Non-filing of Form 67 along with return, at best can be treated as a technical violation and on that basis, the disallowance could not be made – ITAT
In a recent judgment, ITAT Bangalore has held that the non-filing of Form 67 along with the return, at the best can be treated as a technical violation and on that basis, the disallowance could not be made.
ABCAUS Case Law Citation:
4788 (2025) (10) abcaus.in ITAT
In the instant case, the assessee had challenged the order passed by the CIT(A) in not accepting the claim Foreign Tax paid since Form 67 was filed after the due date prescribed for filing the returns.
The assessee during the A.Y. 2021-22, filed his return of income which was processed by the CPC u/s. 143(1) and an intimation was sent in which the CPC had disallowed the tax paid in the foreign countries.
At the time of filing the return, the assessee had not enclosed the Form 67 to claim the tax paid in foreign countries. Thereafter, the Form 67 was filed and a rectification request was made which was rejected.
Before the Tribunal, the assessee contended that he had paid the tax in other country and therefore as per the DTAA, the assessee was entitled for relief u/s. 90 r.w. Rule 128 of the Rules. Admittedly, the assessee had claimed the said payment while filing the return of income but not filed the required Form 67 along with the return but later on filed the said form.
Therefore it was submitted that the assessee was entitled for claiming the said tax paid in the foreign country and he also relied on several orders of this Tribunal in which the belated filing of Form 67 was accepted and the benefit has been granted to the assessees.
The Tribunal noted that admittedly, the assessee had paid tax on the income in foreign countries for which the assessee had also furnished the Form no. 67 and therefore as per the DTAA, the tax paid on the income earned in the foreign country could not be again subjected to tax under the provisions of the Act. The only requirement to be done by the assessee is that the necessary claims should be made in Form 67.
The Tribunal further observed that the assessee had filed his return of income in time and also claimed in the tax paid on the income earned in the foreign country but the necessary Form 67 was not filed along with the return of income. Therefore the CPC had disallowed the said claim. The CIT(A) also relied on the provisions and the CBDT circular and confirmed the said disallowance.
The Tribunal opined that non-filing of Form 67 along with the return, at the best can be treated as a technical violation and on that basis, the disallowance could not be made. The CIT(A)’s finding that the authorities had no express powers vested them to condone the delay in filing Form 67 was also not correct.
The Tribunal noted that the above view had been taken by the Coordinate Bench of the Tribunal in a number of cases and therefore that assessee was entitled for deduction on the foreign tax remittance based on the Form no. 67 filed.
Accordingly, the Tribunal remitted the issue to the file of the AO with direction to verify the Form 67 and if found correct, grant the relief of foreign tax credit to the assessee.
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