Srikanth Atluri Vijayawada Vs ITO (ITAT Visakhapatnam)
The Income Tax Appellate Tribunal (ITAT), Visakhapatnam allowed the assessee’s appeal against the order of the Commissioner of Income Tax (Appeals), which had upheld the denial of Foreign Tax Credit (FTC) for Assessment Year (AY) 2020-21. The dispute arose because the assessee had not filed Form No. 67 within the time prescribed under Rule 128(9) of the Income Tax Rules, 1962 along with the return of income filed under Section 139(1) of the Income-tax Act, 1961.
The assessee claimed that taxes had been paid in the foreign jurisdiction and that denial of the corresponding Foreign Tax Credit would result in double taxation. Although Form No. 67 had not been filed along with the original return, the assessee subsequently filed the form through an application under Section 154 of the Act seeking rectification. The assessee contended that Rule 128(9) does not prescribe any penal consequence or disallowance for delayed filing of Form No. 67 and, therefore, the Foreign Tax Credit could not be denied solely because of the delay.
During the hearing, the assessee relied on the Tribunal’s own decision in the assessee’s case for AY 2021-22, where it had held that the amendment to Rule 128 was clarificatory in nature and that belated filing of Form No. 67 did not disentitle the assessee from claiming Foreign Tax Credit. In that earlier decision, the Tribunal had directed the Assessing Officer to allow the Foreign Tax Credit despite delayed filing of Form No. 67.
