The Bangalore Bench of the Income Tax Appellate Tribunal ( ITAT ) passed a decision to condone a delay of 1809 days in a matter regarding disallowance of Foreign Tax Credit ( FTC ), while also advising the Assessing Officer ( AO ) to conduct due verification of Form 67.
Ram Avadhanulu Jonnavithula, the Appellant-Assessee had filed an Income Tax Appeal against an ex parte order passed by the Commissioner of Income Taxes ( CIT(A) ) at the National Faceless Appeal Centre, Delhi (NFAC) with regards to the financials of the Assessee for the Assessment Year (A.Y.) 2017-18.
Comprehensive Guide of Law and Procedure for Filing of Income Tax Appeals, Click Here
The Assessee had filed their returns of income for the relevant A.Y. on 05.8.2017 declaring gross total income of Rs.90,04,118. The Assessee was subsequently served with intimation under Section 143(1) of the Income Tax Act, 1961 by which FTC of Rs.7,27,493 was disallowed.
The disallowance was contested before the CIT(A) with a delay of 1809 days which was dismissed by the CIT(A) noting that the Assessee had failed to adduce any reasonable cause explaining the significant delay; furthermore, the CIT(A) observed that the appellant had approached the First Appellate Authority without filing due return of income under Section 139 of the Act and Form 67 as well – all being violative of the provisions of Rule 128(9) of the Income Tax Act, 1961.
CA Navneeth N. Kini, appearing for the Appellant, among other submissions contended that multiple rectification petitions had been filed by the Appellant, all of which were rejected by the Centralized Processing Centre (CPC).
Comprehensive Guide of Law and Procedure for Filing of Income Tax Appeals, Click Here
The Departmental Representative, Neha Sahay reiterated the observation of the CIT(A) that the Assessee had failed to file return under Section 139(1) of the Income Tax Act and Form 67 therein.
Appreciating a timeline of events adduced by the Assessee, the two member Bench of Income Bangalore Income Tax Appellate Tribunal composed by George George K., Vice President And Laxmi Prasad Sahu, Accountant Member observed that the Assessee has bonafide reasonable cause for the delay of 1809 days in filing the appeal, and proceeded to condone the delay in light of the Supreme Court decision in Collector, Land Acquisition Vs. MST. Katiji and Others (1987).
Regarding the disallowance of FTC, the Bench observed that the Assessee is a salaried employee deriving income from salary, house property, capital gains, dividend and interest income. It was observed that the CPC had erred in disallowing the FTC of Rs.7,27,493 citing delay, even though the Assessee had belatedly filed Form 67.
In line with the decision of a coordinate Bench of the Bangalore ITAT in Uma Maheshwar Rao Vendavelli vs Deputy Commissioner Of Income Tax (2024), the Bench directed the concerned AO to allow the FTC claims following due verification of Form 67.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
