CLOUDSPACE TECHNOLOGIES PRIVATE LIMITED,NEW DELHI vs. DCIT, CIRCLE - 4(2), DELHI, DELHI

ITA 8623/DEL/2025Status: DisposedITAT Delhi06 August 2026AY 2020-214 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the delay in filing Form 67 is a procedural lapse and should not deny the substantive right to claim FTC. Following the Delhi High Court's decision, the AO was directed to consider the FTC claim after verification.

What were the facts?

The assessee claimed Foreign Tax Credit (FTC) for taxes paid in the USA but failed to file Form 67 along with its return of income. The claim was disallowed by the CPC due to the missing form, and the assessee filed Form 67 belatedly.

What were the issues?

Whether the delay in filing Form 67 for claiming Foreign Tax Credit warrants denial of the credit, and if procedural non-compliance can override substantive rights.

Which sections of the Income-tax Act were involved?

Section 143(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI

Before: SHRI VIKAS AWASTHY & SMT. RENU JAUHRI

PER VIKAS AWASTHY, JUDICIAL MEMBER: This appeal by the assessee is directed against the order of Additional/Joint Commissioner of Income Tax (Appeals), Aurangabad [in short ‘the CIT(A)’] dated 06.10.2025, for Assessment Year 2020-21.

The solitary issue raise by assessee in appeal is against denial of Foreign Tax Credit (FTC) to the assessee by the Assessing Officer (AO), for delay in filing of Form 67.

Dr. Manas Shankar Ray, appearing on behalf of the assessee submits that the assessee is a technology start-up company. The assessee filed its return of income for AY 2020-21 declaring total income of Rs.65,01,770/- including income from dividends amounting to

ITA 8623/DEL/2025 CLOUDSPACE TECHNOLOGIES PRIVATE LIMITED Rs.63,56,282/- received from United States of America (USA), on which withholding tax of Rs.9,53,442/- was paid in the USA. The assessee in its return of income claimed FTC to the extent of withholding tax paid in USA. However, the assessee inadvertently failed to file Form No. 67 to claim FTC. The assessee came to know about non filing of Form No. 67 only after the return of income of the assessee was processed u/s.143(1) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) by Centralized Processing Centre (CPC) vide order dated 28.12.2021. The CPC, in absence of Form No.67 disallowed assessee’s claim of FTS Rs.9,53,442/- for the relevant assessment year. The assessee filed Form No.67 for the relevant assessment year on 05.05.2025. The delay in filing of Form No.67 was for the reason that the assessee company was undergoing the process of winding up and majority of its employees had already left the company. The assessee had filed an application for striking off its name from the Register of Companies. Further, during this period the Directors of the company were also facing serious personal hardship on account of medical exigencies in the family. The ld. Counsel prays for directions to the AO for allowing benefit of FTC. The ld. Counsel submits that the issue and facts in case of the assessee are squarely covered by decision of Hon’ble Delhi High Court in the case of M/s. Real Time Data Services P. Ltd. vs. PCIT in WP(C) 959/2024 decided on 13.02.2026. He contended that the Hon’ble High Court has held that if the benefit of FTC is not allowed to the assessee it would result in unjust enrichment to the Revenue. He further placed reliance on the decision of Tribunal in the case of Suchi Agarwal vs. ITO in ITA No.601/Del/2024 for AY 2020-21 decided on 31.05.2024 to contend that filing of Form No.67 is directory and not mandatory. Violation of procedural norm does not adversely affect substantive rights or claims.

Per contra, Shri Vikram Singh Sharma, representing the department vehemently defended the impugned order and prayed for dismissing appeal of the assessee. The ld. DR submits that the mandatory condition for claiming FTC is that the assessee is required to file Form No.67 along with return of income, which the assessee has failed to comply. In absence of Form No.67, benefit of FTC cannot be examined by the AO.

Both sides heard, orders of the lower authorities examined. The short issue for consideration before us is denial of FTC to the assessee in absence of Form No. 67. It is an undisputed fact that the assessee in the return of income has claimed FTC to the tune of Rs.9,53,442/- but necessary Form No.67 for claiming of FTC was not filed by the assessee along with return of income. The assessee came to know about non filing of Form No.67 only after assessee’s claim of FTC was rejected by CPC vide intimation u/s.143(1) of the Act dated 2

ITA 8623/DEL/2025 CLOUDSPACE TECHNOLOGIES PRIVATE LIMITED 28.12.2021. The assessee has purportedly filed Form No.67 relevant to the impugned assessment year on 05.05.2025 i.e. before filing appeal before the CIT(A). The CIT(A) dismissed assessee’s claim for the reason that Form No.67 was filed by the assessee after due date. We find that the case of assessee is squarely covered by the decision of Hon’ble Delhi High Court in the case M/s. Real Time Data Services P. Ltd. vs. PCIT (supra). The Hon’ble High Court in a similar situation where the assessee had filed Form No.67 after the due date, directed the AO to consider assessee’s claim and allow the same after verifying the facts, in accordance with law. The relevant excerpts from the order of Hon’ble Delhi High Court are as under:-

“7. Admittedly, the petitioner has not furnished Form No. 67 up to the due date of filing return and it realised such fault only when its return was processed and when its Foreign Tax Credit of Rs.1,01,34,300/- being TDS on foreign receipts was not allowed by the AO. On inquiry, it found that the same had been rejected because Form No. 67 was not uploaded within the time prescribed. 8. We are of the view that may be the petitioner omitted or failed to upload Form No. 67 by the due date of return but simply because of this technical or venial breach, its substantial right of getting Foreign Tax Credit of Rs.1,01,34,300/-, deducted from its receipt cannot be denied. If that be so, it would amount to withholding of a substantial amount of an assessee without there being any authority of law which would amount to unjust enrichment in turn. xxx 10. Concededly, the petitioner has subsequently furnished Form No. 67 on 14.09.2022. While exercising writ jurisdiction, we hereby direct the AO that in case the same has been furnished, he shall allow Foreign Tax Credit after verifying the facts in accordance with law. However, in case the AO is of the view that the Foreign Tax Credit cannot be allowed to the petitioner, he shall pass a speaking order, against which the petitioner’s right to take remedies in accordance with law shall remain reserved. 11. The necessary exercise as directed above shall be done by the AO within a period of 2 (two) months from today.” In light of facts of the case and above order of the Hon’ble Delhi High Court, we direct the AO to consider assessee’s claim of FTC in similar terms and dispose of assessee’s claim within a period of two months from the date of receipt of this order.

In the result, impugned order is set aside and appeal of the assessee is allowed.

Order pronounced in the open court on Tuesday the 12th day of May, 2026.

Sd/- Sd/- RENU JAUHRI VIKAS AWASTHY ACCOUNTANT MEMBER JUDICIAL MEMBER Delhi Dated: 06-August-2026

ITA 8623/DEL/2025 CLOUDSPACE TECHNOLOGIES PRIVATE LIMITED NV/-

Copy to: CLOUDSPACE TECHNOLOGIES PRIVATE LIMITED, 1 FLAT NO. 3197, B-3, BOUGAINVILLA APPARTMENTS, VASANT KUNJ, NEW DELHI-110070 DCIT, CIRCLE - 4(2), DELHI, 2 C.R. BUILDING, ITO, DELHI-110002 3 THE PCIT / CIT, 4 THE D.R., ITAT, DELHI BENCH 5 GUARD FILE

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