Delay in Filing Form 67 Not a Ground to Deny FTC Claim if Submitted Before Assessment Completion: ITAT Allows Foreign Tax Credit [Read Order]
ITAT grants relief to salaried assessee, holding procedural delay in Form 67 filing cannot defeat substantive FTC claim.
![Delay in Filing Form 67 Not a Ground to Deny FTC Claim if Submitted Before Assessment Completion: ITAT Allows Foreign Tax Credit [Read Order]](https://images.taxscan.in/h-upload/2026/04/21/2133973-delay-in-filing-forms-67-.webp "Delay in Filing Form 67 Not a Ground to Deny FTC Claim if Submitted Before Assessment Completion: ITAT Allows Foreign Tax Credit [Read Order]")
The Income Tax Appellate Tribunal (ITAT) Chennai Bench has ruled that a delay in submitting Form 67 cannot be considered a reason for denying Foreign Tax Credit (FTC) when it has been submitted before the completion of the assessment process. The ITAT ordered the assessing officer to provide the entire FTC of ₹3.20 lakh to the assessee.The assessee being a salaried person who was sent on...
The Income Tax Appellate Tribunal (ITAT) Chennai Bench has ruled that a delay in submitting Form 67 cannot be considered a reason for denying Foreign Tax Credit (FTC) when it has been submitted before the completion of the assessment process. The ITAT ordered the assessing officer to provide the entire FTC of ₹3.20 lakh to the assessee.
The assessee being a salaried person who was sent on his first international assignment, the assessee filed his return in the year AY 2016-17 declaring Indian income only based on Form 16. However, he was unaware about the inclusion of foreign income which he had earned in Sweden and Australia.
Upon receiving notice under Section 148, the assessee submitted his foreign income details and documents pertaining thereto even making revised calculations and FTCs.However, the AO allowed revised total income but reduced the FTC limit to ₹1.03 lakh based on the original return only. The CIT(A) also allowed the reduction in FTCs due to non-filing of Form 67.
The assessee contended that Form 67 was filed before completion of assessment and that procedural delay should not defeat a legitimate claim. The Revenue argued that filing Form 67 along with the return is mandatory for claiming FTC under Rule 128.
The Bench comprising Shri Inturi Rama Rao (Accountant Member) and Shri Manu Kumar Giri (Judicial Member) ruled in favour of the assessee, setting aside the order of the Commissioner of Income Tax (Appeals) [CIT(A)] and directing the AO to grant the full FTC claim.
The Tribunal held that filing of Form 67 is directory in nature. It observed that since the assessee had furnished Form 67 and supporting documents before completion of assessment, the claim could not be denied on technical grounds.
The Tribunal also deleted the penalty under Section 271(1)(c) holding that the omission to disclose foreign income was bona fide and subsequently rectified voluntarily, and therefore did not amount to concealment.
Thus, the Bench directed the AO to allow the full FTC claim.
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