Late Filing of Form 67 Is Not Fatal: ITAT Kolkata Allows Foreign Tax Credit

The assessee, an individual, filed his original return of income for AY 2024–25 on 31.07.2024, which was treated as defective by CPC. A revised return was later filed on 28.08.2024, declaring total income of Rs. 22,36,190. In the revised return, the assessee claimed relief under Sections 90/90A in respect of foreign income earned in Canada.

The assessee had paid foreign tax on Canadian income of Rs. 12,85,576. Form 67 was filed later on 30.01.2025. The Assessing Officer denied the foreign tax credit (FTC) solely on the ground that Form 67 was filed belatedly. The disallowance was upheld by the Ld. Addl/JCIT(A).

Main Issue: Whether the foreign tax credit under Section 90 can be denied merely due to the delayed filing of Form 67.

ITAT’s Ruling: The ITAT held that the foreign tax credit cannot be denied merely on the technical ground of late filing of Form 67. The Tribunal observed that neither Section 90 nor Rule 128 provides that the delayed filing of Form 67 would result in the forfeiture of the foreign tax credit. Relying on a coordinate bench decision in Mahua Bagchi v. ACIT, the Tribunal held that the timely filing of Form 67 is procedural and not mandatory in nature.

Therefore, the order of the Ld. CIT(A) was set aside, and the Assessing Officer was directed to allow the foreign tax credit to the assessee. The appeal was allowed.

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