ASHUTOSH CHANDRAKANT KARANDIKAR,PUNE vs. ITO, KALYAN

PER PAWAN SINGH, JUDICIAL MEMBER; 1. This appeal by assessee is directed against the order of ld. CIT(A) /ADDL/JCIT(A)-4, Chennai dated 23.12.2025 for Assessment Year (AY) 2023-24. The assessee has raised following grounds of appeal: “1. On the facts and circumstances of the case and in law, the Ld. ADL, JCIT Appeals has erred in confirming the action of the Ld. Assessing Officer, CPC Ld. AO of not allowing Foreign Tax Credit FTC of INR. 28,35,925 allowable as per Section 90 of the Income Tax Act, 1961 Act read with Article 24 of the India UK Double Taxation Avoidance Agreement DTAA read with CBDT circular 333 dated 02 April 1982, in the Intimation under Section 143 1 of the Act on the premise that Form 67 in support of FTC was filed beyond the due date as prescribed under Rule 128 9 of the Act. It is prayed that the Ld. Jurisdictional Assessing Officer JAO be directed to allow FTC of INR. 28,35,925 as the order of the Ld. ADDL JCIT A is contrary to the decision of the Hon’ble Madras High Court in the case of Duraiswamy Kumaraswamy Vs. The Principal Commissioner of Income Tax TS 681 HC 2023 MAD dated 6 10 2023 as well as several orders of the Hon. ITAT as mentioned. 2. On the facts and circumstances of the case and in law, the Ld. ADDL JCIT Appeals ought to have held that the non grant of Foreign Tax credit FTC of INR 28,35,925 is not a permissible adjustment under Section 143 (1) of the Act as no such adjustment relating to debatable issues can be made in the Intimation under Section 143 1 of the Act. It is therefore prayed that the learned Jurisdictional Assessing Officer Ld. JAO be directed to grant the Foreign Tax Credit FTC of INR 28,35,925. 3. On the facts and circumstances of the case and in law, the Ld. ADDL JCIT Appeals ought to have held the entire 143 (1) proceedings as invalid in law as the Ld. AO had not followed the 3 provisions to Section 143 (1) of the Act of giving opportunity to the Appellant to defend his case. It is therefore prayed that the learned Jurisdictional Assessing Officer Ld. JAO be directed to grant the Foreign Tax Credit FTC of INR 28,35,925. 4. Without prejudice to Ground No 2 and Ground No 3,On the facts and circumstances of the case and in law, the Ld. ADDL JCIT Appeals failed to direct Ld. AO CPC for rectification of mistake apparent on record about non consideration of Foreign Tax credit of INR 28,35,925 in its order intimation u s 154 dated 7 01 2025 while calculating Net Tax Liability Page No 15 of Order Intimation u s 154 dated 7 01 2025 in spite of the fact that 4 Annexure FSI As Computed Page No.24 to the Order Intimation us 154 itself confirms that Foreign Tax Credit of INR 28,35,925 has been granted to the Assessee. Further Annexure TR As computed Page No.25 to the Order Intimation u s 154 also confirms that Assessee is eligible for Foreign Tax credit of INR 28,35,925. It is therefore prayed that the learned Jurisdictional Assessing Officer Ld. JAO be directed to grant the Foreign Tax Credit FTC of INR 28,35,925. 5. The Appellant craves leave to add, amend, alter, vary, and OR withdraw any OR all of the above grounds of appeal.” 2. Rival submissions of both the parties have been heard and record perused. The learned Authorised Representative (ld. AR) of the assessee submits that assessee is individual and engaged in the business of providing consultancy services to foreign and domestic clients for the several years. The assessee while filing return of income declared income of Rs. 95,68,390/-. The income of assessee includes salary receipt outside India on which tax was deducted by foreign employer. The return was processed by CPC under section 143(1) on 30.05.2024 in accepting the return income. However, credit of foreign tax of Rs. 28,35,925/- was not allowed /provided to the assessee for the want of filing of Form 67. Form 67 is required to claim credit of foreign taxes paid. Due to non-furnishing such form a demand of Rs. 33,96,080/- was created. Though, return of income was filed in time but the Chartered Accountant of assessee failed to furnish / submit Form 67 due to professional oversight. However, on realising such omission, the assessee filed Form 67 on 26.07.2024. The assessee made application under section 154 on 07.12.2024. However, the credit of foreign tax was not allowed and application under section 154 was dismissed on 07.01.2025. The ld. CIT(A) confirmed the action of AO / CPC. The ld. AR of the assessee submits that there are series of decision of Tribunal as well as Madras High Court in Duraiswamy Kumaraswamy vs PCIT (TS-681-HC-2023 MAD dated 06.10.2023) wherein it was held that delay in filing Form 67 is merely a procedure lapse and credit should not be denied on such delay. 3. On the other hand, learned Senior Departmental Representative (ld. Sr. DR) for the Revenue supported the order of lower authorities. 4. We have considered the rival submissions of both the parties. We find that there is very limited dispute before us. Admittedly, the return of income was filed by assessee in time. The claim of credit of foreign tax paid by his employer against the salary was not allowed to the assessee. The CPC / AO denied such credit for the want of Form 67. We find that before filing application for rectification of order, the assessee already uploaded Form 67 on the prescribed manner. The ld. CIT(A) upheld the action of AO by taking view that filing of Form 67 before time limit under section 139(1) is mandatory. 5. We find that Hon’ble Delhi High Court in Realtime Data Services (P) Ltd. (2026) 183 taxmann.com 701 (Delhi) held that where the assessee claimed foreign tax credit but failed to furnish Form 67 by due date prescribed under Rule 128 such credit could not be denied merely on account of procedure lapses / delay, being technical / venial in nature. Similar view was taken by Madras High Court in Kuthoore Natarajan Venkatasubramanian vs PCIT (2024) 168 taxmann.com622 (Madras). Thus, considering the aforesaid legal view, we condone the delay in filing Form 67 and matter is restored back to the file of Jurisdictional Assessing Officer (JAO) to verify the fact about the foreign tax credit and allow relief to the assessee on foreign tax credit in accordance with law. 6. In the result, appeal filed by assessee is allowed. Order was pronounced in open court on 28/07/2026 Sd/- Sd/- GIRISH AGRAWAL PAWAN SINGH ACCOUNTANT MEMBER JUDICIAL MEMBER

MUMBAI, Dated:28/07/2026 Biswajit Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Mumbai; and (5) Guard file. By Order

Assistant Registrar ITAT, Mumbai