The requirement to file Form 67 for FTC claims is procedural; hence, non-compliance does not extinguish the right to claim relief under section 90 of the Income Tax Act.

ORDER

PER: RATHOD KAMLESH JAYANTBHAI, A.M.

This appeal is filed by the assessee aggrieved from the order of the National Faceless Appeal Centre, Delhi [Here in after referred as (NFAC)] for the assessment year 2021-22 dated 12.10.2023, which in turn arises from the order passed by the AO passed under Section 154 of the Income tax Act, 1961 (in short 'the Act') dated 23.10.2022.

2. The assessee has taken following grounds in this appeal;

“1. The order of the assessing officer is erroneous on the facts and in the law. On the facts and in the circumstances of the case he should be considered the relief u/s 90 of IT Act, 1961 or foreign tax credit (FTC) rule 128(9).

2. The assessing officer is not justified, because he is not allowing the relief u/s-90 of IT Act, 1961 (FTC rule 128(9).

Where facts and evidence relating to the TAX DEDUCTION CERTIFICATE (TDS) already submit to the Assessing Officer during the course of rectification request u/s- 154. On the facts and evidence submitted to the AO of the case he ought to have accepted TDS as sufficient evidences have been allowing the relief u/s-90 (FTC rule 128(9).

3. As per the provisions of the Double Taxation Avoidance Agreement of INDIA and BELGIUM country, Stated that if a resident of India derives income which, in accordance with the provisions of the Agreement, may be taxed in Belgium, India SHALL allow as a deduction from the tax on the income of that resident an amount equal to the income-tax paid in Belgium whether directly or by deduction. Such deduction shall not, however, exceed that part of the income-tax (as computed before the deduction is given) which is attributable to the income which may be taxed in Belgium. Further, where such resident is a company by which surtax is payable in India, the deduction in respect of income-tax paid in Belgium shall be allowed in the first instance from income-tax payable by the company in India and as to the balance, if any, from surtax payable by it in India. (DTAA with Belgium, Article-23, Pragragh-2, clause (a)).”

3. The fact as culled out from the records is that the appellant is an Individual and an ordinary resident in India during the Assessment Year 2021-22 assessee worked with EBE NV - BACCO Belgium from 30 September, 2019 till 25 July, 2020. He offered to tax salary income earned for services rendered in Belgium as his Global Income was taxable in India. He claimed foreign tax credit (FTC) for taxes paid in Belgium. The ld. AO noted that the Assessee did not file form 67 before filing the income tax return (ITR). Thus, he filed form 67 in support of foreign tax credit claim later after filing of ITR. CPC processed the assessee's return without allowing claim of FTC (Rule-129). Assessee filed rectification application before Assessing Officer (AO) asking for FTC claim. However, AO denied it on the ground that assessee had failed to furnish form 67 on or before the due date of furnishing of ITR. This is a mandatory requirement to claim the benefit of FTC in accordance with rule 128 (9) of the Income tax Rules.

Assessing Officer the order and Aggrieved For more details, please refer DTAA (with Belgium country).

4. Aggrieved from the said action of the Assessing Officer, assessee prefer the appeal before the ld. CIT (A) with a prayer to allow the relief u/s 90. Apropos to the grounds so raised the relevant finding of the ld. CIT(A)/NFAC is reiterated here in below:-

“4. APPELLATE FINDINGS:

4.1 Ground of Appeal Nos. 1to4: In these grounds, the appellant has taken a plea that the AO has erred in not allowing relief under section 90 of the Income Tax Act, 1961 (FTC Rule 128(9)) whereas the appellant filed Form No. 67 after receiving intimation order and submitted to the AO during rectification proceedings.

4.2 During the appellate proce