Ashish Sood Vs DCIT (ITAT Chandigarh)
In the case of Ashish Sood Vs DCIT, the ITAT Chandigarh addressed whether a taxpayer is entitled to Foreign Tax Credit (FTC) despite submitting Form 67 after the due date but before the completion of the assessment. Ashish Sood had filed his tax return on September 21, 2020, for the assessment year 2020-21 but delayed filing Form 67, necessary for claiming FTC, until October 18, 2021. The Assessing Officer (AO) and the Commissioner of Income Tax (Appeals) [CIT(A)] denied the credit on the grounds that the form was not filed on time, in line with Rule 128(9) of the Income Tax Rules. The Tribunal analyzed various judgments, notably those of Sonakshi Sinha and Duraiswamy Kumaraswamy Vs. PCIT, which indicated that the deadline for filing Form 67 should be considered directory, not mandatory.
The Tribunal ruled that since there were no adverse consequences specified under Rule 128(9) for a delayed filing of Form 67, disallowing FTC was unjust. Furthermore, the rule was amended in April 2022, extending the deadline for filing Form 67 until the end of the assessment year, reinforcing the Tribunal’s view. Additionally, the Tribunal found that the CIT(A)’s order lacked due consideration of relevant details and included errors such as referencing the wrong rule, showcasing a lack of application of mind. The Tribunal, therefore, concluded that Ashish Sood was eligible for FTC as the delay in filing Form 67 did not invalidate his claim.
