Amar Rameshkumar Bhalodia Vs ACIT (ITAT Rajkot)
Belated Form 67 Alone Cannot Defeat Foreign Tax Credit: ITAT Allows ₹30.13 Lakh Claim
The Rajkot Bench of the Income Tax Appellate Tribunal (ITAT) allowed foreign tax credit of ₹30,12,580 that had been denied solely because Form No. 67 was filed beyond the prescribed time. The Tribunal held that delayed filing alone should not defeat the claim where the substantive conditions under the Income-tax Act, 1961 and the applicable Double Taxation Avoidance Agreement (DTAA) were otherwise satisfied.
The assessee, Amar Rameshkumar Bhalodia, filed his return for Assessment Year 2022-23 on 5 November 2022, declaring total income of ₹1,40,20,140. He claimed foreign tax credit of ₹30,12,580 under Section 90.
While processing the return under Section 143(1), the Centralised Processing Centre (CPC) denied the credit on the ground that Form No. 67 had not been filed within the prescribed time.
The assessee sought rectification under Section 154, but the application was rejected. The CIT(A) subsequently dismissed his appeal, sustaining the denial of credit.
Foreign income disclosed and evidence of US taxes furnished
Before the Tribunal, the assessee submitted that he had disclosed the income earned in the United States of America in his Indian return and had paid tax on that income in the USA.
He furnished documentary evidence supporting the foreign taxes paid, contained at pages 74 to 131 of the paper book.
The assessee argued that a delay in filing Form No. 67 could not justify denial of credit otherwise available under Section 90 and the applicable DTAA. He relied on the Hyderabad Tribunal’s decision in Mekala Rakesh Reddy v. DCIT, (2025) 181 taxmann.com 688, where relief had been granted in similar circumstances.
The Revenue supported the orders of the lower authorities.
Substantive eligibility cannot be rejected solely for filing delay
The Tribunal noted that evidence of payment of foreign taxes was on record and that the CPC had rejected the claim solely because Form No. 67 was filed late.
Following the coordinate bench decision, it held that foreign tax credit should not be denied merely on account of delayed filing, provided the substantive conditions under the Act and the applicable DTAA were otherwise fulfilled.
AO directed to allow credit
The Tribunal set aside the orders of the lower authorities on this issue and directed the Assessing Officer to allow the foreign tax credit claim of ₹30,12,580.
Accordingly, the assessee’s appeal was allowed. The ruling preserves the requirement to satisfy substantive eligibility conditions while rejecting belated filing of Form No. 67 as the sole basis for denial.
Cases Discussed
- Mekala Rakesh Reddy v. DCIT — (2025) 181 taxmann.com 688 (ITAT Hyderabad). The source order also spells the name “Makala” in paragraph 04.
FULL TEXT OF THE ORDER OF ITAT RAJKOT
Captioned appeal filed by the assessee, pertaining to Assessment Year (AY) 2022-23, is directed against the order under section 250 of the Income-tax Act, 1961 [hereinafter referred to as ‘the Act’] passed by the Ld. Commissioner of Income Tax (Appeals) [hereinafter referred to as ‘Ld.CIT(A)’], dated 17.04.2026, which in turn arises out of an order passed by assessing officer u/s. 154 of the Act, dated 28.05.2024.
02. Brief facts of the case re that the assessee filed its return of income for the Assessment Year 2022-23 on 05.11.2022, declaring total income of Rs.1,40,20,140/- and claiming Foreign Tax Credit (FTC) of Rs.30,12,580/- under section 90 of the Income-tax Act, 1961. The return was processed by the Centralised Processing Centre (CPC), which denied the claim of FTC on the ground that Form No. 67 had not been filed within the prescribed time. Thereafter, the assessee filed an application under section 154 of the Act seeking rectification of the intimation issued under section 143(1) of the Act. The said application was rejected, thereby sustaining the denial of FTC.
03. Aggrieved thereby, the assessee preferred an appeal before the Ld. CIT(A), which was dismissed. The assessee is, therefore, in appeal before this tribunal.
04. At the time of hearing, the Ld. AR submitted that the assessee had duly disclosed the income earned in the United States of America (USA) in its return of income and had also paid tax on such income in the foreign country. In support of its claim, the assessee furnished documentary evidence of the foreign taxes paid, placed at pages 74 to 131 of the paper book. The Ld. AR contended that merely because Form No. 67 was filed belatedly, the assessee could not be denied the benefit of FTC otherwise available under the applicable Double Taxation Avoidance Agreement (DTAA) and the provisions of section 90 of the Act. In support of the above contention, the Ld. AR relied upon the decision of the coordinate Bench of the ITAT, Hyderabad, in the case of Makala Rakesh Reddy v. DCIT (2025) 181 taxmann.com 688, wherein, as submitted, the claim of FTC was allowed notwithstanding the delay in filing Form No. 67.
05. The Ld. DR, on the other hand, supported the orders of the authorities below.
06. We have heard the rival submissions and perused the material available on record. The issue for consideration is whether the assessee’s claim of FTC can be denied merely on account of belated filing of Form No. 67, despite the assessee having disclosed the relevant foreign income and furnished documentary evidence of payment of tax in the USA. In the present case, the assessee has placed on record documentary evidence in support of the foreign taxes paid, which is available at pages 74 to 131 of the paper book. The claim was denied by the CPC solely on the ground that Form No. 67 had not been filed within the prescribed time. The Ld. AR has also placed reliance on the decision of the coordinate Bench of the ITAT, Hyderabad, in Mekala Rakesh Reddy v. DCIT (supra), wherein relief was stated to have been granted in similar circumstances. Respectfully following the aforesaid decision, we hold that the assessee’s claim of FTC should not be denied merely on account of delay in filing Form No. 67, provided the substantive conditions for claiming such credit under the Act and the applicable DTAA are otherwise satisfied. Accordingly, we set aside the orders of the authorities below on this issue and direct the Assessing Officer allow the claim of the assessee of Rs.30,12,580/-.
07. In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on this 15th day of October, 2026.
