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Facts
The assessee filed his return of income claiming Foreign Tax Credit (FTC) of Rs. 21,58,266/-. The return was processed, and the FTC was denied because Form No. 67 was not filed before the due date of filing the return of income. A subsequent petition under Section 154 for rectification was also rejected on the same grounds.
Held
The Tribunal held that the filing of Form No. 67 is a directory requirement and not mandatory. Relying on various judicial precedents, it was held that FTC cannot be denied solely due to the delay in filing Form No. 67, as DTAA provisions override the Act and Rules. The Assessing Officer was directed to allow the FTC.
Key Issues
Whether denial of Foreign Tax Credit is justified solely on the ground of delayed filing of Form No. 67, when DTAA provisions override the Act and Rules?
Sections Cited
143(1), 139(1), 154, 91, 90, 295(1), 128(9)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, Hyderabad ‘ A ‘ Bench, Hyderabad
करदाता का प्रतततितित्व/ : Ms. Sai Keerthana, C.A. Assessee Represented by राजस्व का प्रतततितित्व/ : Shri TV Vamshidhar, Sr.A.R. Department Represented by सुिवाई समाप्त होिे की ततति/ : 25.09.2025 Date of Conclusion of Hearing घोर्णध की तधरीख/ : 10.10.2025 Date of Pronouncement O R D E R PER MANJUNATHA G., A.M :
This appeal filed by the assessee is directed against the order of the Addl/Joint Commissioner of Income Tax (Appeals)-1, 2 Shahid Jamal Ansari Pune, dated 07.07.2025 of the and pertains to the assessment year 2023-24.
The brief facts of the case are that the assessee is an individual and has filed his return of income for A.Y. 2023-24 on 28-07-2023, declaring total income of Rs. 1,85,38,265/- and claimed Foreign Tax Credit (for short “FTC”) of Rs. 21,58,266/- in respect of taxes paid in the USA and France. The return of income filed by the assessee was processed and intimation under Section 143(1) of the Income Tax Act, 1961 was issued on 04-03- 2024, denying credit for FTC on the ground that relevant Form No. 67 as required under Rule 128(9) of the Income Tax Rules, 1962 was not filed on or before the due date of filing return of income under Section 139(1) of the Income Tax Act, 1961. The assessee has filed a petition under Section 154 of the Income Tax Act, 1961 along with relevant Form No. 67 filed on 21-05-2024, and the A.O. passed the order under Section 154 of the Act, on 10-01-2025 and denied FTC on the ground of delayed filing of Form No. 67 in terms of Rule 128(9) of the Income Tax Rules, 1962. 3 Shahid Jamal Ansari
On appeal, the Ld. CIT(A) upheld the order passed by the A.O. under Section 154 of the Act, denying credit for FTC for not filing Form No. 67 on or before the due date.
Aggrieved by the order of the Ld. CIT(A), the assessee is now in appeal before us.
The Learned counsel for the assessee Ms. Sai Keerthana, C.A. submitted that this issue is squarely covered in favour of the assessee by the decision of ITAT Hyderabad Benches in the case of Suresh Kumar Vobbilisetty Vs. ITO in dated 07.03.2025, where an identical issue of denial of FTC for non-filing of Form No. 67 on or before the due date of filing the return of income under Section 139(1) of the Act, has been considered and held that filing of Form No. 67 is directory in nature and if such form is filed before the A.O., then the A.O. ought to have considered the relevant Form No. 67 and allow the credit for FTC as per law. Therefore, she submitted that the A.O. may be directed to allow credit for foreign tax credit on the basis of Form No. 67 filed by the assessee.
4 Shahid Jamal Ansari
The Learned Senior A.R. for the Revenue Shri TV Vamshidhar, on the other hand, supporting the order of the Ld. CIT(A), submitted that, as per Rule 128(9) of the Income Tax Rules, 1962, the assessee should file Form No. 67 on or before the due date for furnishing the return of income or before the end of the assessment year in which the return for such assessment has been furnished. In the present case, the assessee has furnished Form No. 67 on 21.05.2024, which is beyond the due date specified under Rule 128(9) of the Income Tax Rules, 1962, and thus, the Ld. CIT(A) has rightly upheld the order passed by the A.O. denying credit for FTC, and thus, the order of the Ld. CIT(A) should be upheld.
We have heard both parties, perused the material on record, and had gone through the orders of the authorities below. There is no dispute with regard to the fact that the assessee had filed a return of income for the assessment year under consideration on 27-08-2023, which is on or before the due date for filing the return of income under Section 139(1) of the Income Tax Act, 1961. No doubt that the assessee has not filed the relevant Form 5 Shahid Jamal Ansari No. 67 along with the return of income filed for the year under consideration. However, the assessee has filed Form No. 67 belatedly on 21-05-2024 and also filed an application under Section 154 of the Act for rectification of the order passed by the A.O. The A.O. denied credit for FTC only on the ground that there is a delay in filing Form No. 67. Otherwise, the A.O. did not dispute the fact that the assessee has paid taxes on income earned outside India i.e., the USA and France on which, the assessee is eligible to claim credit for taxes paid outside India. Since the assessee has filed the relevant Form No. 67 and also filed an application under Section 154 of the Act for rectification of the order passed by the A.O., u/s 143(1) of the Act, in our considered view, the A.O. ought to have considered the relevant Form No. 67 filed by the assessee and allow credit for FTC.
Further, this issue is squarely covered in favour of the assessee by the decision of ITAT Hyderabad Benches in the case of Suresh Kumar Vobbilisetty Vs. ITO (supra), where the Tribunal, by following various judicial precedents on this issue, has held that foreign tax credit cannot be denied merely because there is delay 6 Shahid Jamal Ansari in filing Form No. 67. The relevant findings of the Tribunal are as under :
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In this view of the matter, and considering the facts and circumstances of the case, and also by following the decision of ITAT Hyderabad Benches in the case of Suresh Kumar Vobbilisetty Vs. ITO (supra), we direct the A.O. to allow credit for FTC on the basis of Form No. 67 filed by the assessee.
In the result, the appeal filed by the assessee is allowed.
Order pronounced in the Open Court on 10th October, 2025. श्री विजय पाल राि (मंजूिधथ जी) (VIJAY PAL RAO) (MANJUNATHA G.) उपाध्यक्ष /VICE PRESIDENT लेखा सदस्य/ACCOUNTANT MEMBER Hyderabad, dated 10.10.2025. TYNM/sps