2025 (3) TMI 1164 - AT - Income Tax

Denial of Foreign Tax Credit (FTC) - Form No.67 which was required to be filed in support of the claim of FTC was filed beyond the due date of filing the return of income - HELD THAT - The issue under consideration is no longer res integra and we considering the decision in the case of Ashish Agrawal 2023 (10) TMI 86 - ITAT HYDERABAD who is another employee of the very same company of which the assessee is employee i.e. Emerson Electric Company (India) Private Limited and the Tribunal held that filing of Form No.67 is only directory since Double Taxation Avoidance Agreement overrides the Act and Rules and therefore if the assessee has paid the taxes abroad and is duly supported by evidence then the claim of the assessee needs to be allowed. Claim of FTC by the assessee is denied only for delay in filing of Form No.67 and no discrepancy has been noticed in the contents of Form No.67 and therefore considering that Form No.67 is directory is nature we direct the AO to accept the claim of the assessee made through Form No.67 - Appeal of the assessee is allowed.

Summary

The Appellate Tribunal ITAT Pune, consisting of Dr. Manish Borad and Shri S.S. Viswanethra Ravi, adjudicated an appeal concerning the denial of Foreign Tax Credit (FTC) for the assessment year 2021-22. The appeal challenged the order by Addl/JCIT(A), Jodhpur, which arose from an intimation order under section 143(1)(a) of the Income Tax Act, 1961. The primary issue was the denial of FTC amounting to Rs. 2,31,471/- due to the late filing of Form No.67, which supports FTC claims.The Tribunal noted that the requirement to file Form No.67 is "merely directory in nature and not mandatory," citing consistent rulings from Coordinate Benches and the Tribunal itself. The Tribunal referenced the case of Ashish Agrawal Vs. ITO, where it was held that the Double Taxation Avoidance Agreement overrides the Act and Rules, thereby supporting the allowance of FTC if taxes are paid abroad and supported by evidence.The Tribunal concluded that the denial of FTC was solely due to the delay in filing Form No.67, with no discrepancies in its content. Thus, it directed the Assessing Officer to accept the FTC claim after necessary verification. Consequently, the appeal was allowed, with the Tribunal's decision pronounced on March 21, 2025.