MANAV MANCHANDA,GHAZIABAD vs. ITO, WARD 2(1)(3) GHAZIABAD, GHAZIABAD

The assessee has raised the following grounds of appeal:- “1. That the Appellant-Assessee denies its assessed tax liability of Rs. 20,86,397/- against the returned tax liability of Rs.4,63,052/- and thus denies its liability to pay tax, interest and penalty thereon.

That in the facts and circumstances of the case, the Ld. CPC erred in assuming juri iction to disallow the claim of Foreign 2 Tax Credit (FTC) while exercising juri iction u/s 143(1) of the Act. More so when the debatable issue of Foreign Tax Claim (FTC) could not be made a part while making adjustment.

That in the facts and circumstances of the case, the Ld. CPC erred in disallowing the claim of Foreign Tax Credit (FTC) 3 solely on account of delay in filing Form 67, which cannot be a ground to deny the claim of foreign tax duly paid by the Appellant-Assessee.

That in the facts and circumstances of the case, the Ld. CPC erred in not granting the claim of Foreign Tax Credit (FTC) which was allowable under the provisions under DTAA as well as u/s 90/91 of the Income Tax Act,1. 5. The appellant-assessee reserves its rights to add, amend. 5 modify, substitute any ground during the course of the arguments/appeal.

The appellant assessee denies the levy of interest u/s 234A/B/C of the Income Tax Act, 1961.”

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 20.08.219 declaring total income at Rs.55,68,330/-. The assessee claimed Foreign Tax Credit (FTC) of Rs.122,95,750/- u/s 90/90A of the Act of the amount paid on the salary from HCL America Inc. The claim of the assessee was rejected as Form No.67 was filed after due date of filing of return. Assessee moved an application u/s 154 for rectification which was also rejected. Thus, the assessee filed an appeal before Ld. CIT(A) who vide impugned order dismissed the Manav Manchanda vs. ITO appeal by observing that assessee has filed Form 67 belatedly and since delay is not condoned, assessee is not entitled to such FTC.

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 fact remained that it was filed. The filing of Form 67 is directory in nature and not mandatory, therefore, there is sufficient compliance by the assessee to make such claim. This view is supported by the order of Co-ordinate Bench of Hyderabad & 118/Hyd/2022 dated 22.07.2022. 6. In view of these facts, in our considered view merely filing Form 67 belatedly, does not debar the assessee for making claim of tax credit allowable u/s 90/90A of the Act. Accordingly, we allow the claim of the assessee as made in Form 67, however, the issue is sent back to the file of the AO for making necessary verification of the claim as per the Form 67 and other relevant certificates/statements and allow the credit to the assessee in accordance with law. With these directions, the appeal of the assessee is partly allowed for statistical purposes. Dated:16.05.2025