The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) has held that the Foreign Tax Credit could not be denied on mere late filing of form No.67 as per India-Tanzania Double Taxation Avoidance Agreement (DTAA).
The assessee, Manoj Kaushik prasad Jingar, was an individual. The residential status of the assessee for A.Y. 2020-21 was resident but not ordinarily resident in India. The return of income for the A.Y. 2020-21 was filed declaring total income. The assessee had offered to tax the global income which included income earned in India and in Tanzania. The assessee claimed relief under Section 90 of the Income Tax Act, 1961 for TDS deducted in Tanzania as per the DATA within the Governments of India and Tanzania.
The assessee also filed the required Form No.67 but the said Form was filed belatedly. The return was processed by CPC and the assessee received intimation under Section 143(1) of
the Income Tax Act from CPC wherein the CPC did not give the relief under Section 90 of the Income Tax Act as claimed by the assessee and raised demand.
The assessee filed a rectification application under Section 154 of the Income Tax Act to the CPC. The CPC issued rectification order without making any changes in the original intimation under Section 143(1) of the Income Tax Act and again raised demand in rectification order under Section 154 of the Income Tax Act and confirmed the original
demand.
Vimal Shukla on behalf of the assessee submitted that the delay in filing the Form No.67 was due to the delay in obtaining the certificate of tax withheld issued by the Tanzanian
Revenue Authorities. The assessee had offered income earned in Tanzania to tax and being eligible, claimed relief under Section 90 of the Income Tax Act as per the DTAA between the Governments of India and Tanzania for avoidance of double taxation.
Saumya Pandey Jain, on behalf of the revenue submitted that the assessee had not declared the salary in his return and, therefore, the assessee at this juncture could not say that the belated filing of Form No.67 could be overlooked as it is mandatory requirement for foreign
tax credit whether to grant or not as per provisions of the Income Tax Statute.
A Single Bench of Suchitra Kamble, (Judicial Member) allowed the appeal filed by the assessee holding that the late filing of Form No.67 could not deny the entitlement of the assessee the benefit of treaty when the salary earned was from Tanzania and there is DTAA between India and Tanzania.
The Bench further held that it was undoubtedly clear that the salary was earned outside India and the assessee had paid tax on the said element on foreign country and, therefore, the assessee could not be taxed twice on the same amount and would amount to double taxation.
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