ITAT Kolkata: Delay in Form 67 Filing Not Grounds to Deny Foreign Tax Credit

The Appellate Tribunal ITAT Kolkata ruled in favor of the assessee in an appeal against the denial of foreign tax credit due to late filing of Form 67. The Tribunal held that the delay in filing the form was procedural and not a valid reason to deny the credit. It directed the Assessing Officer to allow the foreign tax credit claimed by the assessee, emphasizing that the Act does not specify a timeline for such filing. The decision was made on 13th April, 2023, in favor of the assessee.

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Issues Involved:
The judgment addresses the denial of foreign tax credit by the ld. CIT(Appeals) for late filing of Form 67 u/s 143(1) of the Act.

Summary:
The Appellate Tribunal ITAT Kolkata heard an appeal by the assessee against the order of the ld. Commissioner of Income Tax (Appeals) regarding the denial of foreign tax credit of Rs.6,97,756/- due to late filing of Form 67 after the return of income due date. The assessee, an individual earning income from a company in Mozambique, filed Form 67 after the return but within the assessment period. The Tribunal cited precedents where the filing of Form 67 was considered procedural and not a basis for denying foreign tax credit. The Tribunal emphasized that the rule does not provide for disallowance of foreign tax credit in case of delay in filing Form 67, and the Act does not prescribe a timeline for such filing. The Tribunal directed the Assessing Officer to allow the foreign tax credit claimed by the assessee, as the form was filed before the completion of the assessment proceedings, despite not complying with Rule 128(9) of the Income Tax Rules. The appeal was allowed in favor of the assessee, following previous decisions and lack of contrary precedence presented by the revenue department.

In conclusion, the Tribunal ruled in favor of the assessee, directing the Assessing Officer to accept Form 67 and allow the eligible foreign tax credit as per the law. The decision was pronounced in the open court on 13th April, 2023.

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