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Facts
The assessee, a salaried employee in Netherlands, claimed Foreign Tax Credit (FTC) for taxes paid on foreign income in his Indian income tax return. The CPC disallowed the FTC because Form 67 was not filed within the prescribed time limit.
Held
The Tribunal held that furnishing Form 67 is directory and not mandatory. The delay in filing Form 67 was condoned, and the issue was restored to the Assessing Officer to examine the veracity of the FTC claim.
Key Issues
Whether the delay in filing Form 67 for claiming Foreign Tax Credit (FTC) can be a ground for disallowing the claim, especially considering its directory nature.
Sections Cited
250, 143(1), 90
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Income Tax Appellate Tribunal, PUNE “SMC” BENCH : PUNE
Before: SHRI MANISH BORAD & SHRI VINAY BHAMORE
I.T.A.No.2335/PUN/2025 (Assessment Year 2020-2021) Parag Kiran Gujrathi, DCIT, Circle-12, Pune D-103, Park Royale, Near Kokane Chowk Rahatani, Pune-411017 vs. PAN : AFSPG 4990 G (Appellant) (Respondent) For Assessee : Shri Suhas P. Bora, CA For Revenue : Shri Milind Debaje, JCIT-DR (through virtual) Date of Hearing : 18.11.2025 Date of Pronouncement : 20.11.2025 ORDER PER : MANISH BORAD, AM
This appeal at the instance of the assessee is directed against the order of ADDL/JCIT (Appeals), Jodhpur [“CIT(A)”] dated 19/08/2025 passed under section 250 of the Income Tax Act, 1961 (“Act”), which is arising out of intimation u/s. 143(1), dated 24/12/2021 for the Assessment Year (AY) 2020-21.
At the outset, learned counsel for the assessee referring to the grounds of appeal
fairly accepted that impugned order is 2 ITA.No.2335/PUN./2025 (Parag Kiran Gujrathi) an exparte due to non-compliance on the part of the assessee. He further submitted that the sole issue raised in the instant appeal is disallowing Foreign Tax Credit (FTC) on account of delay in furnishing Form
67. Referring to plethora of decisions placed in the legal compilation paper book, he stated that it has been consistently held by this Tribunal that furnishing Form 67 is directory and not mandatory in nature and in the light of the decisions, he prayed that the claim of FTC may please be allowed.
3. On the other hand, ld. Departmental Representative (DR) supported the order of the Ld.CIT(A).
We have heard rival contentions and perused the records placed before us. We observe that assessee is a salaried employee who has earned income from salary in Netherlands. His claim is that taxes have been paid on the foreign salary income in the income tax returns furnished in Netherlands. In the return of income for the A.Y. 2020-21 filed on 25/12/2020, FTC of Rs. 1,77,038/- claimed u/s. 90 of the Act. However, the CPC while processing the return u/s. 143(1)(a) of the Act, has not allowed the claim of FTC because Form 67 which is required for claiming FTC was not filed within the prescribed time limit. It has been claimed by the assessee that due to inadvertent oversight caused by Covid-19 related abnormalities and changes in filing timelines, the Form
3 ITA.No.2335/PUN./2025 (Parag Kiran Gujrathi) 67 could not be furnished on time and was finally submitted on 18/12/2022. We further observe that assessee challenged the order of CPC in not allowing FTC before the Ld.CIT(A), but in spite of furnishing the details in the statement of facts, failed to succeed. From perusal of the impugned order, we notice that the Ld.CIT(A) has condoned the delay in filing of the appeal and thereafter has dealt with merits of the case holding that on account of delay in furnishing Form 67, the alleged FTC is not allowable.
We note that due date for filing of Form 67 for claiming FTC was upto 10/01/2021, however, appellant has filed on 18/12/2022, which is admittedly much prior to passing of the impugned order. This issue of delay in furnishing of Form 67 has come up before this Tribunal on various occasions and though the assessee has referred to as many as 11 decisions, we take note of the recent decision of this Tribunal in the case of Uttamkumar Tukaram Patil vs. ITO in dated 02/05/2025 dealing with the very same issue and has held as follows:- (relevant extract)
“7. We have heard the rival contentions and perused the record placed before us. In the instant appeal, Foreign Tax Credit claim of Rs.8,60,645/- has not been allowed to the assessee on account of delay in filing of Form No.67 which contains the details of FTC. We note that the Intimation u/s.143(1) was passed on 28.03.2021 denying the claim of FTC made by the assessee and at that point of time, country was passing through covid-19 pandemic and restrictions were put in and almost two years period have been removed out of the limitation period by the Hon’ble Apex Court in the case of Cognizance for Extension of Limitation In re (2022) 441 ITR 722 4 ITA.No.2335/PUN./2025 (Parag Kiran Gujrathi) (SC). The assessee has filed the appeal before ld.CIT(A) on 06.12.2023 and therefore there is a delay of about 2 years 06 months. We further observe that in the impugned order ld.CIT(A) has not dealt with the merits of the case on account of delay in filing the appeal by about 2 years 06 months. Assessee has filed the condonation application before ld.CIT(A) stating that notices sent electronically came to his notice only after receipt of notice of arrears of demand in physical form in the last week of October, 2023. These are the main reasons which led the assessee in not filing the appeal within the stipulated time. We therefore considering the facts of the case and the reasons stated by the assessee in the condonation application filed before ld.CIT(A) deem it proper to condone the delay in filing of appeal before ld.CIT(A). Further, since the issue of FTC has been consistently dealt by this Tribunal in plethora of decisions and a view has been taken that filing of Form No.67 is directory and not mandatory in nature and therefore delay in filing of such form should not be taken as a ground for denying the claim of FTC.
Considering the facts of the case, we deem it proper to restore the issue back to the file of Jurisdictional Assessing Officer before whom the assessee shall file all necessary details in support of his claim of FTC which have also been placed in the paper book filed before us. Ld. JAO after examining the veracity of the claim shall allow the claim of FTC after providing reasonable opportunity of hearing to the assessee. Effective grounds of appeal raised by the assessee are allowed for statistical purposes.”
6. From going through the above findings of the Tribunal and also observing that the similar issue is raised before this Tribunal in the instant case, respectfully following the same, we hold that filing of Form 67 is directory in nature and not mandatory. In our view, Ld.CIT(A) ought to have entertained the From 67 filed by the assessee and we, therefore, condone the delay in furnishing of Form 67 filed by the assessee for claiming FTC and direct the Jurisdictional Assessing Officer (JAO) to examine the veracity of the claim by verifying the contents of Form 67 and if found to be in accordance with law, then allow the alleged Foreign Tax Credit to the assessee.
5 ITA.No.2335/PUN./2025 (Parag Kiran Gujrathi) Effective grounds of appeal raised by the assessee are allowed for statistical purposes.
In the result, appeal of the Assessee is allowed for statistical purposes.
Order pronounced in the open Court on 20.11.2025.