ITO, NCC-1, MADURAI V. CHATHADI KRISHNAN PARVATHI, MADURAI

MA 183/CHNY/2025

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The case involves the Deputy Commissioner of Income Tax, Madurai, as the appellant, and Ms. Chathadi Krishnan Parvathi, as the respondent, concerning the assessment year 2019-20. The core issue was the entitlement of the assessee to a Foreign Tax Credit (FTC) for taxes paid on dividend income earned in the USA, which was initially denied due to the non-filing of Form 67 within the prescribed due date. The Tribunal's earlier decision favored the assessee based on precedents that deemed the filing of Form 67 as directory. However, the Revenue filed a miscellaneous application seeking recall of the order, arguing that the veracity of the tax payment and the non-compliance with the procedural requirement of filing Form 67 within the due date were not adequately addressed. The Tribunal, upon reviewing the application, decided to restore the matter to the AO for verification of the tax payment and compliance with procedural requirements.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 826268 (ITAT-CHENNAI)
• Duration Of Justice: 1 month(s) 7 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 09-01-2026
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2019-2020
• Appeal Filed On: 02-12-2025
• Other Referred Cases: Duraiswamy Kumaraswamy vs. PCIT [2024] 460 ITR 615 (Madras), Brinda Ramakrishna vs ITO (ITA No.454/Bang/2021 dated 17.11.2021), Smt. Chengam Durga vs. ITO
• Laws Referred To: Income Tax Act, 1961, Income Tax Rules, 1962
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 154; 90

Judgement Text

"आयकर अपीलीय अिधकरण, ‘ए’ ᭠यायपीठ,चे᳖ई IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH, CHENNAI Įी जॉज[ जॉज[ क े, उपाÚय¢ एवं Įी एस.आर.रघुनाथा, लेखा सदèय क े सम¢ BEFORE SHRI GEORGE GEORGE K, VICE PRESIDENTAND SHRI S.R. RAGHUNATHA, ACCOUNTANT MEMBER िविवधया िचकासं/ M.A. No. 183/CHNY/2025 (arising in I.T.A. No.932/CHNY/2025) िनधाᭅरण वषᭅ/Assessment Year:2019-20 The Deputy Commissioner of Income Tax, Non-Corporate Circle – 1, Madurai vs. Ms. Chathadi Krishnan Parvathi, Flat No.9, Block-B, Swagath Residency, 708-A, 17th Cross Street, Anna Nagar, Madurai – 625 020. PAN: CLYPP 0358P (अपीलाथᱮ/Applicant) (ᮧ᭜यथᱮ/Respondent) अपीलाथᱮकᳱओरसे /Applicant by : Shri S. Praveen, JCIT ᮧ᭜यथᱮकᳱओरसे/Respondent by : None सुनवाई कᳱ तारीख/Date of hearing : 09.01.2026 घोषणा कᳱ तारीख /Date of Pronouncement : 09.01.2026 आदेश /O R D E R PER GEORGE GEORGE K, VICE PRESIDENT: This Miscellaneous Application filed by the Revenue u/s.254(2) of the Income Tax Act, 1961, is seeking to recall the order of the Tribunal in ITA No.932/CHNY/2025, dated 18.06.2025. Printed from counselvise.com 2 M.A No.183/CHNY/2025 2. The Tribunal vide order dated 18.06.2025 decided the issue in favour of assessee directing the AO to grant Foreign Tax Credit (FTC) of Rs.1,45,891/-. The relevant finding of the Tribunal reads as follows:- 8. We have heard rival submissions and perused the material on record. The solitary issue for our consideration is whether the assessee is entitled to FTC amounting to Rs.1,45,891/- on the tax paid for the dividend income earned in USA. The reason for denying the benefit of FTC was that assessee did not file Form 67 within the due date prescribed u/s.139(1) of the Act. Admittedly, the assessee had filed the return of income within the due date prescribed u/s.139(1) of the Act. However, by inadvertent omission did not enclose Form 67 along with the return of income for claiming FTC. On realizing the mistake committed, the assessee filed Form 67 on 10.03.2021 (intimation issued u/s.143(1) of the Act dated 12.02.2021). The Chennai Bench of the Tribunal in the case of Smt. Chengam Durga, supra on identical facts by following the judgment of the Hon’ble Jurisdictional High Court in the case of Duraiswamy Kumaraswamy vs. PCIT [2024] 460 ITR 615 (Madras) decided the issue in favour of the assessee. The relevant finding of the Chennai Bench of Tribunal reads as follows:- “2. The assessee filed return of income on 09.09.2021 and claimed relief u/s 90 for Rs.1.51 Lacs. The return was processed by CPC u/s 143(1) on 05.07.2022 wherein this credit was denied since the assessee did not file applicable Form No.67 to claim the said relief. The assessee filed Form No.67 along with rectification application u/s 154 on 18.07.2022 in respect of her claim. However, CPC again denied the same in an intimation issued u/s 154. Upon further appeal, Ld. CIT(A), relying on the decision of Bangalore Tribunal in the case of Brinda Ramakrishna vs ITO (ITA No.454/Bang/2021 dated 17.11.2021), directed Ld. AO to grant the credit as per Form No.67. Aggrieved, the revenue is in further appeal before us. 3. We find that this issue is squarely covered by the cited decision of Bangalore Tribunal. Recently, Hon’ble High Court of Madras in the case of Duraiswamy Kumaraswamy (WP No.5834 of 2022 & ors. Printed from counselvise.com 3 M.A No.183/CHNY/2025 order dated 06.10.2023) held that filing of aforesaid form in terms of Rule 128 is only directory in nature. The rule is only for the implementation of the provisions of the act and it will always be directory in nature. Respectfully following the same, we dismiss the appeal.” 9. In light of the aforesaid order of the Tribunal which had followed the judgment of the Hon’ble Jurisdictional High Court, we hold that filing of Form 67 under Rule 128 of the Income Tax Rules, 1962 is directory in nature and not mandatory. Hence, we direct the AO to grant Foreign Tax Credit amounting to Rs.1,45,891/-. It is ordered accordingly.” 3. The Department has filed the Miscellaneous Application seeking recall of the above order. The prayer in the Miscellaneous Application reads as follows:- “(3). It is submitted before Hon'ble ITAT that the assessee has not filed the Form 67 within the due date prescribed in Rule 128 of the Income Tax Rules, 1962 ('IT Rules,) which is 31/08/2019. Further, the veracity of the assessee's claim regarding payment of taxes to the tune of Rs.1,45,891/- in USA stands unexamined, since the assessing officer was not offered an opportunity to examine the tax payment challans in USA. Hence, it is submitted that the decision of the ITAT to allow the appeal of the assessee, without examining the veracity of the tax payment challan in USA, is a mistake apparent from record. Hence, it is prayed that the Hon'ble ITAT may be pleased to recall the order dated 30/06/2025 passed in ITA No. 932/Chny/2025 for AY.2019-20 and the case may be remitted to the AO for the purpose of verification of the tax payment challan, thus verifying assessee’s eligibility to claim relief u/s 90 of the IT Act, 196l. 4. None is present on behalf of the assessee. Printed from counselvise.com 4 M.A No.183/CHNY/2025 5. After hearing the Ld.DR and perusing the material on record, we hold that payment of tax to the tune of Rs.1,45,891/- in USA needs verification since the AO has not examined the issue as he was of the view that Form 67 not being filed within the due date prescribed under Rule 128 of the Income Tax Rules, 1962, the assessee is not entitled to the benefit of Foreign Tax Credit. Since the claim regarding the payment of taxes to the tune of Rs.1,45,891/- in USA stands unexamined, we deem it appropriate to restore the matter to the files of the AO. The AO is directed to examine the Form 67 and take a decision in accordance with law. It is ordered accordingly. As a result, Para 9 & 10 of the impugned order of the Tribunal in ITA No.932/CHNY/2025 dated 18.06.2025 is replaced by the following paras:- “9. In light of the aforesaid order of the Tribunal which had followed the judgment of the Hon’ble Jurisdictional High Court, we hold that filing of Form 67 under Rule 128 of the Income Tax Rules, 1962 is directory in nature and not mandatory. Hence, we direct the AO to examine the Foreign Tax Credit amounting to Rs.1,45,891/- and take a decision in accordance with law. It is ordered accordingly. 10. In the result, the appeal filed by the assessee is allowed for statistical purposes.” Printed from counselvise.com 5 M.A No.183/CHNY/2025 6. The Miscellaneous Application filed by the Revenue is disposed off, in light of the above modification. 7. In the result, the miscellaneous application filed by the Revenue is allowed. Order pronounced in the open court on 9th January, 2026 at Chennai. Sd/- Sd/- (एस.आर. रघुनाथा) (S.R. RAGHUNATHA) लेखा सदèय/ACCOUNTANT MEMBER (जॉज[ जॉज[ क े) (GEORGE GEORGE K) उपाÚय¢ /VICE PRESIDENT चे᳖ई/Chennai, ᳰदनांक/Dated, the 9th January, 2026 RSR आदेश कᳱ ᮧितिलिप अᮕेिषत/Copy to: 1. अपीलाथᱮ/Applicant 2. ᮧ᭜यथᱮ/Respondent 3. आयकर आयुᲦ /CIT, Madurai 4. िवभागीय ᮧितिनिध/DR 5. गाडᭅ फाईल/GF. Printed from counselvise.com "