ITAT Chennai Allows Foreign Tax Credit Claim Despite Late Filing of Form 67

The Income Tax Appellate Tribunal (ITAT), Chennai, has upheld that filing Form No. 67 within the prescribed due date is not mandatory but only a directory in nature.

The assessee, Shri Rajiv Ramesh Lulla, filed his ITR but omitted to disclose the foreign income. Later during the assessment, the assessee filed a revised computation of income and reported the foreign income. He also claimed a Foreign Tax Credit (FTC) of Rs 75,24,894 by filing Form 67, but it was filed after the due date.

The Assessing Officer accepted the foreign income but denied the FTC claim only because Form 67 was not filed within the prescribed time limit. The First Appellate Authority (FAA) also confirmed AO’s decision, saying that the assessee had violated the mandatory timeline prescribed under Rule 128(9) by filing Form No. 67 after the due date.

The Tribunal noted that previous rulings of high courts and tribunals have held that filing Form 67 within the due date is not mandatory but only directory in nature. It held that DTAA provisions override the provisions of the Income Tax Act, and rules cannot reduce any relief given under the Act or the DTAA.

Accordingly, the ITAT condoned the delay in filing Form 67 and the matter was restored to the Assessing Officer for fresh verification. The AO was directed to verify the Form 67 and decide the matter as per the law.