Delay in Form 67 Filing Not Fatal; ITAT Allows FTC Claim to Actor Sachin Shrikant Khedekar

A professional film artist earned roughly Rs. 26.84 lakh from international projects, paying Rs. 5.36 lakh in taxes abroad. While he reported this income in his Indian tax return on time, he missed the deadline for filing Form 67 the specific document required to claim Foreign Tax Credit (FTC).

The tax department’s central processing system automatically rejected his credit claim. Even when the artist submitted the form later during rectification proceedings with full proof of payment, the authorities refused to budge, arguing that the delay violated Rule 128(9).

Central Issue: Can the tax department permanently deny a foreign tax credit simply because Form 67 was filed late, even if the taxes were legitimately paid?

Tribunal’s Ruling: The Tribunal stepped in to correct this “procedural” approach, ruling that a delay in filing a form shouldn’t lead to a total loss of tax relief. It held that the requirement to file Form 67 is “directory,” not mandatory. In plain terms, it’s a procedural step, not a rigid law that kills the claim if missed.

The Tribunal pointed out that the artist had already disclosed the income and the taxes paid. Furthermore, it noted that the government has since relaxed the rules (effective April 2022), allowing more time for such filings a clear sign that the intent isn’t to punish taxpayers for minor timing issues. The Assessing Officer was directed to accept the delayed form and grant the credit based on its actual merits.

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