Loading judgment…
Facts
The assessee filed its original return for AY 2019-20 without Form 67 for Foreign Tax Credit (FTC) on income from U.K. & Thailand. A revised return was later filed along with Form 67, but the CPC and ld. CIT(A) denied the FTC, citing non-compliance with Rule 128(9) and the non-filing of Form 67 with the original return.
Held
The Tribunal held that FTC is a vested right under Section 90 of the Income Tax Act and DTAA, which cannot be denied merely due to procedural non-compliance when Form 67 is filed with a revised return. The AO was directed to verify Form 67 and allow the FTC.
Key Issues
Whether Foreign Tax Credit can be denied solely due to non-filing of Form 67 with the original return of income, when it is subsequently filed with a revised return, despite the credit being a vested right under the Income Tax Act.
Sections Cited
90, 139(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “E” BENCH, MUMBAI
Before: SHRI SAKTIJIT DEY, HON’BLE & SHRI NARENDRA KUMAR BILLAIYA, HON’BLE
O R D E R
PER NARENDRA KUMAR BILLAIYA, AM:
This appeal by the assessee is preferred against the order of the ld. CIT (A)/Addl./JCIT(A), Faridabad [hereinafter “the ld. CIT(A)”], dated 21/12/2024, pertaining to AY 2019-20.
The sum and substance of the grievance of the assessee is that the ld. CIT(A) erred in confirming the denial of foreign tax credit (FTC) of Rs. 47,36,704/- on the ground that Form No. 67 was not filed along with return of income. As per Rule 128(9) of the Income Tax Rules, 1962 (hereinafter “the Rules”). 3. Briefly stated the facts of the case are that the assessee filed its original return of income on 13/09/2019, however, the assessee did not file Form 67 for claim of FTC on income received from U.K. & Thailand which was offered for tax in India. Subsequently, the assessee filed a revised return of income along with Form 67 in support of this claim of Tips Music Ltd. 2 FTC. The credit for FTC was denied while processing the return by the CPC. The assessee preferred appeal before the ld. CIT(A) but without any success. The only reason given by the ld. CIT(A) is that the assessee is not entitled for credit of FTC u/s 90 of the Act as Form 67 was not furnished by the assessee while filing the ITR u/s 139(1) of the Act. 4. We have carefully considered the orders of the authorities below. We are of the considered view that neither Section 90 of the Act nor the DTAA provides that FTC shall be disallowed for non-compliance with any procedural requirements. We are of the considered view that FTC is assessee’s vested right as per articles 24(1)(a) and 23 of the DTAA r.w.s. 90 of the Act. The same cannot be disallowed for non-compliance with the rules procedural requirements. 4.1. In fact the assessee has subsequently filed Form 67 with the revised return of income which cannot be rubbished. Therefore, in the interest of justice and fairplay, we direct the AO to verify Form 67 and allow the FTC to the assessee. 5. In the result, appeal of the assessee is allowed as per above directions. Order pronounced in the Court on 4th June, 2025 at Mumbai. (SAKTIJIT DEY) ACCOUNTANT MEMBER