The Delhi ITAT while allowing the Foreign Tax Credit (FTC) held that filing Form 67 is a procedural/directory requirement and is not a mandatory requirement.
The assessee filed her return for AY 2020-21 declaring income of Rs. 15,17,460. The return was processed under section 143(1) of the Income Tax Act, 1961 and intimation was issued as per which Foreign Tax Credit (FTC) of Rs. 1,61,528 of the assessee’s United States of America income was not considered even though Form 67 was filed.
The assessee filed a revised return. The revised return was also processed and intimation was issued under section 143(1) but the claim of FTC was not allowed.
The assessee filed an appeal before the Ld. CIT(A). It was, interalia submitted that the assessee filed a rectification petition under section 154 of the Act on 07.01.2022 which was rejected by the Ld. Assessing Officer on 02.06.2022 on the ground that the assessee failed to furnish Form 67 on or before the due date for furnishing the return prescribed under section 139(1) which is mandatory according to Rule 128(9) of the Income Tax Rules, 1962.
It was also submitted that under section 90 of the Act r.w. Article 25(2)(a) of the India-USA DTAA claim of FTC cannot be disallowed for non-compliance of procedural requirement prescribed under the Rules.
The Rule nowhere provides that if Form 67 is not filed within time, relief sought by the assessee under section 90 of the Act would be denied.
The tribunal held that the solitary ground of denial of the claim of the assessee for FTC is delay in filing Form 67. It is an admitted position that the assessee filed Form 67 on 26.03.2021 alongwith the revised return before the end of the relevant AY 2020-21 which is in conformity with the CBDT notification No. 100/2022 amending Sub Rule 9 of Rule 128 of the Rules. Various coordinate benches of the Tribunal have held that filing Form 67 is a procedural/directory requirement and is not a mandatory requirement.
Case Title: Neha Kapoor Versus ITO
