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Facts
The assessee claimed Foreign Tax Credit (FTC) but failed to submit Form 67 on time, purportedly due to reasons beyond their control. The CPC, under Section 143(1), and subsequently the CIT(A), disallowed the FTC claim based on this procedural lapse, prompting the assessee to appeal before the Income Tax Appellate Tribunal.
Held
The Tribunal, following a coordinate bench decision, held that the denial of FTC solely due to the belated submission of Form 67 is not justified, as it is a procedural requirement. The case was remanded to the Assessing Officer with directions to examine the Form 67 and grant the FTC if the claim is otherwise found admissible.
Key Issues
Whether Foreign Tax Credit (FTC) can be denied solely due to the belated submission of Form 67, a procedural requirement, even if the claim for FTC is otherwise admissible under the Income Tax Act.
Sections Cited
143(1), 250, 90, 128(9), 37BA, 199
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Income Tax Appellate Tribunal, “ A ” BENCH, AHMEDABAD
Before: Shri Sanjay Garg & Shri Narendra Prasad Sinha
"ी संजय गग", "ाियक सद" एवं "ी नरे !साद िस"ा, लेखा सद" के सम%। ] ] Before Shri Sanjay Garg, Judicial Member And Shri Narendra Prasad Sinha, Accountant Member आयकर अपील सं / 546/Ahd/2025 िनधा"रण वष" /Assessment Years : 2020-21 & 2021-22 respectively Rinki Shahikant Gandhi Deputy Commissioner of बनाम/ 19, Kalpana Society Income-tax v/s. Race Course Circle Circle-2(1)(1) Vadodara – 390 007 Vadodara – 390 007 "थायी लेखा सं./PAN: ABYPG 0971 B (अपीलाथ'/ Appellant) (!( यथ'/ Respondent) Assessee by : Shri Manish J. Shah & Rushin Patel, ARs Revenue by : Shri B.P. Srivastava, Sr.DR सुनवाई की तारीख/Date of Hearing : 03/09/2025 घोषणा की तारीख /Date of Pronouncement: 08/09/2025 आदेश/O R D E R
Per Sanjay Garg, Judicial Member:
The captioned appeals have been preferred by the assessee against the separate orders of the Office of the Commissioner of Income Tax (Appeal), Addl/JCIT (A)-7, Mumbai, [hereinafter referred to as ‘CIT(A)’] of even date 29/01/2025 passed u/s.250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for the Assessment Years (AYs) 2020-21 and 2021-2022. Since common facts and issues are involved in both the appeals, these were heard together and are being disposed of by this consolidated order. Assessee’s appeal in for AY 2020-21 is taken as a lead case for the purpose of narration of facts. & 546/Ahd/2025 Rinki Shahikant Gandhi vs. DCIT Asst. Years : 2020-21 & 2021-22 AY 2020-21 2. The assessee has raised the following grounds of appeal:
“1) The CPC, in its intimation order under Section 143(1) has not allowed the appellant's claim of Foreign Tax Credit (FTC) solely due to the delay in submitting Form 67. However, the denial of FTC based purely on procedural grounds is unwarranted as per Section 90 of the Act, which provides for the appellant's right to claim FTC. The appellant contends that FTC claims should not be denied based on late filing of Form 67 which is procedural delays, as the submission of Form 67 is a procedural requirement rather than a substantive condition for claiming FTC.
2) Since income has been disclosed in ITR hence, credit of taxes cannot be denied merely on procedural lapses.
3) As CPC has assessed income from Kenya, then he must have allowed corresponding tax credit FTC. Not allowing Foreign Tax Credit constitutes procedural delay only. Lately Form 67 is filed which is apparently on record.
4) The CIT (Appeals) has erred in understanding the facts related to rule 128(9) that delay in filling form does not justify the denial of FTC and assessment of income is against the rule 37BA r.w.s 199 of the Act.
5) In light of these facts, the appellant respectfully requests your honor to allow FTC claimed in ITR which is Rs. 13,62,005/- or as per calculation by A.O.
6) Add, alter, amend or withdraw: The appellant may be allowed to add, alter, amend or withdraw any ground of appeal either before or at the time of hearing of this appeal.”
3. The sole issue involved in this appeal is relating to the disallowance of claim of Foreign Tax Credit (FTC) on account of delay in submitting the requisite Form 67.
4. The Ld. Counsel for the assessee submitted that due to reasons beyond the control of the assessee, the assessee could not procure Form 67 at the time of filing of the return. The CPC, therefore, processed the return u/s.143(1) of the Income Tax Act, 1961 (in short “the Act”) and disallowed the claim of & 546/Ahd/2025 Rinki Shahikant Gandhi vs. DCIT Asst. Years : 2020-21 & 2021-22 FTC. The assessee, however, duly furnished the Form 67 during the appellate proceedings before the Ld.CIT(A). That under the circumstances, the Ld.CIT(A) should have taken note of the same and allowed the claim of FTC. The Ld. Counsel for the assessee, in this respect, has relied upon the decision of the Kolkiata Bench of the Tribunal in ITA No.1727/Kol/2024, order dated 21/10/2024, wherein under the similar circumstances, the Co-ordinate Bench of the Tribunal, while relying upon other case laws, has held that the Foreign Tax Credit can be allowed to the assessee even if Form 67 is filed late or even filed before the first appellate authority. The relevant paragraph of the order is reproduced as under:
“2. The sole issue raised by the assessee through these grounds of appeal is relating to the non-grant of Foreign Tax Credit (FTS) of Rs.5,19,775/-instead of allowing FTC of Rs.5,402/- only.
The Ld. Counsel for the assessee has submitted that the Assessing Officer (in short "the AO") has denied the FTC to the assessee on account of late submission of Form 67. The Ld. Counsel for the assessee has relied on the following case laws to submit that the FTC can be allowed to the assessee even if Form 67 is filed late or even filed before the First Appellate Authority:
“*Income tax Officer vs. Sandip Choubey (ITA No 742/Kol/2022) (Order of the Hon'ble ITAT in the case of another employee of my employer Pricewaterhousecoopers Prwate Limited for the very same Assessment Year Le. 2020-21 relating to FTC as per Article 25 of the India-United States of America DTAA).
Sartreena Consultants Pvt. Ltd., Kolkata v. ITO, Ward-11(1) (ΙΤΑ 543/Kol/2022).
* Sonakshi Sinh a vs. CIT (ITA No.1704/Mum/2022.”
Ld. DR could not rebut the aforesaid proposition of law submitted by the Ld. Counsel for the assessee. & 546/Ahd/2025 Rinki Shahikant Gandhi vs. DCIT Asst. Years : 2020-21 & 2021-22 4 5. In view of this, the impugned order of Ld. CIT(A) is set aside and the matter is restored to the file of the AO with a direction to examine the Form 67 etc. and thereafter to give the credit of the FTC accordingly.”
Respectfully following the aforesaid decision, the issue is restored to the file of the AO with a direction to examine the Form 67 furnished by the assessee and thereafter to give the credit of the Foreign Tax Credit, accordingly, if the claim is otherwise found admissible, irrespective of the fact that the said Form 67 was filed belatedly by the assessee.
As a result, the appeal of the assessee in AY 2020-21 is treated as allowed for statistical purposes. for AY 2021-22 7. Since the facts and issues involved in this appeal are identical to that has been discussed as above in assessee’s appeal for AY 2020-21 in , hence, our findings given above on the identical issue will mutatis mutandis apply herein, and this appeal of the assessee is also restored to the AO with identical directions.