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Facts
The assessee's appeal for assessment year 2018-19 arose from proceedings under section 154 of the Income-tax Act, 1961. The lower authorities denied the assessee's foreign tax credit claim because Form 67 was not filed before the due date. However, the assessee subsequently complied with the filing requirement.
Held
The Tribunal held that the delay in filing Form 67 is a procedural defect and should not deny the claim for Foreign Tax Credit (FTC), especially when DTAA provisions are beneficial. Citing previous judgments, the Tribunal stated that procedural laws should aid substantive rights.
Key Issues
Whether the delay in filing Form 67 before the due date disallows the foreign tax credit claim.
Sections Cited
90, 90A, 139(1), 154
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Income Tax Appellate Tribunal, DELHI BENCH: ‘F’ NEW DELHI
Before: SHRI SATBEER SINGH GODARA & SHRI NAVEEN CHANDRA
ORDER
PER SATBEER SINGH GODARA, JM
This assessee’s appeal for assessment year 2018-19, arises against the Commissioner of Income Tax (Appeals)/Addl. JCIT(A)- 2, Chennai’s DIN and order no. ITBA/APL/S/250/2025- 26/1078504613(1), dated 15.07.2025, involving proceedings under section 154 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’). Heard both the parties. Case file perused.
Suffice to say, it transpires during the course of hearing that both the learned lower authorities have denied the assessee’s foreign tax credit claim of Rs.1,28,946/- under section 90 r.w.s. 90A of the Act for the sole reason that he had not filed/uploaded his corresponding Form 67 on or before the prescribed “due” date in the course of section 154 “rectification”, dated 18th August, 2022 and upheld in the lower appellate discussion. This is what leaves the assessee aggrieved. 4. We have given our thoughtful consideration to the assessee’s and department’s vehement arguments reiterating their respective stands. It further emerges that the assessee had subsequently complied with the above Form 67 filing/uploading post facto the due date thereof as admitted by both the parties. And also, that instant identical issue has been decided by this tribunal in Gurcharan Singh Vs. ITO, dated 04.04.2024, in assessee’s favour and against the department, reading as under:- “ Upon careful consideration, I find that the identical issue was considered by the ITAT, Mumbai Bench in the case of Rohini Hattangadi Vs. CIT(A) in dated 02.12.2022 and the Tribunal had dealt with the issue as under:- 11. Having heard the rival submissions and perused the material on record. It is pertinent to look into Rule 128 of the I. T. Rules for our perusal. The relevant extract is cited for ease of reference: 2 | P a g e “Foreign Tax Credit. 128. (1) An assessee, being a resident shall be allowed a credit for the amount of any foreign tax paid by him in a country or specified territory outside India, by way of deduction or otherwise, in the year in which the income corresponding to such tax has been offered to tax or assessed to tax in India, in the manner and to the extent as specified in this rule. … (9) The statement in Form No.67 referred to in clause (i) of sub-rule (8) and the certificate or the statement referred to in clause (ii) of sub-rule (8) shall be furnished on or before the due date specified for furnishing the return of income under subsection (1) of section 139, in the manner specified for furnishing such return of income.
From the above mentioned Rule 128, it is evident that the assessee has to file Form 67 on or before the due date of furnishing the return of income as per section 139(1) of the Act, which the statement specifies as mandatory and not directory as per the word ‘shall’ used in the said provisions. It is evident that the assessee has filed Form 67 belatedly after the due date for filing of return u/s. 139(1) and, hence, the lower authority have rejected the claim of the assessee. Though the decision cited by the ld. Departmental Representative (ld. DR for short) in Muralikrishna Vaddi, Visakhapatnam (supra) by the co-ordinate bench has held that delay in filing of Form 67 disentitles the assessee to claim FTC as the said procedure is mandatory, we are inclined to peruse the decisions of the tribunal cited by the assessee in the case of Ms. Brinda Ramakrishna (supra). On similar facts, the co-ordinate bench has considered the delay in filing of Form No. 67 as only a procedural defects and has also considered the decision of the Hon'ble Supreme Court in Mangalore Chemicals & Fertilizers Ltd. vs. Deputy Commissioner (1992 Supp (1) Supreme Court Cases21) and Sambhaji and Others vs. Gangabai and others [2008] 17 SCC 117 (SC), which laid down the proposition that procedural law should not be construed as mandatory and should only aid the claim of substantive right.
Furthermore, the said decision of the tribunal has also relied on various decisions, which held that provisions of DTAA override the provisions of the Act, as far as it is beneficial to the assessee. The Tribunal has held that delay in filing Form No. 67 should not by, in anyway, deny the claim of FTC enumerated in the DTAA and the intention of the legislation in the said case has to be construed in a manner which benefits the assessee. The A.O. is hereby directed to allow the FTC claim of the assessee and to grant refund in accordance with the law.
By respectfully following the above cited decision, we hereby allow the appeal filed by the assessee.”
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I find that the above decision fully covers the issue in the present case. Hence, following the precedent as above, I set aside the orders of the authorities below and decide the issue in favour of the assessee.
In the result, the appeal filed by the assessee is allowed.” 5. We thus adopt judicial consistency herein as well to allow the assessee’s impugned claim of foreign tax credit in very terms and direct the assessing authority to frame its consequential computation as per law after verification of all the relevant facts. 6. This assessee’s appeal is allowed. Order pronounced in the open court on 2nd February, 2026 Sd/- Sd/- (NAVEEN CHANDRA) (SATBEER SINGH GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 13th February, 2026. RK/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi
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