Resident of India, Pensioner of UK Cannot be Denied Benefit of Foreign Tax Credit: ITAT [Read Order]

The Income Tax Appellate Tribunal (ITAT), Indore Bench, held that if an individual is a resident of India but a pensioner of the United Kingdom (UK) even then they cannot be denied the benefit of foreign tax credit.

Aggrieved by the order passed by the Commissioner of Income Tax (Appeals) [ CIT(A) ] under Section 250 for the Assessment Year 2023-24, corresponding to the previous year period from 01.04.2022 to 31.03.2023, the assessee, a resident of India since 2023 filed an appeal before the ITAT.

She filed her return on income (ROI) declaring income of INR 35,30,130/- and filed Form No. 67 for availment of foreign tax credit (FTC) of INR 1,49,437/- being Tax Deducted at Source (TDS) in UK on pension income.

The return was processed under Section 143(1) in which credit of foreign tax claimed under Section 90/90A was disallowed.

The assessee preferred first appeal under Section 246A before CIT(A) who had dismissed it, giving the reasoning that the filing was not done within the time limit as prescribed. The Commissioner additionally noted that any taxpayer with a foreign income source attracts double taxation and the government provides FTC to prevent this for the same income.

Therefore, the assessee, Hemlata Patel, preferred the second appeal before ITAT. The counsel for the assessee claimed and provided documents in favour of the argument that the Form was filed on the date of the ROI i.e., 31.12.2023.

The tribunal made note of the reasonings given in the decision by the CIT and observed that the late date of filing of the return under Section 139(1) was 31.07.2023 and the delay in filing of Form No. 67 cannot be a ground to deny of the substantive benefit of FTC as has been held in Ashish Sood v. DCIT (2024).

Conclusively, the two member bench of Bhagirath Mal Biyani (Accountant Member) and Paresh M Joshi (Judicial Member), remanded the case back to the Assessing Officer (AO) to verify Form No. 67.

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates