Foreign tax credit can be claimed even when Form 67 is filed belatedly: ITAT Bangalore
Foreign tax credit can be claimed even when Form 67 is filed belatedly: ITAT Bangalore
Ms. Brinda RamaKrishna vs ITO Bangalore (ITA. No. 454/Bang/2021)
Facts:
1. The Assesseee is an individual and during the previous year relevant to AY 2018-19 an ordinary resident in India. The Assesseee worked with Ernst & Young Australia from 20.11.2017 till 16.05.2019.
2. Since her global income was taxable in India, the Assessee offered to tax salary income earned for services rendered in Australia for the period from December 2017 to March 2018 to tax in India. The Assessee claimed foreign tax credit (“FTC”) for taxes paid in Australia.
3. The Assessee claimed FTC of Rs. 4,73,779/- u/s. 90 of the Act read with Article 24 of India Australia tax treaty (“DTAA”) in a revised return of income filed on 31.8.2018.
4. The Assessee had not filed the Form 67 before filing the return of income. On realising the same, the Assessee filed Form 67 in support of claim of foreign tax credit on 18.04.2020.
5. The revised return of income was processed by Centralized Processing Centre (CPC) electronically and intimation u/s 143(1) of the Act on 28.05.2020 was passed disallowing the claim of FTC.
6. After the Assessee filed the rectification, the AO upheld the action in the rectification order, on the ground that the Assessee has failed to furnish Form 67 on or before the due date of furnishing the return of income as prescribed u/s 139(1) of the Act which is mandatory according to Rule 128(9) of the Rules.
The ITAT held as below:
1. Rule 128(9) of the Rules does not provide for disallowance of FTC in case of delay in filing Form No.67.
2. Filing of Form No.67 is not mandatory but a directory requirement.
3. DTAA overrides the provisions of the Act and the Rules cannot be contrary to the Act.
4. So the Assessee can be allowed to claim FTC in the ITR.
