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Facts
The assessee, a tax resident in India, received salary income from a Singapore-based employer and offered it to tax in India. The assessee claimed foreign tax credit by filing Form 67. However, the claim was dismissed by CPC and confirmed by CIT(A) because Form 67 was filed after the due date for filing the return of income.
Held
The Tribunal held that the filing of Form 67 is directory and not mandatory, and that filing it before the processing of the return of income constitutes sufficient compliance. The delay in filing Form 67 was condoned.
Key Issues
Whether the assessee can be denied foreign tax credit for delay in filing Form 67, when Form 67 is considered a directory requirement and filed before the processing of the return.
Sections Cited
250, 128, 90, 91, 143(1), 139(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘C’: NEW DELHI
O R D E R
PER MANISH AGARWAL, AM:
This is an appeal filed by the assessee against the order of the Addl./ Jt. Commissioner of Income Tax (Appeals), Udaipur, [CIT(A) in short], in Appeal No. NFAC/2018-19/ 10019886 dated 06.012.2024 passed u/s 250 of the Income Tax Act, 1961 for Assessment Year 2019-20.
Vivek Kaul vs. CIT(A) 2. The assessee has raised the following grounds of appeal:-
1. That the order passed by the Learned Commissioner of Income-tax (Appeal), Udaipur ['Ld. CIT(A)] under sec. 250 of the Income-tax Act, 1961 ('the Act') is bad in law as the Ld. CIT(A) failed to appreciate the provisions of Rule 128 of the Income-tax Rules, 1962 ('the Rules').
2. That the Ld. CIT(A) has erred in law by passing an order which is bad in jurisdiction and therefore, bad in law.
3. That the Ld. CIT(A) has grossly erred in law, in entirely overlooking the request made by the Appellant for a personal hearing through video conferencing, and passing the impugned order without granting any such opportunity of being heard to the Appellant.
4. Without prejudice to the above, the Ld. CIT(A) has erred in law by overlooking several judicial precedents, including the Hon'ble Apex Court decisions, wherein it has been held that mere procedural delay cannot be the reason for rejecting the genuine claim of the taxpayer.
5. That the Ld. CIT(A) has erred in law by overlooking several judicial precedents wherein it has been held that filing of Form 67 is not a mandatory but a directory/procedural requirement, and therefore, credit of taxes paid outside India should not be denied merely on the ground of delay in filing of Form 67 in accordance with the timelines prescribed under Rule 128 of the Rules.
6. That the Le CIT(A), the Learned Assistant Director of Income-tax ('Ld. ADIT') and Centralized Processing Centre ('CPC') erred in law and on facts, by overlooking the documents submitted alongwith Form 67 as a proof of payment of tax outside India and thereby, not appreciating the provisions of sec. 90 and sec. 91 of the Act read with India-Singapore Double Taxation Avoidance Agreement.
7. That the Ld. CIT(A) has erred in law, by disregarding the circulars issued by the Central Board of Direct Taxes ('Board'), particularly when it is a settled position that circulars issued by the Board are binding on the tax authorities;
8. That the Ld. CIT(A), the Ld. ADIT and CPC has erred in law and on facts, by failing to appreciate that the Appellant's claim for credit of Singapore income tax paid, against his Indian income-tax liability, does not qualify as an item fit for adjustments under any of the clauses under sec. 143(1)(a) in general, or as "an incorrect claim apparent from any information in the return" in particular, being sub-clause (ii) thereof
9. That the Ld. CIT(A) erred in law by passing a non-speaking order in respect of the grounds raised regarding the adjustment made by the Ld. ADIT in the Intimation issued under sec. 143(1) of the Act by entirely overlooking the provision of sec. 143(1) of the Act.
10. That the Ld. CIT(A) erred in law by failing to appreciate a settled position that where in any assessment there are two possible views then the same cannot be the subject matter of adjustment made by virtue of section 143(1) of the Act. In light of the aforesaid grounds, Appellant prays before the Hon'ble Income- Tax Appellate Tribunal to appropriately direct the Ld. CIT(A) to grant the credit of Foreign Tax Credit as sought by the Appellant, The aforesaid grounds of appeal are mutually exclusive and without prejudice to each other. The Appellant craves to add, alter, amend and/or modify any of the grounds at or before the bearing of the Appeal.”
3. The brief facts of the case are that the assessee is an individual and is tax resident in India and had filed his return of income on 29.09.2020 declaring total income at Rs.1,76,08,814/-. The assessee has received salary of Rs.1,38,20,515/- from Singapore based employer which was offered to tax in India u/s 90(1) of the Act. The assessee claimed tax credit of the amount paid on the salary from Singapore based company and filed Form 67 for making such claim. The claim of the assessee was dismissed by CPC by holding that the due date of filing of return on 31.08.2019 and the assessee has filed the return of income on 29.09.2020 and also Form 67 claiming foreign tax credit was filed belatedly as the due date for filing of return u/s 139(1) of the act was 31.08.2019, therefore, the tax credit was not allowed to the assessee by the CPC. In first appeal, Ld. Addl. JCIT, Udaipur has confirmed the order of CPC, therefore, the assessee is in appeal before us.
During the course of hearing, the Ld. Sr. DR supported the orders of lower authorities and submit that when Form 67 was not filed within the stipulated time period, no tax credit be allowed to the assessee.
After considering the facts of the case and arguments of the Ld. Sr. DR, it is seen that though the Form 67 was filed late by the assessee, however, the same was duly filed under Rule 128 of the Income Tax Rules, 1962 for claiming foreign tax credit benefit, though the same was not uploaded within the time prescribed for filing of return u/s 139(1), however, it is a fact on record that the same was filed before processing of the return of income. The filing of Form 67 is directory in nature and not mandatory and the form was filed well before the processing of the return, therefore, there is sufficient compliance by the assessee to allow such claim. This view is supported by the order of Co-ordinate Bench of Tribunal in the case of Baburao Atluri Door vs. DCIT in & 118/Hyd/2022 dated 22.07.2022.
In view of the facts, in our considered view merely filing Form 67 late does not debar the assessee for making claim of genuine tax credit. Accordingly, we condone the delay in filing Form 67 and direct the AO to allow the claim of the assessee as made in Form 67. However, for the purpose of verification of the claim as per the Form 67, we sent back the matter to the file of AO and direct him to allow the credit to the assessee in accordance with law after making
In the result, appeal of the assessee stands allowed for statistical purposes. Order pronounced in the open court on 13.05.2025.