Foreign Tax Credit: Form 67 Shall be filed on or before Income Tax Return Due Date, rules ITAT [Read Order]

The Visakhapatnam bench of the Income Tax Appellate Tribunal (ITAT) comprising Shri Duvvuru Rl Reddy, Judicial Member & Shri S Balakrishnan, Accountant Member has observed that in order to avail the deduction of foreign tax credit, it is mandatory to file the statement in Form-67 on or before the income tax due date.

The assessee, Muralikrishna Vaddi, is a salaried employee, who has filed his return of income on 27/03/2019 admitting total income of Rs.1,68,47,360/-. The assessee claimed foreign tax credit of Rs. 37,63,898/- while filing the return of income but has not filed Form-67 as prescribed U/s. 128(9) of the IT Rules, 1961. The case was selected for limited scrutiny on the issue of allowing relief U/s. 90/91 of the Act. Accordingly, statutory notices u/s. 143(2) and 142(1) were issued on the assessee. The assessee furnished the replies through the assessee’s representative as required by the AO and also filed Form 67 dated 10/02/2021 for the AY 2018-19.

The AO has invoked the provisions of Rule 128(9) of the IT Rules, 1962 and disallowed the foreign tax credit amounting to Rs. 37,63,898/- for non-filing of From 67 before the due date of filing of the return under section. 139(1) of the Act.

The division bench has observed that “A resident taxpayer who has credit for the amount of any foreign tax paid in a country outside India by way of deduction or otherwise will be required to furnish the statement in Form 67 on or before the due date specified for furnishing the return of income under sub-section (1) of Section 139 to claim credit of such taxes. Form 67 will also be required to be furnished in a case the carry backward of loss of the current year results in refund of foreign tax for which credit has been claimed in any previous years.” Sri A. Chandrasekhar appeared for the assessee.

To Read the full text of the Order CLICK HERE

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