LI Network
Published on: November 18, 2023 at 18:23 IST
The Madras High Court has ruled that filing Form-67 after submitting the Income Tax Return (ITR) but before the issuance of an intimation is considered due delegance.
Justice Krishnan Ramasamy’s bench allowed the Foreign Tax Credit (FTC) claim, emphasizing that the filing of Form-67, as per Rule 128, is only directory and not mandatory.
The petitioner, employed in Kenya as CEO from 2016 to 2018, filed an Indian ITR for the financial year 2018-2019, claiming FTC under Section 90/91 of the Income Tax Act, 1961.
The petitioner, a resident of India during that year, had income from both Kenya and India. However, the Form-67, required for claiming FTC, was inadvertently not uploaded along with the Indian ITR.
The petitioner rectified the omission by uploading Form-67 on February 2, 2021, after the ITR was processed by the Centralized Processing Centre (CPC) on March 26, 2021.
Despite the delay, the court held that the filing was within due time. The CPC failed to give effect to the FTC, leading the petitioner to request rectification, which was rejected. The court observed that the department’s rejection of FTC was improper and not in accordance with the law.
The court asserted that Rule 128 is directory, not mandatory, and the department must have provided due credit to the petitioner for the FTC. The decision sets a precedent, clarifying the compliance timeline for Form-67 in the context of FTC claims.
Case Title: Duraiswamy Kumaraswamy Versus PCIT
