M/S. SIXTH FORCE SOLUTIONS P. LTD.,CHENNAI vs. ITO, CORP. WARD-6(3), CHENNAI

आदेश / O R D E R PER ABY T. VARKEY, JM: These appeals have been preferred by the assessee against the separate orders of the Ld. CIT(A), ADDL/JCIT (A)-1, Pune, both dated 20.03.2026, for the Assessment Years 2020–21 and 2021–22. In both the appeals, the only grievance of the assessee is against the action of the Ld. CIT(A) denying the Foreign Tax Credit (hereinafter referred to as "FTC") as claimed by the assessee.

No.2642/Chny/2026 (AY 2020-21) & ITA No.2643/Chny/2026 (AY 2021-22 M/s. Sixth Force Solution Pvt. Ltd. :: 2 :: 2. The brief facts are that the assessee is a company carrying on the business of Software Development and Export of Software. For the assessment year 2020-21, it filed the return of income on 29.12.2020 admitting an income of ₹32,88,850. In the return of income filed, the appellant had claimed Foreign Tax Credit of ₹5,22,658 on the foreign royalty income offered to tax in India, which was subjected to tax deducted at source (TDS) in the foreign country as provided under Section 90 of the Income-tax Act, 1961 (hereinafter referred to as "the Act"). The return was processed by Centralized Processing Centre, Bengaluru (hereinafter referred to as "CPC") on 28.12.2021, wherein the CPC did not allow the FTC claimed by the appellant and raised the demand for the reason that the appellant did not file Form No. 67 (hereinafter referred to as "Form 67") within the time allowed under Section 139(1) of the Act. On learning about the disallowance of the FTC, the assessee immediately filed Form 67 on 13.01.2023 and sought rectification of the intimation of the CPC before the Jurisdictional Assessing Officer (hereinafter referred to as "JAO"), who, by order dated 12.08.2025, rejected the rectification application and held that the relief cannot be granted under Section 90 as Form 67 was not filed within the time allowed under Section 139(1) as provided under Rule 128 of the

No.2642/Chny/2026 (AY 2020-21) & ITA No.2643/Chny/2026 (AY 2021-22 M/s. Sixth Force Solution Pvt. Ltd. :: 3 :: Income-tax Rules, 1962 (hereinafter referred to as "the Rules"), and denied credit for the foreign tax paid by the appellant company.

Aggrieved by the aforesaid actions, the assessee preferred appeals before the Ld. CIT(A), who confirmed the actions of the JAO/CPC. Hence, the assessee has preferred these appeals before this Tribunal.

No.2642/Chny/2026 (AY 2020-21) & ITA No.2643/Chny/2026 (AY 2021-22 M/s. Sixth Force Solution Pvt. Ltd. :: 4 :: 4. Having heard both the parties and after perusal of the records, we note that the aforesaid facts stated for the respective AYs 2020-21 and 2021-22 are not in dispute. The only issue is against the action of the Ld. CIT(A) denying the FTC claimed by the assessee to the tune of ₹5,22,658 for AY 2020-21 and ₹4,19,563 for AY 2021-22. The CPC, while processing the return of income of the assessee, denied the claim of FTC, [the tax withheld as TDS in the foreign country] for the reason that Form 67, as required under Rule 128(9) of the Rules, was not filed on or before the due date for filing the return of income under Section 139(1) of the Act. However, it is not disputed that the assessee had belatedly filed Form 67 on 13.01.2023 for both the assessment years, which was prior to the rejection order passed by the AO under Section 154 of the Act (against the CPC order denying the FTC claim). The JAO is noted to have again reiterated the reasons given by the CPC for denying the claim of FTC to the assessee, which action has been confirmed by the Ld. CIT(A). We don’t countenance this action of the Ld. CIT(A)/AO. We find that this issue is no longer res-integra. It is settled position that the condition prescribed for filing Form 67 along with RoI u/s.139(1) is directory in nature, and since, the assessee has filed the same before the AO albeit while filing the application under Section 154 of the Act against the action of CPC rejecting the claim of FTC, the claim of FTC ought not to have been

No.2642/Chny/2026 (AY 2020-21) & ITA No.2643/Chny/2026 (AY 2021-22 M/s. Sixth Force Solution Pvt. Ltd. :: 5 :: disallowed as held by the Hon’ble Madras High Court in the case of Duraiswamy Kumaraswamy (WP No.5834 of 2022 & ors. order dated 06.10.2023), wherein it was held by their Lordship that filing of Form 67 in terms of Rule 128 was directory in nature. And further observed that the Rule is only for the implementation of the provisions of the Act and it would always be directory in nature. Respectfully following the same, we direct JAO to grant impugned Foreign Tax Credit to the assessee after verifying Form No.67, if he did not verify the same while passing the order in the rectification application filed by the assessee under Section 154 of the Act.

Order pronounced on the 20th day of August, 2026, in Chennai. Sd/- Sd/- (एस. आर. रघुनाथा) (एबी टी. वक�) (S.R.RAGHUNATHA) (ABY T. VARKEY) लेखा सद�/ACCOUNTANT MEMBER �या�यक सद�य/JUDICIAL MEMBER चे�नई/Chennai, �दनांक/Dated: August, 2026. MM आदेश क� ��त�ल�प अ�े�षत/Copy to: 1. अपीलाथ�/Appellant 2. ��थ�/Respondent 3. आयकरआयु�/CIT, Chennai / Madurai / Salem / Coimbatore. 4. िवभागीय�ितिनिध/DR 5. गाड�फाईल/GF YASHV Digitally signed by YASHVIR IR SINGH Date: SINGH 2026.09.03 14:57:07 -07'00'