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Facts
The assessee claimed Foreign Tax Credit (FTC) of Rs.2,26,444/- in their return. However, Form 67, required under Rule 128(9) of the Income Tax Rules, was not filed by the due date. It was filed much later, leading to the rejection of the FTC claim by CPC Bangalore and subsequently by the CIT(A).
Held
The Tribunal held that filing Form 67 is a procedural requirement and that the benefit of Foreign Tax Credit should be allowed even if the form is filed subsequently, citing various High Court and Supreme Court judgments.
Key Issues
Whether the delay in filing Form 67 precludes the assessee from claiming Foreign Tax Credit, despite it being a procedural requirement?
Sections Cited
90, 154, 128(9)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DIVISION BENCH, ‘B’ CHANDIGARH
Before: SHRI RAJPAL YADAV & SHRI MANOJ KUMAR AGGARWAL
O R D E R PER RAJPAL YADAV, VP
The assessee is in appeal before the Tribunal against the order of the ld. Commissioner of Income Tax (Appeals) [in short ‘the CIT (A)’] dated 05.05.2025 passed for assessment year 2021- 22.
In brief, grievance of the assessee is that he has Foreign Tax Credit which was claimed by him in the return u/s 90 of the Income Tax Act. This claim was of Rs.2,26,444/-, however, he A.Y.2021-22 2 failed to file Form 67 as per Rule 128(9) of the Income Tax Rules. This form was required to be filed by 31.12.2021 which was the due date of filing the return. The form was filed on 03.04.2023 alongwith an application u/s 154 of the Income Tax Act. This claim of the assessee has been rejected by the CPC Bangalore and thereafter, application u/s 154 has been rejected. The assessee has challenged this rejection of the application before the CIT (Appeals) but ld.CIT (Appeals) has dismissed the appeal.
With the assistance of ld. Representative, we have gone through the record carefully. It has been unanimously held by Hon'ble High Courts that filing of Form 67 as per the provisions of Section 90 read with Rule 128(9) is a procedural law and if it has been filed subsequently also, then benefit is to be allowed to the assessee. We draw support from the judgement of Hon'ble Supreme Court in the case of Mangalore Chemicals & Fertilizers Ltd. Vs Dy. Commissioner (1992 Supp (1) SCC 21, Sambhaji & others V Gangabai & others 17 SCC 117, Pukhraj Singh Gujral Vs CPC (ITA No. 637/CHD/2024), Duraiswamy Kumaraswamy Vs PCIT, Writ Petition No. 5834 of 2022 (Madras High Court).
ITA No.863/CHD/2025 A.Y.2021-22 3
Therefore, in view of the above judgements, assessee was entitled for the benefit of taxes paid outside India while determining the income of the assessee. Accordingly, we allow the appeal of the assessee and direct the AO to grant credit of Foreign Taxes paid by the assessee,
In the result, appeal of the assessee is allowed.