Substantial justice takes precedence over procedural errors; allow claim of FTC under modified return under section 92CD(1), …India Income Tax Case
Background
Regulatory
In a recent ruling, the Delhi ITAT emphasized that procedural errors should not lead to denial of legitimate tax benefits and substantial justice should prevail over procedural technicalities. ITAT clarified that a modified return filed under section 92CD(1) pursuant to an APA is distinct from a revised return filed under section 139(5). Even though the Assessee filed a modified return instead of a revised return after the APA was finalized, the ITAT held that the Assessee was still eligible for the FTC claim if it met the necessary criteria.
Legal Case under above ruling is Ericsson India Global Services Pvt. Ltd Vs Additional Commissioner of Income Tax
Nangia Andersen LLP’s Take
This ruling sets a favorable precedent for taxpayers seeking to claim the FTC in modified returns filed under section
92CD(1) in connection with APAs. It emphasizes that substantial justice is more important than procedural mistakes,
thus ensuring that eligible taxpayers won’t lose out on their rightful benefits due to procedural errors.
