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Facts
The assessee, an Indian tax resident, claimed Foreign Tax Credit (FTC) u/s 90/90A for tax paid on salary from HCL America Inc. in his AY 2019-20 return. This claim was rejected by the CPC and subsequently dismissed by the CIT(A) because Form No. 67, which is essential for claiming FTC, was filed after the due date.
Held
The Tribunal held that the filing of Form 67 is directory, not mandatory, and belated filing alone cannot be a ground to deny FTC. It allowed the assessee's claim for FTC but remanded the issue back to the Assessing Officer (AO) for necessary verification of the claim based on Form 67 and other relevant documents, to grant the credit according to law.
Key Issues
Whether Foreign Tax Credit (FTC) can be disallowed solely due to the belated filing of Form 67, and if the requirement to file Form 67 is directory or mandatory in nature.
Sections Cited
250, 143(1), 90, 90A, 154, 234A, 234B, 234C
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘C’: NEW DELHI
(ASSESSMENT YEAR 2019-20) Income Tax Officer, Manav Manchanda, Ward-2(1)(3), D-304, Rajhans Premier Vs. Ghaziabad. Apartment, Ahinsa Khand-1, Indirapuram, Ghaziabad-201014, Uttar Pradesh. PAN-AGHPM5164G (Appellant) (Respondent) Assessee by None Department by Shri Om Prakash, Sr. DR Date of Hearing 13/05/2025 Date of Pronouncement 13/05/2025 O R D E R
PER MANISH AGARWAL, AM:
This is an appeal filed by the assessee against the order of the ld. Addl./ Joint Commissioner of Income Tax (Appeals), Gwalior [CIT(A) in short], in Appeal No. NFAC/2018-19/10098460 dated 09.12.2024 passed u/s 250 of the Income Tax Act, 1961 for Assessment Year 2019-20.
Manav Manchanda vs. ITO 2. 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.
2. That in the facts and circumstances of the case, the Ld. CPC erred in assuming jurisdiction to disallow the claim of Foreign 2 Tax Credit (FTC) while exercising jurisdiction 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.
3. 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.
4. 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.
6. The appellant assessee denies the levy of interest u/s 234A/B/C of the Income Tax Act, 1961.”
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 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
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 Tribunal in the case of Baburao Atluri Door vs. DCIT in & 118/Hyd/2022 dated 22.07.2022.
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.