RAJESH VENKATESH HELAVAR,BENGALURU, KARNATAKA V. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-2(1)(1), BENGALURU

ITA 866/BANG/2025

AI Insights

The case revolves around the denial of Foreign Tax Credit (FTC) to the assessee, Shri Rajesh Venkatesh Helavar, for the assessment year 2019-20. The Central Processing Centre (CPC) initially denied the FTC because Form 67, required for claiming the credit, was filed late. The assessee's subsequent appeal to the CIT(A) was dismissed due to a delay of about seven months, which the CIT(A) found lacked sufficient cause. The assessee argued that the delay was not deliberate and was influenced by the COVID-19 pandemic, and that the substantive right to FTC should not be extinguished by procedural lapses. The Tribunal agreed with the assessee, emphasizing that the right to FTC is substantive and procedural requirements like the timely filing of Form 67 should not defeat this right.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 777091 (ITAT-BANGALORE)
• Duration Of Justice: 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-09-2025
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2019-2020
• Appeal Filed On: 12-04-2025
• Other Referred Cases: Brinda Rama Krishna v. ITO in ITA No. 454/Bang/2021
• Laws Referred To: Income Tax Act
• Court: TRIBUNAL
• Department Lawyers: REVENUE; GANESH R GHALE; STANDING
• Assessee Lawyers: KIRATH SINGH
• Keywords: Procedural lapse
• Section: 154; 90

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL ‘SMC’ BENCH, BANGALORE BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI KESHAV DUBEY, JUDICIAL MEMBER ITA No.866/Bang/2025 Assessment Year: 2019-20 Shri Rajesh Venkatesh Helavar, MC 802, Golden Grand Apartments, Tumkur Road, Yeshwanthpur, Bengaluru – 560 022. PAN – ACRPH 6415 R Vs. The Dy. Commissioner of Income Tax, Circle – 2(1)(1), Bengaluru. APPELLANT RESPONDENT Assessee by : Shri Kirath Singh, Advocate Revenue by : Shri Ganesh R Ghale, Advocate – Standing Counsel for Revenue Date of hearing : 26.06.2025 Date of Pronouncement : 16.09.2025 O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: This is an appeal filed by the assessee against the order passed by the NFAC, Delhi vide order dated 15/02/2025 in DIN No. ITBA/NFAC/S/250/2024-25/1073317579(1) for the assessment year 2019-20. 2. The assessee is a resident taxpayer. The return of income was processed u/s 143(1) of the Act. The assessee had claimed foreign tax Printed from counselvise.com ITA No.866/Bang/2025 Page 2 of 4 . credit (FTC) in respect of tax paid abroad. The CPC denied the credit because Form 67 was filed late. 3. The assessee filed appeal before the learned CIT(A). The appeal was filed with a delay of about 7 months. The learned CIT(A) dismissed the appeal holding that sufficient cause for delay was not shown, and also confirmed denial of FTC on account of belated Form 67. 4. Being aggrieved by the order of the learned CIT(A), the assessee is in appeal before us. 5. The learned AR before us argued that the delay was not deliberate. The assessee first believed that rectification u/s 154 would cure the issue. The learned AR further submitted that the delay in filing the appeal before the learned CIT(A) is attributable to Covid and therefore the same should be condoned based on the judgment of the Hon’ble Supreme Court in Suo Motu Writ Petition (Civil) No. 3 of 2020 dated 10 January 2022. 6. On merits, the assessee has paid foreign taxes and offered the corresponding income in India. Credit cannot be denied merely because Form 67 was filed late. Rule 128 requires Form 67, but filing it within time is directory and not mandatory. Sections 90 and 91 grant a substantive right. Procedural lapses should not take away that right. 7. On the other hand, the learned DR submitted that the appeal was time-barred. The assessee did not show sufficient cause. On merits, the Printed from counselvise.com ITA No.866/Bang/2025 Page 3 of 4 . DR argued that Rule 128 is clear that Form 67 has to be filed. Since the assessee did not comply, denial of FTC was justified. 8. We have heard the rival submissions of both parties and perused the material available on record. Regarding the delay, we note that the appeal before the learned CIT(A) was delayed by about 7 months. Admittedly, the delay is attributable to Covid. We are of the view that the same is to be condoned in view of the judgment of the Hon’ble Supreme Court cited above. Hence, we condone the delay and proceed to adjudicate the issue on merits. 8.1 On merits of the case, we note that sections 90 and 91 of the Act confer a substantive right to claim FTC where income is doubly taxed. Rule 128 prescribes the procedure including filing of Form 67. However, neither the section nor the rule provides that failure to file Form 67 within time would extinguish the claim. The ITAT Bangalore in Brinda Rama Krishna v. ITO in ITA No. 454/Bang/2021 has also held that FTC cannot be denied only for delay in filing Form 67. 8.2 In the present case, the fact that the assessee paid foreign tax and offered the income in India is not disputed. Denying FTC would lead to double taxation, which is contrary to the purpose of sections 90 and 91 and the Double Tax Avoidance Agreements. Accordingly, we hold that the assessee is entitled to FTC. The delay in filing Form 67 is only procedural. It does not defeat the claim. Hence, on merits, the assessee is entitled to FTC. The AO is directed to grant credit of foreign taxes paid, after verification, in accordance with section 90/91 read with Rule Printed from counselvise.com ITA No.866/Bang/2025 Page 4 of 4 . 128 of the Income Tax Rules. Hence the ground of appeal of the assessee is allowed in terms of the above direction. 9. In the result, the appeal of the assessee is allowed. Order pronounced in court on 16th day of September, 2025 Sd/- Sd/- (KESHAV DUBEY) (WASEEM AHMED) Judicial Member Accountant Member Bangalore Dated, 16th September, 2025 / vms / Copy to: 1. The Applicant 2. The Respondent 3. The CIT 4. The CIT(A) 5. The DR, ITAT, Bangalore. 6. Guard file By order Asst. Registrar, ITAT, Bangalore Printed from counselvise.com "