The New Delhi bench of the Income Tax Appellate Tribunal (ITAT) held that the violation of procedural norms does not extinguish the substantial right of claiming the credit of Foreign Tax Credit (FTC) under section 90 of the Income Tax Act,1961.
Vikash Daga, the appellant assessee was an individual Indian citizen filed his return of income on his global income that was taxable in India. The assessing officer denied the claim of foreign tax credit and the Commissioner of Income Tax (Appeals) for confirming the rejection made by the assessing officer.
Thus the assessee appealed against the order passed by the Commissioner of Income Tax (Appeals) for confirming the rejection of the claim of foreign tax credit filed by the assessee.
Sanjeev Kachial, the counsel for the assessee contended that the return of income was filed and as form 67 could not be submitted due to technical issues later the same was submitted technically which was not considered by the assessing officer and thereby rejected the claim of a foreign tax credit.
It was further submitted that the rejection made by the assessing officer was not as per the law and was liable to be deleted.
Vivek Vardhan, the counsel for the revenue relied on the decisions made by the lower authorities and contended that the form 67 was submitted by the assessee after the due date of filing of the return of income.
The bench observed that filing Form 67 was a procedural / directory requirement and was not a mandatory requirement. Therefore, violation of procedural norms does not extinguish the substantive right of claiming the credit of foreign tax credit (FTC).
The two-member bench comprising Saktijit Dey (Judicial ) and N. K. Billaiya (Accountant) directed the assessing officer to allow the credit of foreign tax credit (FTC) while allowing the appeal filed by the assessee.
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