Rejection of Foreign Tax Credit unjustified as Form-67 filed before passing of final assessment order

Facts- The petitioner was employed in Kenya. For F.Y. 2018-2019, the petitioner was a resident of India, including his Kenya income, he has filed his Indian Income Tax return, and claimed the benefit of Foreign Tax Credit (FTC) u/s. 90/91 of the Income Tax Act, 1961, read with Article 24 of the India-Kenya Double Taxation Avoidance Agreement.

The petitioner submitted that while filing the Indian ITR, Form-67 prescribed under Rule 128 of the Income Tax Rules, 1962, for claiming FTC was inadvertently not uploaded along with the Indian ITR. On 02.02.2021, the petitioner uploaded the said Form – 67 along with the TDC certificate. On 26.03.2021, the income tax return was subsequently processed by the Centralized Processing Centre (CPC), Bangalore, u/s. 143(1) of the Act for which the petitioner received the intimation through e-mail. However, the FTC was not given effect to.

The petitioner had approached the 1st respondent u/s. 264 of the Act. On 25.01.2022, the respondent passed the impugned order u/s. 264 of the Act rejecting the FTC claim, wherein it was held that filing of Form-67 along with the return of income u/s. 139(1) was statutory obligation which was not complied with and further, a revised return was not filed and hence FTC could not be granted.