The Jaipur bench of the Income Tax Appellate Tribunal (ITAT) held that the delay in filling Form 67 doesn’t result in disallowance of the Foreign Tax Credit (FTS) under Rule 128(9) of the Income Tax Rules, 1962.
The assessee, Suresh Kumar Doodi, a salaried individual, e-filed his return of income declaring Rs.1,69,36,787/- as gross total income and paid the self-assessment tax of INR 24,70,738/- after reducing the eligible tax credit. The same total income of Rs. 1,67,44,980 was declared after a deduction of Rs. 1,91,803/- under Chapter VI-A of the Income Tax Act, 1961.
The Assessing Officer held that the assessee was required to file a return of income as well as form 67 before the due date specified for furnishing the return of income under Section 139(1) of the Income Tax Act. Therefore, the assessee is not eligible for relief under Section 90/90A of the Income Tax Act.
The Authorized Representative submitted that the assessee has worked two months in the State of America. Though the return of income was filed belated under Section 139(4) of the Income Tax Act and Form No. 67 was filed within one week of the belated return these being the only procedural lapse on the part of the assessee and the Assessing Officer has denied the foreign tax credit as claimed by the assessee.
The Departmental Representative submitted that Form No. 67 is required to be filed before the due date of filing of return of income under rule 128 which is a mandatory condition and thus supported the finding of the lower authorities.
In the case of Ms. Brinda Rama Krishna v.ITO [2022] 135 taxmann.com 358 it was held that “one of the requirements of Rule128 for claiming FTC is that Form 67 is to be submitted by assessee before filing of the returns and that this requirement cannot be treated as mandatory, rather it is directory in nature. This is because Rule 128(9) does not provide for the disallowance of FTC in case of delay in filing Form No 67.
The Two-member bench comprising of S. Seethalakshmi (Judicial member) and Rathod Kamlesh Jayantbhai (Accountant member) held that the assessee is eligible for foreign tax credit, as he has filed in form 67 before completion of the assessment. The claim of foreign tax credit cannot be denied and the Assessing Officer was directed to allow the FTC based upon the belated form No. 67 filed by the assessee.
Thus, the appeal of the assessee was allowed.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
