This appeal by Samir Sood challenges the order of NFAC, New Delhi, which denied the Foreign Tax Credit (FTC) amounting to Rs 1,14,217 due to the late notification of Form 67, relevant for the assessment year 2017-18. The appeal was filed as the appellant believed the denial was both erroneous in law and facts.
The primary issues in this case revolved around the procedural and substantive rights related to the Foreign Tax Credit, particularly the timing of the notification of Form 67, and its implications on the rights granted under the Double Taxation Avoidance Agreement (DTAA) with the USA.
The appellant argued that the requirement for Form 67 was notified after the filing of the tax return, thus it should not affect the entitlement to the FTC. Furthermore, the appellant contested that the procedural requirements under Rule 128 cannot override substantial rights under the DTAA.
The Tribunal restored the matter to the file of the CIT(A) for fresh adjudication, acknowledging the need to address the substantive grounds raised by the appellant, which were not initially adjudicated upon due to non-prosecution.
The case highlights significant issues related to the administration of tax laws and the rights of taxpayers under international agreements. The final decision to restore the case for a comprehensive review underscores the importance of procedural fairness and the substantive rights of taxpayers.
The final judgment was pronounced on July 18, 2023, directing that the appeal be allowed for statistical purposes, which signifies that the case will be re-evaluated by the CIT(A).
Case Analysis: Denial of Foreign Tax Credit in Samir Sood vs. NFAC-CIT Appeal, ITA No.2669/Del/2022
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