Prakash Varadarajulu Vs DCIT (ITAT Chennai)
The Income Tax Appellate Tribunal (ITAT) Chennai, in the case of Prakash Varadarajulu Vs. DCIT, has ruled that the delayed filing of Form 67 does not automatically lead to the denial of foreign tax credit (FTC). The appeal was filed by the assessee against an intimation from the Centralized Processing Centre (CPC), which had denied an FTC claim of ₹49.84 lakh for the Assessment Year 2020-21. The CPC’s denial was upheld by the Commissioner of Income Tax (Appeals), or CIT(A), on the grounds that while the assessee’s return of income was filed on time under Section 139(1), Form 67 was filed a few days after the due date.
The ITAT first addressed a procedural matter, condoning a 129-day delay in the assessee’s appeal. The assessee submitted an affidavit explaining that he was on an international assignment and was unable to file the appeal documents on time. After reviewing the affidavit, the bench deemed the reason sufficient and admitted the appeal for a hearing on its merits.
The core legal issue centered on whether the requirement to file Form 67 by the due date specified under Section 139(1) is a mandatory condition for claiming FTC. The assessee’s counsel argued that filing Form 67 should be considered a directory, rather than a mandatory, requirement.
