESH M. JOSHI) (B.M. BIYANI) JUDICIAL MEMBER ACCOUNTANT MEMBER Indore िदनांक/Dated : 19/02/2026 Patel/Sr. PS Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order E COPY Senior Private Secretry Income Tax Appellate Tribunal Indore Bench, Indore Printed from counselvise.com "