The Ahmedabad Bench of Income Tax Appellate Tribunal held that procedural delay in filing Form 67 cannot be a ground to deny Foreign Tax Credit (FTC).
Narendra Vishnubhai Mistry,appellant-assessee, filed his return of income on 29.12.2021, declaring ₹50,62,800. He received an intimation on 22.03.2022, where the Foreign Tax Credit (FTC) was denied, and a demand of ₹12,50,630 was raised. The assessee later filed a rectification request under Section 154, but it was rejected on 12.09.2023 due to the delay in filing Form No. 67.
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The assessee, aggrieved by the Assessing Officer (AO)’s order, appealed to the CIT(A), who dismissed the appeal on the basis that the assessee did not file Form No. 67 by the due date along with the return of income for the relevant assessment year.
Form No. 67 is a document prescribed under Rule 128 of the Income-tax Rules, 1962, which is required to be filed by a taxpayer to claim the FTC under Section 90 or 91 of the Act. The form provides details of taxes paid in foreign countries and is necessary for the taxpayer to avail of the credit for foreign taxes paid against their Indian tax liability.
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The form must be filed by the due date for filing the income tax return for the relevant assessment year. Failure to file the form within the prescribed time can result in the disallowance of the FTC, even if taxes have been paid abroad.
Dissatisfied by the order of the Commissioner of Income Tax (Appeals) [CIT(A)] the assessee appealed before the tribunal.
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The two member bench comprising Dr. BRR Kumar (Vice President) and Suchitra Kamble (Judicial Member) noted that the assessee had paid taxes in both India and abroad, and the foreign taxes were eligible for credit. Since this was not disputed, the delay in filing could not affect the assessee’s right to claim FTC. The bench directed the Revenue to allow the FTC and make the necessary corrections.
In short,the appeal filed by the assessee was allowed.
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