Foreign Tax Credit cannot be denied for delay in furnishing of Form No. 67

Shashidhar Seetharam Sharma Vs ITO (ITAT Bangalore)

ITAT Bangalore held that rule 128(9) of the Income Tax Rules doesn’t provide for disallowance of Foreign Tax Credit in case of delay in filing of Form No. 67 and Filing of Form No. 67 is not mandatory, hence Foreign Tax Credit cannot be denied for delay in furnishing of Form No. 67.

Facts- The income from other sources included dividend income of Rs.4.77,500 received from a Denmark Company. On this dividend received from Denmark. TDS of Rs.1,28.925 was deducted @ 27%. The appellant did not claim this TDS of Rs.1,28,925 in the return filed u/s 90/91. The return was processed u/s 143(1) and an intimation order dated 30-03-2019 was passed. The appellant subsequently filed Form No. 67 (statement of income from a country or specified territory outside India and Foreign Tax Credit) on 08-02-2020 and made a rectification application on 29-05-2020 before the CPC Bangalore for giving credit to the Taxes deducted outside India. The CPC rejected the claim vide order dated 02-06-2020 stating that the fresh claims of relief was being sought in the rectification application and which is not a mistake apparent from the records. Accordingly, the rectification application was rejected. The assessee has filed this appeal on 03-07-2020 against the order rejecting the rectification application. The NFAC rejected the said appeal.

Aggrieved by the order of NFAC (appeal), the Assessee is in appeal before this Tribunal.

Conclusion- The said issue under consideration is no longer res integra. We note that on identical issue, the Co-ordinate Bench of ITAT, Bangalore in the case of Brinda Rama Krishna (in ITA No. 454/Bang/2021 for AY.2018-19), order dated 17.11.2021 held that (i) Rule 128(9) of the Rules does not provide for disallowance of FTC in case of delay in filing Form No.67; (ii) filing of Form No.67 is not mandatory but a directory requirement and (iii) DTAA overrides the provisions of the Act and the Rules cannot be contrary to the Act. Therefore, non-furnishing of Form No.67 before the due date u/s 139(1) of the Act is not fatal to the claim for FTC.

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