ITO Vs Smt. Chengam Durga (ITAT Chennai)
Income Tax Appellate Tribunal (ITAT) Chennai heard an appeal by the Revenue against an order by the Commissioner of Income Tax (Appeals) [CIT(A)], which allowed Foreign Tax Credit (FTC) to Smt. Chengam Durga despite a delayed filing of Form 67. The Revenue argued that the CIT(A) erred in treating Form 67 as directory rather than mandatory and relied on decisions of ITAT Bangalore and Jaipur. The dispute arose when the Centralized Processing Center (CPC) denied FTC during return processing under Section 143(1), as Form 67 was not filed with the return. The assessee later submitted the form along with a rectification request under Section 154, which was again denied by the CPC. CIT(A) subsequently allowed the relief, leading to the Revenue’s appeal.
ITAT Chennai upheld the CIT(A)’s ruling, citing the ITAT Bangalore decision in Brinda Ramakrishna vs. ITO and a Madras High Court judgment in Duraiswamy Kumaraswamy (WP No. 5834 of 2022). The tribunal affirmed that Rule 128, which requires Form 67 for FTC claims, is directory and not mandatory. Since the rule is meant to facilitate the Act’s provisions rather than impose strict compliance requirements, ITAT Chennai dismissed the Revenue’s appeal and upheld the FTC grant to the assessee.
