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Facts
The assessee, a resident of India, filed her return of income for AY 2023-24 on 31.12.2023, claiming foreign tax credit (FTC) of Rs. 1,49,437/-. The AO, processing the return under section 143(1), disallowed the FTC, stating that Form 67 was not filed within the prescribed time limit.
Held
The Tribunal held that the assessee filed Form 67 on the same day as the return of income. The delay in filing Form 67, which was due before the due date for filing the return, could not be a ground to deny the FTC. The Tribunal relied on its previous decisions and those of other benches.
Key Issues
Disallowance of FTC due to late filing of Form 67 and whether such disallowance is justified when Form 67 was filed on the same day as the ROI.
Sections Cited
143(1), 139(1), 253, 90/90A, 128, 139(4), 246A, 143(1)(a)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI B.M. BIYANI & SHRI PARESH M JOSHI
second Appeal. The Assessee is aggrieved by the order bearing Number:-ITBA/APL/S/250/2024-25/1073139567 (1) dated 11.02.2025 passed by the Ld. CIT(A) u/s 250 of the Act, which is herein after referred to as the “Impugned order”. The Relevant Assessment year is 2023-24 and the Page 1 of 10 - A.Y.2023-24 corresponding previous year period is from 01.04.2022 to 31.03.2023.
Factual Matrix 2.1 That as and by way of an “intimation order” issued u/s 143(1) of the Act, dated 22.03.2024 whereby a demand of Rs.1,29,640/- was created against the assessee by the Ld.
AO.
2.2 The assesee is a pensioner with Government of United Kingdom. [CIT(A) order]/USA [as per the intimation order].
The assessee was a non-resident till A.Y.2022-23, during the year she became resident in India. The assessee filed her ROI on 31.12.2023 for A.Y.2023-24 u/s 139(4) declaring total income of Rs.35,30,130/-. Further the assessee filed
31st the form no.67 on December 2023 vide acknowledgment no.603117750311223 for the availment of foreign tax credit of Rs.1,49,437/- being TDS in UK on the pension income. The return was processed u/s 143(1) of the Act in which credit of foreign tax claimed u/s 90/90A is disallowed & demand is raised after nullifying the refund
Page 2 of 10 - A.Y.2023-24 claimed in ROI. It is required to be noted that in Annexure FSI (As provided by Taxpayer) country code is USA, income from outside India is Rs.12,28,675/- tax paid outside India is Rs.1,49,437/-, the relevant article of DTAA u/s 90/90A(f) is 24. The aforesaid intimation order bears DIN no.CPC/2324/A2/418115899 & that the same is dated 22.03.2024 which is hereinafter referred to as the “Impugned intimation order”.
2.3 That the assessee being aggrieved by the aforesaid “Impugned intimation order” prefers the first appeal u/s 246A of the Act before the Ld. CIT(A) who by the “Impugned Order” has dismissed the first appeal of the assessee on the grounds & reasons stated therein. The core ground & reasons for the dismissal of the first appeal was as under:
“6. Decision: 6.1 and the order appealed against have been thoroughly examined. The central issue for adjudication raised in the present appeal pertains to the sole issue of denying the claim of Foreign Tax Credit (FTC) of Rs. 1,49,437/- claimed u/s 90/90A of the Act while processing the return of Income under section143(1) of the Act as Form 67 was not filed within the prescribed time limit. 6.2 It is noted that while processing the return of Income, the AO denied the FTC of Rs. 1,49,437/- claimed u/s 90/90A of the Act
Page 3 of 10 - A.Y.2023-24 while processing the return of Income under section143(1) of the Act as Form 67 was not filed within the prescribed time limit. 6.3 The appellant through grounds of appeal submitted with Form 35 contended that CPC erred in disallowing foreign tax credit of Rs. 1,49,437, without assigning any reason for the same. 6.4 In this context, it is noted that a taxpayer residing in one country can have multiple sources of income, including foreign income. Any taxpayer with a foreign income source attracts double taxation, both in the source country and the resident country. The government provides a FTC on such income to prevent taxpayers from paying tax twice on the same income. Form 67 of the Income Tax Act is a necessary document that should be filed to avail of this benefit. It is important to note that according to Rule 128 of the Act, a resident taxpayer is eligible to claim credit for any foreign tax paid, in a country or specified territory outside India. The credit shall be allowed only if the assessee furnishes the required particulars in Form 67 within the specified timelines i.e. before the due date of filing of return as specified u/s 139(1) of the Act. 6.5 In the present case, the appellant submitted Form 67 on December 31, 2023, while the deadline for filing Form 67 was before the due date of filing of return as specified u/s 139(1) of the Act for the relevant Assessment Year. The due date for submitting the return in case of the appellant was July 31, 2023. There was a delay in filing the Form
67. Hence, Form 67 was not filed within the time frame outlined by the Act. 6.6 Further, the AO, CPC is empowered to make such adjustments under section 143(1) of the Act, it is crucial to refer to section 143(1) itself:143.(1) Where a return has been made under section 139, or in response to a notice under sub-section (1) of section 142, such return shall be processed in the following manner, namely:
(a) The total income namely: shall be computed a ed after making the following adjustments, OME TAX DEPART
(1) Any arithmetical error in the return;
(ii) An incorrect claim, if such incorrect claim is apparent from any information in the return;
(iii) Disallowance of loss claimed if the return of the previous year for which the set-off of loss is claimed was furnished beyond the due date specified under sub-section (1) of section 139,
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(iv) Disallowance of expenditure indicated in the audit report but not taken into account in computing the total income in the return;
(v) Disallowance of deduction claimed under sections 10AA, 80-IA, 80-IAB, 80-IB, 80-IC, 80-ID, or section 80-IE if the returm is furnished beyond the due date specified under sub-section (1) of section 139; or (vi) Addition of income appearing in Form 26AS or Form 16A or Form 16 which has not been included in computing the total income in the return Provided that no such adjustments shall be made unless an intimation is given to the assessee of such adjustments either in writing or in electronic mode.
Provided further that the response received from the assessee, if any, shall be considered before making any adjustment, and in a case where no response is received within thirty days of the issue of such intimation, such adjustments shall be made.
6.7 The processing of the return under Section 143(1)(a) of the Act goes beyond mere formalities; it includes the authority to make adjustments based on errors that are apparent within the income tax return. Section 143(1)(a)(ii) specifically allows for adjustments to incorrect claims that are evident from the return or accompanying documents. For instance, a deduction claim can be deemed incorrect if information such as the filing date of Form 67 indicates non-compliance with statutory time limits.
6.8 The filing date of Form 67 income is clearly indicated on the document itself, allowing for a straightforward assessment of compliance with statutory requirements. This process is procedural and falls squarely within the scope of Section 143(1)(a)(ii) of the Act. The Central Processing Centre (CPC) is adequately equipped to perform this task efficiently.
6.9 Therefore, I find no error in the Assessing Officer's decision to disallow the appellant's claim for Foreign Tax Credit under Section 139(1) of the Act during the processing of the return under Section 143(1) of the Act.
H Based on the above considerations, I find no merit in the current appeal and accordingly dismiss the appeal.”
Page 5 of 10 - A.Y.2023-24 2.4 The assessee being aggrieved by the “Impugned Order” has preferred the instant second appeal before this Tribunal & has raised the following grounds of appeal in the Form No.
36 against the “Impugned Order” which are as under:-
“1.That the learned assessing officer and honourable CIT (A) erred in disallowing the claim of foreign tax credit.
That the CIT (A) erred in not granting sufficient opportunity of being heard during the appellate proccedings. 3.That the appellant craves leave to alter, amend, delete and add any ground/s of appeal”
Record of Hearing 3.1 The hearing in the matter took place before this Tribunal on 29.01.2026 when the Ld. AR for & on behalf of the Assessee appeared before us & interalia contended that the “Impugned Order” is bad in law, illegal & not Proper. It is in the violation of the principles of natural justice. It therefore deserves to be set aside by this tribunal in exercise of its appellate jurisdiction conferred upon it under the Act. The Ld. AR has placed on the record of this Tribunal a four pager submissions along with enclosures in support. [total 36 pages] [Annexure 1 to 6]. the Ld. AR stated that the relevant form no.67 for claiming FTC was filed by the assessee &
Page 6 of 10 - A.Y.2023-24 despite such filling the Ld. AO in the “Impugned intimation order” has denied to the assessee the credit of the same to the extend of Rs.1,49,437/-. The Ld. AR then invited our attention to page 10 & 11 of the written submissions (supra) evidencing that the form no.67 was filed electronically bearing acknowledgment no.602710840311223 on 31.12.2023. It was submitted that ROI was also filed on 31.12.2023 page 6 & 12 of written submission is proof of ROI filed on 31.12.2023.
Reliance was placed on decision of this Tribunal in ITANo.176/Ind/2024 dated 28.06.2024 in case of Asha Rani Pandya vs. DCIT/ACIT 1(1) Indore in support of the claim.
Per contra Ld. DR for the revenue supported the “impugned order” & “impugned intimation order”. In the rejoinder the Ld. AR submitted & reiterated that the ultimately the form no. 67 was filed on the date of ROI i.e. 31.12.2023.
Observations Findings & conclusions
Page 7 of 10 - A.Y.2023-24 4.1 We have to decide the legality, validity and proprietary of the “impugned order” basis records of the case & the rival submission canvassed before us.
4.2 We have carefully perused the records of the case and have heard the submissions.
4.3 We basis records of the case & after hearing & further upon examining the contentions of the Ld. AR and Ld. DR are of the considered opinion that the “Impugned Order” is indeed not proper & so also “Impugned intimation Order”.
The ROI was filed on 31.12.2023 & so also form no.67 on 31.12.2023. The claim of the assessee is perse established with proof in support as narrated in para 3.1 (supra). The reasoning of Ld. CIT(A) in para 6.5 that since the last date of filing of the return u/s 139(1) was 31.07.2023 & there was delay in filing the form no.67 can be no ground to deny the substantive benefit of FTC which claim was made in ROI filed on 31.12.2023 & the necessary proof too was filed on 31.12.2023. The Ld. DR has not questioned the authenticity & genuineness of the FTC [page 10 & 11] of Page 8 of 10 - A.Y.2023-24 written submission ] in any manner whatsoever. Further the issue in hand is fully covered by the decision of this tribunal cited above & including the decision of ITAT Chandigarh Bench in ITANo.747/Chd/2023 in case of Ashish Sood vs.
DCIT Circle (1)-(1) Chandigarh dated 23.04.2024.
4.4 In view of the premises drawn up by us, we set aside the “Impugned Order” and remand back the case to the file of Ld. AO to give due appreciation/credit after due verification of form no. 67.
5 Order 5.1 In the result, the Appeal of the assessee is allowed for statistical purpose.
Pronounced in open court on 06.02.2026.
Sd/- Sd/- (BHAGIRATH MAL BIYANI) (PARESH M JOSHI) ACCOUNTANT MEMBER JUDICIAL MEMBER
Indore Dated : 06/02/2026 Patel/Sr. PS
Page 9 of 10 - A.Y.2023-24 Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Senior Private Secretary Income Tax Appellate Tribunal Indore Bench, Indore
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