Foreign Tax Credit Cannot Be Denied for Delay in Form 67 – ITAT Remands for Verification

EIM Solutions India Pvt. Ltd. Vs DCIT (ITAT Bangalore)

The Bangalore ITAT in the case of EIM Solutions India Pvt. Ltd. dealt with denial of Foreign Tax Credit (FTC) of ₹51.14 lakh under Section 90, solely due to belated filing of Form 67.

The CPC and CIT(A) denied the claim treating Rule 128(9) as mandatory, holding that Form 67 must be filed within the due date of return u/s 139(1).

However, the Tribunal observed that:

• The assessee had actually suffered foreign tax (Kenya) and filed Form 67 subsequently,
• Judicial precedents (including Madras High Court) consistently hold that delay in filing Form 67 is a procedural lapse,
• FTC is a substantive relief under DTAA, which cannot be denied on technical grounds.

Further, the ITAT noted a procedural lapse by CPC:

• FTC was disallowed without issuing any proper intimation or show-cause under section 143(1), leaving the assessee unaware.

Accordingly, the ITAT set aside the issue to the AO with directions to:

• Verify the FTC claim,
• Grant credit even if Form 67 was filed belatedly.

The appeal was thus allowed for statistical purposes, reinforcing that procedural delays cannot defeat substantive treaty benefits.

FULL TEXT OF THE ORDER OF ITAT BANGALORE

1. This appeal is filed by EIM Solutions India Pvt. Ltd. (the assessee/appellant) for the assessment year 2019-20 against the appellate order passed by the Addl./JCIT(A)-6, Kolkata [1d. CIT(A)] dated 13.8.2025 wherein the appeal instituted on 01.12.2022 against the rectification order passed on 16.11.2022 u/s. 154 of the Income Tax Act, 1961 [the Act] by the DCIT, Circle 2(1)(1), Bangalore was dismissed.