Foreign Tax Credit Cannot Be Denied for Late Filing of Form 67: ITAT Delhi
The Income Tax Appellate Tribunal (ITAT) Delhi has ruled in favour of an assessee by allowing him to claim the foreign tax credit, which was denied by the Income Tax Department.
The assessee, Shri Puneet Khanna, filed his Income Tax Return for AY 2020-21, reporting a total income of Rs 1,52,67,570 and claiming a refund of Rs 96,480. He also claimed the double taxation relief of Rs 65,986 under Section 90 of the Income Tax Act for the foreign income. However, he filed the Form 67, which is required to claim double taxation relief under section 90 of the Act, after the due date.
Therefore, the Central Processing Centre (CPC) disallowed the double taxation relief claim and also did not allow TDS/TCS credit of Rs 1,50,114, raising a tax demand of Rs 1,58,830. The assessee filed a rectification request under section 154 of the Act, but the CPC did not rectify the intimation and continued to raise the demand. The assessee again filed a rectification, and this time, CPC rectified the order and allowed him to claim the TDS and TCS benefit, but did not allow him to claim the double taxation relief under section
Aggrieved, the assessee appealed to the CIT(A), but it upheld the CPC decision. Therefore, the assessee approached the Income Tax Appellate Tribunal (ITAT), Delhi.
The learned counsel for the assessee submitted that Form No. 67 filing is not compulsory, but it is a directory held by the Tribunal in many other orders.
The ITAT observed the ruling in the tribunal case of Brinda Rama Krishna in ITA No. 454/Bang/2021 for AY 2018-19, which held that:
- Rule 128(9) does not provide for the disallowance of FTC for delay.
- Filing Form 67 is a directory, not a mandatory requirement.
- DTAA provisions override the Income Tax Act. So, the delayed filing of Form 67 is not fatal to the claim for FTC.
The ITAT Delhi followed this order and partly allowed the assessee’s appeal for statistical purposes. It directed the AO to allow the assessee to claim a foreign tax credit.
Case Citation: Shri Puneet Khanna Vs Income Tax Officer (ITAT Delhi); ITA No. 3046/DE/2025; 26/09/2025; 2020-21
