The Income Tax Appellate Tribunal (ITAT), Visakhapatnam Bench, has recently, in an appeal filed before it, directed the granting of foreign tax credit, on the ground that the return of income and statement in Form-67 were filed within due date.
The aforesaid observation was made by the Visakhapatnam ITAT, when an appeal was filed before it by the Assessee , as directed against the order of the Commissioner of Income Tax (Appeals), Hyderabad [CIT(A)],vide DIN & Order No. ITBA/APL/S/250/2022-23/1044862537(1), dated 23/08/2022,arising out of the order passed under Section 143(1) of the Income Tax Act, 1961, dated 24/12/2021 for the AY 2020-21.
The brief facts of the case were that the assessee was an having residential status of Resident and Ordinarily Resident, and the assessee filed his return of income on 31/3/2021, admitting a total income of Rs. 83,77,420/-for the AY 2020-21 and also claimed a foreign tax credit of Rs. 17,55,145/-.
The return of income was summarily processed by CPC, which denied the foreign tax credit as claimed by the assessee.
Aggrieved by the order of the CPC, the assessee filed an appeal before the CIT(A), Hyderabad, who, after considering the provisions of Rule 128(1) of the Income Tax Rules, 1962, dismissed the appeal of the assessee, stating that the assessee had not filed a statement in Form-67 on or before the due date specified for filing the return of income under Section 139(1) of the Income Tax Act.
And, it is being aggrieved by this order of the CIT(A), that the assessee has preferred the instant appeal before the Tribunal.
Hearing the opposing contentions of both sides as submitted by Sri V. Balaji, the AR on behalf of the assessee, and by Sri ON Hari Prasada Rao, the Sr. AR on behalf of the Revenue, and thereby perusing the materials available on record, the ITAT observed:
“We have heard both the parties and perused the materials available on record as well as the orders of the Ld. Revenue Authorities. Admittedly, the foreign tax credit is claimed by the assessee by filing the statement in Form-67 on 31/3/2021. We find that as argued by the Ld. AR, The Taxation And Other Laws (Relaxation And Amendment Of Certain Provisions) Act, 2020 allows any statement to be filed on or before 31/3/2021. Further, the Ld. AR also demonstrated that the assessee is subjected to audit U/s. 44AB of the Act since the assessee is engaged in the business of trading in Futures & Options and has claimed a loss during the impugned assessment year. We therefore find that as per Sl.No.4(b) of the Press Release for extension of time limits dated 30/12/2020, the period has been extended for filing the return of income upto 15/2/2021. We therefore find that the assessee has rightly filed the return of income on or before the due date for filing the return of income and also the statement in Form-67 within the extended due date of 31/3/2021.”
“In the case MuralikrishnaVaddi, relied on by the Ld. DR the facts are distinguishable inasmuch as in that case Form 67 was filed after commencement of scrutiny proceedings by the Ld. AO and after a delay of more than 2 years. However, in the present case the assessee has filed the return of income and the statement in Form-67 within the respective due dates as extended by the Ministry of Finance, Government of India. We are therefore of the considered view that the foreign tax credit of Rs. 17,55,145/- shall be allowed to the assessee.”, the ITAT Panel of Duvvuru RL Reddy, the Judicial member, along with S. Balakrishnan, the Accountant Member added.
Thus, the ITAT finally held:
“The Ld. AO is directed to give the credit to the foreign tax credit as claimed by the assessee after verifying the correctness of the claim made by the assessee. It is ordered accordingly. In the result, appeal filed by the assessee is allowed.”
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