Delay in Filing of Form 67 not ground to Deny Relief u/s 90 of Income Tax: ITAT [Read Order]

The Kolkata Bench of the Income Tax Appellate Tribunal ( ITAT ) held that filing of form 67 is not mandatory in 128 (9) of Income Tax Rules,1962, and delay in filing of form 67 cannot be a ground for denial of Foreign Tax Credit under Section 90 of the Income Tax Act.

Ratanlal Bhura (assessee) is a resident individual who filed his Income Tax Return declaring gross income of Rs.15,69,370 for the assessment year 2020-2021. He claimed tax relief of Rs 3,02,014 under Section 90 of the Income Tax Act,1961. As it was denied by the assessing officer, the order was challenged before the Commissioner of Income Tax (Appeals) [CIT(A)].

Comprehensive Guide of Law and Procedure for Filing of Income Tax Appeals, Click Here

Despite several judgments holding that filing of form 67 is not mandatory but only directory, the CIT(A) dismissed the appeal stating that it was mandatory to file form 67 as per rule 128(9) of  Income Tax Rules,1962.

Aggrieved by the order of CIT(A), the assessee preferred an appeal before ITAT and submitted several judicial precedents of ITAT which held that filing of form 67 is a procedural formality. The counsel for the assessee contended that mere delay in filing could not be fatal and also contended that mandatory filing of form 67 as stated by CIT(A) is erroneous and should be set aside.

Comprehensive Guide of Law and Procedure for Filing of Income Tax Appeals, Click Here

The two-member bench comprising Pradip Kumar Choubey ( Judicial Member ) and Sanjay Awasthi ( Accountant member ) referenced Sobhan Lal Gangopadhyay vs ADIT, CPC, Bengaluru which held that rule 128(9) of the Income Tax Rules does not provide any consequences for non-compliance of filing form 67 and therefore it is not mandatory but only directory in nature.

Thus the tribunal found CIT(A)’s order was erroneous as there was no reason specified in the order for taking a different view from the decision of the superior court and that cannot be legally justified. The tribunal observed that several judgments held that filing of form 67 is directory but not mandatory in nature. Thus, the tribunal held that delay in filing of form 67 cannot be grounds for denying relief u/s 90 of the Income Tax Act. The appeal of the assessee was allowed.

To Read the full text of the Order CLICK HERE

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