This legal summary addresses the appeal of Rani Khanna against the decision of the National Faceless Appeal Centre (NFAC), Delhi for the Assessment Year 2021-22, pertaining to the denial of foreign tax credit due to the delayed filing of Form No.67. The tribunal’s decision revolves around the interpretation of procedural compliance versus substantive rights under the Income Tax Act.
Rani Khanna appealed against the orders of the NFAC which denied her foreign tax credit claims for the assessment year 2021-22. The denial was based solely on her failure to file Form No.67 within the prescribed timeframe, which is necessary for claiming tax credits on taxes paid outside India.
The tribunal examined the applicability of Rule 128(9) of the Income Tax Rules and its interpretation in the light of past precedents, particularly the decisions of the ITAT Mumbai Bench. It noted that previous rulings have established that such procedural requirements should not negate a taxpayer’s substantive rights to claim tax credits. Consequently, the tribunal directed that the claim should be adjudicated on its merits, disregarding the delay in filing.
The tribunal’s decision to allow Rani Khanna’s claims underscores a significant aspect of tax jurisprudence, where procedural lapses do not necessarily preclude taxpayers from exercising their substantive rights. This outcome not only benefits the appellant but also sets a precedent for similar cases, ensuring that taxpayers are not unduly penalized for procedural delays under certain conditions.
Rani Khanna vs. DCIT, Circle-28(1), New Delhi – ITA 2542/DEL/2022 for Assessment Year 2021-22
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