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Facts
The appellant, a resident foreign citizen, claimed Foreign Tax Credit (FTC) of Rs. 5,95,398 for income earned from Germany for AY 2020-21. The claim was denied by the CPC during processing u/s. 143(1) and upheld by CIT(A), on the ground that Form 67 was not filed within the due date prescribed u/s. 139(1) of the Act.
Held
The Tribunal held that while Form 67 was not filed by the return due date, it was available with the CPC when the return was processed. It ruled that the time limit for filing Form 67 is directory, not mandatory, and directed the CPC to amend the intimation under Section 143(1) to consider the Form 67 filed by the appellant.
Key Issues
Whether the denial of Foreign Tax Credit due to late filing of Form 67 was justified, considering the form was available during processing and the filing deadline for Form 67 is directory, not mandatory.
Sections Cited
143(1), 139(1), 154
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, COCHIN BENCH
Before: SHRI GEORGE GEORGE K., VP & SHRI INTURI RAMA RAO, AM
O R D E R Per: Inturi Rama Rao, AM This appeal filed by the assessee is directed against the order of the National Faceless Appeal Centre, Delhi [CIT(A)], dated 23.01.2025 for Assessment Year (AY) 2020-21.
Brief facts of the case are that the appellant is a foreign citizen but a resident of India. The return of income for AY 2020-21 was filed on 30.03.2021 claiming credit for foreign tax credit of Rs. 5,95,398/- in respect of income earned from Germany. The said return of income was processed u/s. 143(1) of the Income Tax Act, Jorg Roland Manfred Drechsel 1961 (the Act) vie intimation dated 24.12.2021denying benefit of foreign tax credit on the ground that Form 67 was not filed within the due date prescribed u/s. 139(1) of the Act. Being aggrieved, a petition u/s. 154 was filed seeking rectification of intimation. However, the same came to be rejected vide order dated 28.12.2021.
Being aggrieved, an appeal was filed before the CIT(A), who vide the impugned order confirmed the action of the AO.
Being aggrieved, the appellant is in appeal before us in the present appeal.
The learned counsel for the assessee submitted that the appellant was pursuing remedy through Grievance Cell and the appellant was also not in the country. Having considered the findings made in the in the intimation, on merits the learned counsel for the assessee submits that Form 67 was filed along with the return of income and very much available at the time of processing of the return of income by the CPC. He further submitted that the time period prescribed for filing Form 67 is only directory and not mandatory.
The learned Sr. DR vehemently supported the orders of the lower authorities.
We have heard rival contentions and perused the material available on record. The issue in the present appeal is that whether or not the CPC, Bangalore is justified in denying the credit for Jorg Roland Manfred Drechsel Foreign Tax paid for the reason that the Form 67 was not filed within the due date of filing of the return of income as specified under the provisions of section 139(1) of the Act. Admittedly, in the present case, Form No. 67 was not filed within the due date for filing of the return of income under the provisions of section 139(1) of the Act, but Form No. 67 was filed on 30.03.2021. The CPC, Bangalore had processed the return of income as on 24.12.2021, which means that Form No. 67 was very much available with the CPC, Bangalore. Therefore, the CPC, Bangalore cannot deny the claim for credit for foreign tax paid merely because Form No. 67 was not filed within the due date specified for filing the return of income under the provisions of section 139(1) of the Act, as it is merely a directory. Therefore, I direct the CPC, Bangalore to amend the Intimation u/s. 143(1) of the Act by taking into consideration the Form No. 67 filed by the appellant. Accordingly, the grounds of appeal filed by the assessee stand partly allowed.
In the result, the appeal filed by the assessee stands partly allowed.
Order pronounced in the open court on 16th May, 2025.