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Rule 128(9) not provide for disallowance of FTC in case of delay in form 67 filing

Case Law Details

TaxGuru Citation
2024 taxguru.in 3244
Case Name
Rameshwar Prasad Shrivastava Vs ITO (ITAT Delhi)
Date of Judgement/Order
Only available for paid members
Related Assessment Year
2020-21
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Rameshwar Prasad Shrivastava Vs ITO (ITAT Delhi)

In the case of Rameshwar Prasad Shrivastava vs. ITO (Income Tax Appellate Tribunal, Delhi), the central issue revolved around the disallowance of foreign tax credit (FTC) by the Centralized Processing Centre (CPC) due to the assessee’s failure to file Form 67 along with the income tax return (ITR) within the prescribed time. This appeal for the Assessment Year 2020-21 challenged the order of the ld. CIT(A) at the National Faceless Appeal Centre, Delhi, dated 27th April 2023, which upheld the disallowance.

Factual Background:

The assessee, in this case, had filed the income tax return declaring a total income of Rs. 42,25,040/-. However, the CPC disallowed the claim of FTC amounting to Rs. 28,02,692/- on the grounds that Form 67, necessary for claiming FTC against salary income earned in Japan, was not filed along with the ITR within the due date. The CPC’s decision was later upheld by the CIT(A), leading to the present appeal before the ITAT.

Grounds of Appeal:

The assessee contested the disallowance on several grounds:

  1. The belated filing of Form 67 on 05/03/2022, during the pendency of the appeal, should have been considered by the CIT(A).
  2. Procedural non-compliance (delay in filing Form 67) should not extinguish the substantive right of claiming FTC.
  3. The Double Tax Avoidance Agreement (DTAA) between India and Japan provides specific provisions for claiming FTC, which should prevail over procedural rules.
  4. Various judicial precedents were cited where similar issues were decided in favor of the assessee, emphasizing that procedural lapses should not invalidate substantive rights under DTAA provisions.

Legal Arguments:

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Author Info

CA Sandeep Kanoi
Qualification: CA in Job / Business
Company: Taxguru Consultancy
Location: Mumbai, Maharashtra
Articles Published: 21,096

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