Sucharitha Reddy Mettu Vs ITO (ITAT Hyderabad)
ITAT Hyderabad: Foreign Tax Credit Cannot Be Denied for Delay in Filing Form 67; Requirement Held Directory
In this case, the assessee, an individual with foreign income from the USA, claimed foreign tax credit (FTC) under section 91 but filed Form 67 after the due date under section 139(1), though before completion of assessment. The AO denied FTC solely on the ground of delayed filing, and the CIT(A) upheld the denial.
The ITAT held that filing of Form 67 under Rule 128 is directory and not mandatory, and if the form is furnished before completion of assessment, it constitutes sufficient compliance. The Tribunal relied on judicial precedents including High Court rulings and earlier ITAT decisions.
It was emphasized that substantive benefit of FTC cannot be denied on procedural delay when the income has been offered to tax in India and taxes have been paid abroad, as the provisions aim to avoid double taxation.
Accordingly, the ITAT set aside the order of the CIT(A) and directed the AO to allow foreign tax credit as per Form 67. The appeal was allowed in favour of the assessee.
FULL TEXT OF THE ORDER OF ITAT HYDERABAD
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