In ITA NO.302/MUM/2023- ITAT- Rule 128 requirement for Form 67 submission in Foreign Tax Credit claim deemed directory, not mandatory; ITAT (Mumbai) holds that assessee can file Form 67 before completion of the assessment
Member S. Rifaur Rahman (Accountant) [05-04-2023]


Read Order: Ganesh Anandrao Ingulkar v. Assistant Director of Income-tax


LE Correspondent


Mumbai, May 11, 2023: The Mumbai bench of the Income Tax Appellate Tribunal has allowed the claim of the assessee, holding that that assessee can file Form– 67 before completion of the assessment and the assessee was entitled to Foreign Tax Credit (FTC).


In the present case, the assessee had filed Form–67 at the time of filing revised return of income and not at the time of original return of income. The CIT(a) had upheld the order of the Assessing Officer (AO), noting that since the assessee had failed to file the return of income for A.Y. 2019-20 as well as Form 67 within the due date of filing of return of income, the claim of FTC had rightly been disallowed.


The Tribunal placed reliance on Sonakshi Sinha v. CIT [LQ/ITAT/2022/4056], wherein the Coordinate Bench has observed that one of the requirements of Rule128 for claiming FTC is that Form 67 is to be submitted by assessee before filing of the returns and that this requirement cannot be treated as mandatory, rather it is directory in nature. This is because, Rule 128(9) does not provide for disallowance of FTC in case of delay in filing Form No. 67. The bench further observed that it is well settled that while laying down a particular procedure, if no negative or adverse consequences are contemplated for non-adherence to such procedure, the relevant provision is normally not taken to be mandatory and is considered to be purely directory.



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