Form 67 Filed Late, US Tax Paid on Time: Bengaluru ITAT Allows Foreign Tax Credit Claim

Sanjeev Sivasankaran Menon Vs DCI (ITAT Bangalore)

Form 67 Filed Late, US Tax Paid on Time: Bengaluru ITAT Allows Foreign Tax Credit Claim

An Indian taxpayer disclosed dividend income from shares in a US company and claimed credit for the tax paid on that dividend in the United States. The Centralised Processing Centre (CPC) denied the credit because Form 67 had not been filed within the prescribed time. The taxpayer filed the form later, but his rectification request and first appeal failed.

The Bengaluru ITAT has now held that delay in filing Form 67 should not, by itself, defeat the foreign tax credit claim. Following its decision in the taxpayer’s own case for another assessment year, it directed the Assessing Officer (AO) to allow credit of ₹1,79,378, subject to verification of the US tax paid and the corresponding income offered to tax in India.

The dividend and the tax credit claimed

Sanjeev Sivasankaran Menon reported salary income of ₹87,15,849 and income from other sources of ₹13,54,444 for assessment year 2019–20. The latter included a dividend of ₹7,17,560 from shares in a US company allotted to him under an employee stock option plan (ESOP).

The order records that ₹1,79,378 was paid as tax in the USA on that dividend. The taxpayer included the dividend in his Indian return and claimed foreign tax credit in respect of the US tax.