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Facts
The assessee claimed foreign tax credit of ₹8,38,602/-. The CPC denied this credit as Form 67 was filed belatedly. The CIT(A) acknowledged the entitlement but set aside the issue to the AO to consider the pending condonation application for delay in filing Form 67.
Held
The Tribunal held that the filing of Form 67 within the due date is not mandatory and the assessee should not be deprived of foreign tax credit if Form 67 is submitted during assessment or appellate proceedings. The AO was directed to adjudicate the issue afresh considering judicial pronouncements.
Key Issues
Whether the benefit of foreign tax credit can be denied solely on the ground of belated filing of Form 67 when the assessee is otherwise entitled to the credit.
Sections Cited
90, 91, 139
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Income Tax Appellate Tribunal, ‘B’ BENCH, BANGALORE
Before: SHRI WASEEM AHMED & SHRI SOUNDARARAJAN K
PER WASEEM AHMED, ACCOUNTANT MEMBER:
These are the appeals filed by the assessee against the order passed by the Addl/JCIT(A)-5, Delhi dated 31/07/2024 & 09/08/2024 in DIN/order Nos. ITBA/APL/S/250/2024-25/1067168010(1) and ITBA/APL/S/250/2024-25/1067496909(1) for the assessment years 2018-19 and 2019-20 respectively.
The sole issue raised by the assessee pertains to the learned CIT(A)’s decision for not granting the benefit of foreign tax credit amounting to ₹ 8,38,602/- despite acknowledging that the assessee is entitled to such credit.
The Centralized Processing Center (CPC) denied the foreign tax credit claimed by the assessee for ₹8,38,602/- through an intimation dated June 08, 2020, on the grounds that Form 67, required for claiming the credit, was filed belatedly—beyond the due date for filing the income tax return.
On appeal, the learned CIT(A) acknowledged that the benefit of foreign tax credit could not be denied merely because Form 67 was filed belatedly. In support of this, the ld. CIT(A) referred to a series of decisions of income tax Appellate Tribunal of different benches. However, the ld. CIT(A) also noted that the assessee had already submitted an application for condonation of delay in filing Form 67 before the ld. Principal Commissioner of Income Tax (PCIT) on November 15, 2021, which was still pending at that time. Consequently, the ld. CIT(A) set aside the issue and referred it to the AO for fresh adjudication, directing the AO to consider the outcome of the pending petition before the ld. PCIT being higher in ranking.
Being aggrieved by the order of the ld. CIT(A), the assessee has filed the present appeal before us.
Before us, the learned AR submitted that the assessee cannot be denied the benefit of foreign tax credit merely due to a delay in filing .
Form 67, which is required to claim the benefit under section 90/91 of the Act. Accordingly, the learned AR requested that the issue be remanded to the AO with instructions to allow the foreign tax credit after necessary verification as per the provisions of law.
On the other hand, the learned DR did not raise any objections if the issue is referred back to the AO for necessary adjudication as per the provisions of law.
We have considered the rival contentions and reviewed the materials available on record. To claim the benefit of foreign tax credit, the assessee is required to file Form 67 along with the return of income within the due date specified under section 139 of the Act. However, it has been consistently held that the filing of Form 67 within the due date is not mandatory. Furthermore, in various cases, the courts have held that once Form 67 is submitted during the assessment or appellate proceedings, the assessee should not be deprived of foreign tax credit under section 90/91 of the Act.
8.1 In the present case, the CIT(A) has acknowledged that the assessee is entitled to foreign tax credit under section 90/91 of the Act. However, the ld. CIT-A denied the benefit on the reasoning that the condonation application for the delay in filing Form 67 is pending before the ld. PCIT for adjudication who is higher in ranking. Thus, the ld. CIT(A) set aside the issue to the AO for fresh adjudication after considering the outcome of the condonation petition pending before the ld. PCIT.
8.2 Since, the Department has already admitted the possibility of granting foreign tax credit subject to verification, and since the learned DR has not opposed the remanding of the matter, we find it appropriate to direct the AO to reconsider the assessee’s claim in the light of judicial pronouncement referred by the ld. CIT-A in his order and without waiting for the outcome of the condonation application pending before the ld. PCIT. In view of the above, we direct the AO to adjudicate the issue afresh as per law. Hence, the ground of appeal of the assessee is allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for statistical purposes. for the asst. year 2018-19
The facts of the case on hand are identical to the facts of the case discussed above, therefore, respectfully following the same, we direct the AO to adjudicate the issue afresh as per law. Hence, the ground of appeal of the assessee is allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for statistical purposes.
In the combined result, both the appeals of the assessee are allowed for statistical purposes.
Order pronounced in court on 7th day of April, 2025