Basavalinga Sadasivaiah Ajaikumar Vs ADIT (ITAT Bangalore)
Conclusion: Foreign Tax Credit (FTC) should not be denied just because of late filing of Form 67 as Form 67 was directory rule, not mandatory under Rule 128.
Held: Assessee filed his original income tax return on 31-08-2019 and revised the return on 19-06-2020. He submitted Form 67 to claim the foreign tax credit but AO denied the FTC claim due to the late filing of Form 67. AO issued intimation notice to assessee generated under Section 143(1). On appeal, CIT (Appeals) dismissed assessee’s claim. Aggrieved by CIT(A) order, assessee appealed before ITAT arguing that the revised return that included the FTC claim was filed before the issuance of the intimation under Section 143(1). Thus the FTC should have been allowed. It was held that Revenue should have granted the benefit of the foreign tax credit to assessee, even though Form 67 was not submitted along with the original return. In the case Sanjeev Gopal vs ADIT, it was held that non-compliance with procedural norms should not override the provisions of Section 90, which allowed FTC. Form 67 was a directory and not mandatory and its late submission should not result in the denial of FTC. Therefore, AO was directed to allow the FTC claim after due verification under the law.
