Hariharan Krishnan Vs ITO (ITAT Bangalore)
Foreign Tax Credit Put in the Wrong Column, Form 67 Filed Late: ITAT Allows the Claim
A taxpayer included his US deputation salary in his Indian return and sought credit for the tax paid on that income in the United States. In the original return, however, he inadvertently claimed the amount under section 89, which concerns salary relief, instead of section 90, the provision invoked for foreign tax credit under the India–USA tax treaty. He corrected the claim in a revised return, but filed Form 67 only later.
The Centralised Processing Centre (CPC) denied the foreign tax credit because Form 67 had not been filed within the prescribed time. The Bengaluru ITAT has now held that late filing of Form 67 alone cannot defeat an otherwise admissible credit. It directed the Assessing Officer (AO) to allow the claimed ₹95,537, subject to verification of the claim and the form.
How the filing error arose
Hariharan Krishnan was employed with Infosys and was deputed to the United States during the year relevant to assessment year 2019–20. His salary relating to the deputation was taxed in the USA. The Tribunal’s order records US tax equivalent to ₹95,537.
The assessee included the deputation salary in his Indian gross total income. But while preparing the original return, he placed the ₹95,537 claim under section 89 rather than claiming foreign tax credit under section 90 read with the India–USA Double Taxation Avoidance Agreement (DTAA).
He filed a revised return on 9 November 2019 making the section 90 claim. Form 67, the prescribed form under Rule 128(9), was filed on 1 April 2021. The CPC disallowed the credit in the intimation under section 143(1). The assessee then sought rectification under section 154, but the claim was not granted.
This was therefore a case in which the foreign salary had been disclosed in India and the taxpayer had corrected the provision under which he sought relief. The remaining objection was the timing of Form 67.
The CIT(A)’s view
In his appeal, the assessee argued that Form 67 had been furnished and that its filing deadline was a procedural requirement. According to him, the delay should not take away credit for tax paid abroad on income also included in his Indian return.
The Commissioner of Income Tax (Appeals) disagreed. The CIT(A) held that the statutory and prescribed due dates had to be followed and upheld the CPC’s denial because Form 67 was not filed within time.
Before the ITAT, the assessee repeated that the form had been filed on 1 April 2021 and submitted that the time requirement was directory rather than mandatory. The department supported the CIT(A), relying on the admitted delay.
What the Tribunal decided
The ITAT framed the dispute narrowly: could the ₹95,537 foreign tax credit be denied merely because Form 67 was filed after the prescribed due date?
It followed an earlier Bengaluru Bench decision in Deepak Shimoga Padmaraju v. ADIT/ITO, which in turn had followed Vinodkumar Lakshmipathi v. CIT(A), NFAC. As the present Bench explained those decisions, Rule 128(9) does not provide for disallowance of foreign tax credit solely because Form 67 was filed late. The requirement to furnish it within the prescribed time had been treated as directory, so a delay in furnishing the form was not fatal to the substantive claim.
The Bench found that Krishnan had filed Form 67, albeit belatedly, and that the credit had been refused only on that ground. It therefore set aside the CIT(A)’s order. The AO was directed to allow foreign tax credit of ₹95,537 as claimed, subject to verification of the claim and Form 67. The appeal was allowed.
What the ruling does—and does not—settle
The order gives relief from a timing objection. It does not say that entering an amount in Form 67 automatically establishes the amount of credit due. The AO must still verify the underlying claim and the form, as the Tribunal expressly directed.
The initial mistake between sections 89 and 90 is also a distinctive feature of this case. The taxpayer corrected the provision in a revised return dated 9 November 2019. The ITAT’s decision then addressed the separate objection that the supporting Form 67 arrived later.
The order should accordingly be read in its factual setting: salary earned during a US deputation, included in Indian income; tax stated to have been paid in the USA; a corrected claim in the revised return; and subsequent filing of the prescribed form.
Author’s comment
This decision is helpful where a foreign tax credit claim has been rejected solely because Form 67 was filed late. It follows the Bengaluru Tribunal’s earlier view that a procedural delay should not extinguish a claim that can be checked against the foreign tax payment and the income disclosed in India.
It also shows why two corrections should be kept distinct. Correcting section 89 to section 90 in the return put the claim under the provision invoked for treaty relief. Filing Form 67 supplied the prescribed particulars for that claim. The Tribunal accepted that the latter step, though late, could still be examined.
For the AO’s verification, the decisive records will be those linking the US tax of ₹95,537 to the deputation salary included in the Indian return, along with the revised return and Form 67. The ruling removes lateness of the form as the sole reason for rejection; it leaves factual verification intact.
Cases Discussed
- Deepak Shimoga Padmaraju v. ADIT/ITO [2024] 162 taxmann.com 96 (Bangalore – Trib.)/[2024] 206 ITD 803 (Bangalore – Trib.) — followed; delayed filing of Form No. 67 was held not fatal to an otherwise admissible foreign tax credit.
- Vinodkumar Lakshmipathi v. CIT(A), NFAC, Delhi [2022] 145 taxmann.com 235 (Bangalore – Trib.) — followed in Deepak Shimoga Padmaraju; Rule 128(9) does not provide for disallowance of FTC merely for delay in filing Form No. 67.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
The present appeal filed by the assessee pertaining to A.Y. 2019-20 is directed against the order of the learned Commissioner of Income Tax (Appeals) (hereafter, the learned CIT(A)) under section 250 of the Income Tax Act, 1961 (hereafter, the Act) vide order dated 15.09.2025.
2. In the memo of appeal, the assessee raised various grounds of appeal, which revolve around the denial of foreign tax credit u/s 90 of the Act to the tune of Rs. 95,537/-
3 The brief facts are that the assessee is an individual who was employed with M/s Infosys. During the year under consideration, the assessee was deputed to the USA, and the income pertaining to USA deputation was subject to tax in the USA. Accordingly, the assessee paid tax equivalent to Rs. 95,537/- in the USA. In the return of income, the salary drawn during the USA deputation was included in the gross total income. However, the Foreign Tax Credit (FTC) of Rs. 95,537/- was inadvertently claimed as relieved under Section 89 of the Act instead of claiming the same u/s 90 of the Act.
3.1 Subsequently, the ROI was revised on 09.11.2019 claiming correct deduction of FTC under Section 90 of the Act read with India-USA DTAA, but Form No. 67 prescribed under Rule 128(9) of the Income-tax Rules, 1962 was not filed again. Hence, the claim of FTC in the revised return was disallowed in the intimation order u/s 143(1) of the Act. Thereafter, Form 67 was filed for the first time on 1.4.2021. and filed an application for rectification u/s 154 of the Act seeking grant of FTC. However, the claim was not allowed.
3. Aggrieved, the assessee filed an appeal before the Ld. CIT(A). It was submitted that filing of Form No. 67 within the prescribed time is only a procedural requirement. The assessee had duly filed Form No. 67 and the substantive claim of FTC could not be denied merely because the form was filed after the prescribed due date. The assessee also relied upon various judicial decisions in support of the claim.
3.1 The Ld. CIT(A), however, did not accept the submissions of the assessee. The Ld. CIT(A) held that the assessee was required to adhere to the prescribed due dates under the Act. Since Form No. 67 was not filed within the prescribed due date, the action of the CPC in denying the relief claimed u/s 90/90A of the Act was held to be justified. Accordingly, the appeal of the assessee was dismissed.
4. Being aggrieved by the order of the Ld. CIT(A), the assessee is in appeal before us. The Ld. AR reiterated the submissions made before the lower authorities. It was submitted that the assessee duly filed Form No. 67 on 01.04.2021 and that filing the said form within the prescribed time is directory, not mandatory. It was submitted that the substantive claim of FTC of Rs. 95,537/-otherwise allowable under the Act read with the provisions of the DTAA, cannot be denied merely on account of delay in filing Form No. 67.
5. The Ld. DR, on the contrary, vehemently supported the orders of the lower authorities. It was submitted that the assessee had admittedly not filed Form No. 67 within the prescribed due date. Therefore, the CPC was justified in denying the claim of FTC and the order of the Ld. CIT(A) does not call for any interference.
6. We have considered the rival submissions of both the parties and perused the materials available on record. The short issue before us is whether the FTC of Rs. 95,537/- can be denied merely because Form No. 67 was filed after the prescribed due date.
6.1 It is an undisputed fact that the assessee filed the revised return of income on 09.11.2019 claiming FTC of Rs. 95,537/- in respect of the taxes paid outside India. Form No. 67 prescribed under Rule 128(9) of the Income-tax Rules, 1962 was subsequently filed on 01.04.2021. The claim of FTC has been denied on the ground that Form No. 67 was not filed within the prescribed due date.
6.2 We find that the issue is covered by the decision of the Coordinate Bench of this Tribunal in the case of Deepak Shimoga Padmaraju v. ADIT/ITO reported in [2024] 162 taxmann.com 96 (Bangalore – Trib.)/[2024] 206 ITD 803 (Bangalore – Trib.). In the said decision, the Tribunal, following the decision in Vinodkumar Lakshmipathi v. CIT(A), NFAC, Delhi [2022] 145 taxmann.com 235 (Bangalore – Trib.), held that Rule 128(9) of the Income-tax Rules, 1962 does not provide for disallowance of FTC merely on account of delay in filing Form No. 67. It was further held that filing of Form No. 67 within the prescribed time is a directory requirement and that delay in furnishing the same is not fatal to the claim of FTC. The relevant paragraphs of the decision in the case of Deepak Shimoga Padmaraju (supra) are reproduced below:
4. Considering the rival submissions, we note that Form 67 filed by the assessee after the due date, which is 22/10/2022 and earning salary income from Germany and claiming FTC of Rs.5,20,431/-. It was also brought into the notice of the CIT (A) to the Article 23 of IndoGermany DTAA for avoidance of double taxation. However, the CIT(A) has not accepted the FTC claimed by the assessee observing that the assessee has not filed the Form No. 67 within the due date. We note from the Form No.35 that the appeal was filed by the assessee before the CIT(A) against 143(1) of the intimation. On going through the judgment cited supra by the ld.AR of the assessee. similar issue has been decided by the coordinate bench of the Tribunal and for the sake of convenience, we reproduce the relevant portion of the order as under:-
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5. Respectfully following the above judgment, we direct the AO to give credit for foreign tax credit as per Form No.67 filed on 22/10/2022 after due verification.
6.3 In the present case also, Form No. 67 was duly filed by the assessee, though belatedly. The claim has been denied only on account of the delay in filing the said form. Therefore, the ratio laid down by the Coordinate Bench in the aforesaid decisions squarely applies to the facts of the present case.
6.4 We are of the considered view that FTC, being a substantive claim, cannot be denied merely on account of delay in filing Form No. 67 when the assessee has subsequently furnished the prescribed form. The requirement of filing Form No. 67 within the prescribed time has been held to be directory in nature by the Coordinate Bench of this Tribunal. Therefore, the delay in filing the said form, by itself, cannot be a ground to deny the FTC otherwise admissible to the assessee.
6.5 In view of the above and respectfully following the decision of the Coordinate Bench in the case of Deepak Shimoga Padmaraju (supra), we are unable to sustain the order of the Ld. CIT(A). Accordingly, we set aside the order of the Ld. CIT(A) on this issue and direct the AO to allow FTC of Rs. 95,537 as claimed by the assessee, subject to verification of the claim and Form No. 67 filed by the assessee. Accordingly, the grounds raised by the assessee are allowed.
7. In the result, the appeal filed by the assessee is allowed.
Order pronounced in the open court on 24th Sept. 2026.
