Filing Form 67 within time isn’t mandatory condition for claiming foreign tax credit : ITAT
- CA Ila Jindal
- Jan 18, 2024
- 1 min read
#ITAT order IT APPEAL NO. 90 (JAB.) OF 2023
[ASSESSMENT YEAR 2021-22] SEPTEMBER 20, 2023
Facts of the case:
> The assessee is an individual and derives income from house property, income from capital gains, income from other sources and also receives salary from foreign country Maynmar.
> The assessee has included the foreign salary income of Rs.13,99,110/- in the total income disclosed and also tax of Rs.2,39,346/- paid/deducted in Maynmar was claimed as Foreign Tax Credit(FTC).
> The assessee has filed Form No 67 online on the portal of the Income Tax Department on 6.07.2022 in order to comply with Rule 128 of Income Tax Rules.
>The return of income was processed under section 143(1) of the Act on 05.07.2022 accepting the income as per the return of income filed by the assessee but no relief was granted under Section 90 of the Act in respect of the Foreign Tax Credit(FTC) and raised the demand of Rs.3,36,030/.Subsequently.
ITAT Findings :
>Filing Form 67 within time isn’t mandatory condition for claiming foreign tax credit. Where there is no amendment section 90 with regard to claim of FTC, rule procedures are directory and not mandatory, thus, FTC could not be disallowed for delay in filing Form 67.
>It was submitted that when there is no condition prescribed in DTAA that the FTC can be disallowed for non-compliance of any procedural provision. As the provisions of DTAA override the provisions of the Act, the Assessee has vested right to claim the FTC under the tax treaty, the same cannot be disallowed for mere delay in compliance of a procedural provision.
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