Rajesh Venkatesh Helavar Vs DCIT (ITAT Bangalore)
FTC Cannot Be Denied for Late Form 67 – Rule 128 Procedural, Sections 90 & 91 Substantive- ITAT Bangalore
Background
Assessee, an Indian resident individual, filed his return of income for AY 2019-20 & claimed Foreign Tax Credit (FTC) in respect of taxes paid outside India on income offered to tax in India. However, the CPC denied the FTC on the ground that Form 67-mandated under Rule 128-was not filed within the prescribed time.
Assessee’s appeal before the CIT(A) was delayed by about 7 months. CIT(A) refused to condone the delay & further confirmed denial of FTC, holding that failure to file Form 67 in time was fatal.
Assessee’s Contentions
- The delay in filing appeal before CIT(A) was not deliberate. Initially, the Assessee believed the issue could be rectified u/s 154.
- The delay was attributable to Covid-19 disruptions, & hence condonable in light of the Supreme Court’s suo motu order in Writ Petition (Civil) No. 3 of 2020 (dated 10.01.2022), which extended limitation periods.
- On merits, FTC is a substantive right under sections 90 & 91 of the Income-tax Act & also under relevant DTAA provisions.
- Filing of Form 67 is procedural; delay in filing should not extinguish substantive relief.
- Relied on ITAT Bangalore ruling in Brinda Rama Krishna v. ITO (ITA No. 454/Bang/2021) where FTC was allowed despite belated filing of Form 67.
Revenue’s Contentions
- The appeal was time-barred; the Assessee did not show sufficient cause.
- Rule 128 of the Income-tax Rules mandates filing of Form 67, & non-compliance justifies denial of FTC.
Tribunal’s Observations
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