Filing Form 67 is directory; Delhi Tribunal directs verification of foreign tax credit claim under India-US DTAA

5-Second Takeaway

The Tribunal held that delayed filing of Form No. 67 was directory, not mandatory, and directed allowance of the foreign tax credit claim subject to verification. It also held that the assessee had not been given notice or a proper opportunity before the credit was denied, so the delay in Form No. 67 was condoned and the matter remitted for verification.

The assessee had filed her return under section 139(1) and claimed foreign tax credit under section 90 and the India-US DTAA, but Form No. 67 was not filed with the return or before processing under section 143(1). The credit was later denied in processing, and the assessee sought rectification under section 154 after filing the form belatedly.

The Tribunal noted that the jurisdictional assessing officer should have commenced verification of the foreign tax credit claim, but the record did not show that any such proceedings had been initiated. It also found that no notice had been issued before the credit was disallowed.

On that basis, the Tribunal held that filing Form No. 67 was directory in nature. The delay was condoned, and the foreign tax credit claim was directed to be considered on verification of the facts and documents in accordance with law.

The matter was remitted to the assessing officer to provide a proper opportunity of hearing and to pass a speaking order if the credit was still proposed to be denied.