Foreign Tax Credit Allowable If Form 67 filed Before Income Tax Due Date: ITAT grants Relief to Actress Sonakshi Sinha [Read Order]

The Income Tax Appellate Tribunal (ITAT), Mumbai bench, while allowing an appeal by Bollywood actress Sonakshi Sihna, has held that the claim of foreign tax credit is allowable even if the form 67 is filed before the income tax due date.

A bench of Shri Prashant Maharishi, AM and Shri Sandeep Singh Karhail, JM has observed that the actressis eligible for foreign tax credit, as she has filed form number 67 before completion of the assessment, though not in accordance with rule 128 (9) of The Income Tax Rules, as per which, such form shall be filed on or before the due date of filing of the return of income.

The assesseeis an actor acting in films and provides services for promotion and marketing of brands of goods, services, and events. The assessee has claimed foreign tax credit amounting to ₹ 2,921,327/– however from the filing portal it was noted that assessee has uploaded form number 67 for claiming foreign tax credit on 20/1/2020.

The Assessing Officer denied the claim of foreign tax credit by the assessee on the ground that form number 67, required to be filed for claiming foreign tax credit on or before the date of filing of the return terms of rule 128 (9) of the Income Tax Rules 1962, was filed belatedly.

The two-member bench observed that assessee filed return of income u/s 139 (1) of the income tax act.

Rule 128 (9) of the Income Tax Rules 1962 provides that 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.

Allowing relief to the assessee, the Tribunal held that “Admittedly, Rule 128 does not prescribe denial of credit of FTC. Further the Act i.e. section 90 or 91 also do not prescribe timeline for filing of such declaration on or before due date of filing of ROI. Further rule 128 (4) clearly provides the condition where the foreign tax credit would not be allowed. Rule 128 (9) does not say that if prescribed form would not be filed on or before the due date of filing of the return no such credit would be allowed. Further by the amendment to the rule with effect from 1 April 2022, the assessee can file such form number 67 on or before the end of the assessment year. Therefore, legislature in its own wisdom has extended such date which is beyond the due date of filing of the return of income.”

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates