Tribunal emphasizes valid reasons for delay in filing Form 67 should not deny Foreign Tax Credit

The Tribunal allowed both appeals filed by the assessee, emphasizing that the delay in filing Form 67 for Foreign Tax Credit should not lead to denial of the credit, especially when valid reasons for the delay exist. The Tribunal's decision was based on the principle that procedural requirements should not override the entitlement to claim Foreign Tax Credit under DTAA.

---

---

Issues: Delay in filing appeal, Double Taxation Relief u/s. 90/91, Details of Assets and Liabilities, Denial of Foreign Tax Credit under section 90/90A.

Delay in filing appeal: The assessee filed an appeal with a delay of 66 days, which was condoned after considering the reasons provided. The appeal was admitted for adjudication.

Double Taxation Relief u/s. 90/91: The assessee, engaged in exporting goods and providing services, claimed relief u/s. 90/91 in the return of income. However, the AO did not grant the credit of relief u/s. 90/90A due to the late filing of Form 67. The assessee argued that the delay was due to reasons beyond their control, such as late receipt of Tax Deduction Certificates from the foreign deductor. The NFAC upheld the AO's decision, stating that the procedural requirements for claiming Foreign Tax Credit are mandatory, and the delay in filing Form 67 led to the disallowance.

Denial of Foreign Tax Credit under section 90/90A: The assessee contended that filing Form 67 before the return of income is directory, not mandatory, citing a Tribunal decision. They argued that DTAA takes precedence over domestic laws, and the delay in filing Form 67 should not result in denial of Foreign Tax Credit. The Tribunal referred to a similar case where it was held that filing Form 67 belatedly does not warrant denial of Foreign Tax Credit. The delay in filing Form 67 was attributed to non-receipt of tax deduction certificates on time from the foreign deductor, justifying the delay. The Tribunal directed the AO to allow the Foreign Tax Credit after due verification, following the decision favoring the assessee.

Conclusion: The Tribunal allowed both appeals filed by the assessee, emphasizing that the delay in filing Form 67 for Foreign Tax Credit should not lead to denial of the credit, especially when valid reasons for the delay exist. The Tribunal's decision was based on the principle that procedural requirements should not override the entitlement to claim Foreign Tax Credit under DTAA.

---