Relief u/s.90/90A

This query is : Resolved

sumitha (Querist)
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09 August 2022 A friend of mine, having onsite salary ,filed his original ITR-1 on 31.7.2019. wrongly claimed the relief under DTAA against S.89(1). later filed the revised return on 9.1.2020 claiming relief u/s.90/90A in ITR2. The IT dept. has refused to grant the relief stating the original return was filed on 9.1.2020 (ie. after the due date). They have raised a demand against that onsite income for which tax has been paid in that foreign country.
The issue relates to the financial year 2018-19.AY 2019-20.
Can anyone advice on what to do?

Adv. Ravish Bhatt, ADIT, CIOT

Adv. Ravish Bhatt, ADIT, CIOT (Expert)
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13 August 2022 Availing foreign tax credit is governed by s.90 read with rule 128 of Income Tax Rules. Language of s.90 nowhere states about filing of return in prescribed time limit being a precondition for availing FTC. Rule 128(9) however does provide that:-

“9) The statement in Form No.67 referred to in clause (i) of sub-rule (8) and the certificate or the statement referred to in clause (ii) of sub-rule (8) shall be furnished on or before the due date specified for furnishing the return of income under sub-section (1) of section 139, in the manner specified for furnishing such return of income.”

When a relief was sought to be claimed u/s.89(1), rule 128(9) was likely not complied with.

However, in my view that should not result in disallowing FTC. Rule 128(9) does not say as such that in case of not complying with the requirements postulated therein, FTC should not be allowed. Anyway, rule 128(9) is only a procedural requirement and could not dictate the terms of DTAA or any other statutory provisions. Also s.90 does not provide for any requirement that for availing FTC, return must be filed before due date specified for furnishing return.

Suggestion: Take up the matter in higher forum/ appeal after consulting International Tax Specialist/tax lawyer/ CA.

Author: Advocate Ravish Bhatt
Gmail: ravishdbhatt@gmail.com
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