RAVINDRA SATYANARAYANA ,PUNE V. DCIT, PUNE

ITA 2822/PUN/2025

AI Insights

The case involves Ravindra Satyanarayana, the appellant, who contested the denial of a Foreign Tax Credit (FTC) by the Income Tax Department for the Assessment Year 2019-20. The FTC was claimed under the Double Taxation Avoidance Agreement between India and the USA, for taxes paid on income earned from foreign sources. Initially, the FTC was denied because Form 67, required to claim the credit, was not filed by the due date. Despite filing the form later, the rectification application was rejected, leading to a significant delay in the appeal process. The Tribunal, referencing a precedent, directed the Assessing Officer to verify and potentially allow the FTC claim, emphasizing that procedural delays should not bar substantive tax reliefs.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 840408 (ITAT-PUNE)
• Duration Of Justice: 2 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-02-2026
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2019-2020
• Appeal Filed On: 26-11-2025
• Other Referred Cases: Muralikrishna Vaddi v. ACIT, Mr. Kedar Jagdish Mankar Vs. ACIT
• Laws Referred To: Income Tax Act, 1961, Double Taxation Avoidance Agreement between India and USA
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PRAMOD SHAHAKAR
• Assessee Lawyers: DEEPAK PADMANABHAN VIRTUAL; CATENA OF DECISIONS PRONOUNCED BY VARIOUS
• Keywords: Condonation of delay; Set aside; Opportunity of being heard; Reasonable cause; Principle of natural justice; TDS; Double taxation relief
• Section: 90; 139

Judgement Text

" आयकर अपीलीय अधिकरण “बी” न्यायपीठ पुणे में । IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, PUNE BEFORE SHRI MANISH BORAD, ACCOUNTANT MEMBER AND MS. ASTHA CHANDRA, JUDICIAL MEMBER आयकर अपील सं. / ITA No.2822/PUN/2025 धििाारण वर्ा / Assessment Year : 2019-20 Ravindra Satyanarayana, B 905 Gold Coast Society, Ivory Estates Baner Road S.O. Pune, Pune City-411008 PAN : AALPR6048N Vs. DCIT, Pune अपीलार्थी / Appellant प्रत्यर्थी / Respondent Assessee by : Shri Deepak Padmanabhan (Virtual) Department by : Shri Pramod Shahakar Date of hearing : 10-02-2026 Date of Pronouncement : 23-02-2026 आदेश / ORDER PER ASTHA CHANDRA, JM : The appeal filed by the assessee is directed against the order dated 13.10.2025 of the Ld. Additional/Joint Commissioner of Income Tax (Appeals)-2, Lucknow [“Addl./JCIT(A)”] pertaining to Assessment Year (“AY”) 2019-20. 2. Briefly stated, the facts of the case are that the assessee is an individual. For AY 2019-20, the assessee filed his return of income u/s 139 of the Income Tax Act, 1961 (the “Act”) on 31.08.2019. During AY 2019-20, the assessee earned income from Foreign sources viz. USA amounting to Rs.1,88,78,569/- on which a foreign tax of Rs.39,91,598/- was deducted. The assessee claimed the said amount of tax as Foreign Tax Credit (“FTC”) in his income tax return as per the provisions of Double Taxation Avoidance Agreement between India and USA (“India-USA DTAA”). The income tax return of the assessee was processed u/s 143(1) by the Ld. Central Processing Unit/Assessing Officer (“CPC/AO”) vide intimation order dated 09.02.2021 wherein the Ld. CPC/AO denied the claim of FTC as the assessee had not filed Form 67 along with the return. Printed from counselvise.com 2 ITA No.2822/PUN/2025, AY 2019-20 Subsequently, in order to claim FTC, the assessee filed Form 67 on 12.02.2021 and applied for rectification on 29.07.2022 which was rejected without giving FTC claimed by the assessee. Further, the assessee also submitted manual rectification to the Ld. AO requesting to grant FTC to the assessee, however, the said rectification application has not yet been disposed of. 3. Aggrieved, the assessee filed an appeal challenging the intimation order u/s 143(1) dated 09.02.2021 before the Ld. Addl./JCIT(A). The appeal before the Ld. Addl./JCIT(A) was filed with a delay of 1399 days owing to which the Ld. Addl./JCIT(A) dismissed the appeal as not maintainable. However, he proceeded to decide the issues on merits of the case and rejected the assessee’s grounds of appeal even on merits due to delay in filing of Form 67. The relevant observations and findings of the Ld. Addl./JCIT(A) is reproduced below : “7. Even on the merits of the case, as per Rule 128 of the Income Tax Rules, 1962, а resident taxpayer is eligible to claim credit for any foreign tax paid, in a country or specified territory outside India. The credit shall be allowed only if the assessee furnishes the required particulars in Form 67 within the specified timelines. resident taxpayer who has credit for the amount of any foreign tax paid in a country outside India by way of deduction or otherwise is required to furnish the statement in Form 67 on or before the due date specified for furnishing the return of income under sub-section (1) of Section 139 to claim credit of such taxes. Form 67 is also required to be furnished in case the carry backward of loss of the current year results in refund of foreign tax for which credit has been claimed in any earlier previous years. Form 67 can only be submitted through online mode. Rule 128 is reproduced hereunder for the sake of clarity: [Foreign Tax Credit. 128. (1) An assessee, being a resident shall be allowed a credit for the amount of any foreign tax paid by him in a country or specified territory outside India, by way of deduction or otherwise, in the year in which the income corresponding to such tax has been offered to tax or assessed to tax in India, in the manner and to the extent as specified in this rule: ............................. (8) Credit of any foreign tax shall be allowed on furnishing the following documents by the assessee, namely:- (i) a statement of income from the country or specified territory outside India offered for tax for the previous year and of foreign tax deducted or paid on such income in Form No. 67 and verified in the manner specified therein; ii. certificate or statement specifying the nature of income and the amount of tax deducted therefrom or paid by the assessee,- (a) from the tax authority of the country or specified territory outside (a) India; or (b) from the person responsible for deduction of such tax; or Printed from counselvise.com 3 ITA No.2822/PUN/2025, AY 2019-20 (c) signed by the assessee : Provided that the statement furnished by the assessee in clause (c) shall be valid if it is accompanied by,- (A) an acknowledgement of online payment or bank counter foil or challan for (A) payment of tax where the payment has been made by the assessee; (B) proof of deduction where the tax has been deducted. 58 [(9) The statement in Form No. 67 referred to in clause (i) of sub-rule (8) and the certificate or the statement referred to in clause (ii) of sub-rule (8) shall be furnished on or before the due date specified for furnishing the return of income under sub-section (1) of section 139, in the manner specified for furnishing such return of income. Sub-rule 9 is amended by the twenty-seventh amendment w.e.f. 01.04.2022 as under: [(9) The statement in Form No. 67 referred to in clause (i) of sub-rule (8) and the certificate or the statement referred to in clause (ii) of sub-rule (8) shall be furnished on or before the end of the assessment year relevant to the previous year in which the income referred to in sub-rule (1) has been offered to tax or assessed to tax in India and the return for such assessment year has been furnished within the time specified under sub-section (1) or sub- section (4) of section 139: Provided that where the return has been furnished under sub-section (8A) of section 139, the statement in Form No. 67 referred to in clause (i) of sub-rule (8) and the certificate or the statement referred to in clause (ii) of sub-rule (8) to the extent it relates to the income included in the updated return, shall be furnished on or before the date on which such return is furnished.] 7.1 The appellant has failed to furnish Form 67 on or before the due date of furnishing the return of income u/s 139(1) as required u/s 128(9) before the amendment w.e.f. 01.04.2022. He has even failed to file it before the end of assessment year 2019-20 i.e. by 31.03.2020 as required under the amended rule though the amendment is not effective for the assessment year under consideration. Therefore, FTC cannot be allowed to the appellant even on the merits. Reliance is place on Muralikrishna Vaddi v. ACIT (2022) 196 ITD 705 / 220 TTJ 1049/ 220 DTR 177 (Visakha)(Trib.) S. 90: Double taxation relief-Foreign tax credit (FTC)-Filling of statement in Form 67 on or before due date specified for furnishing return of income under section 139(1) is mandatory in nature and not directory-Statement in Form 67 after a delay of two years from due date of furnishing return of income-No valid reason-Justified in disallowing FTC claimed by assessee due to non- filing of Form 67 within time. [S. 139(1), Rule, 128(9), Form 67] Assessee, a salaried employee, claimed foreign tax credit (FTC) while filing return of income but had not filed Form 67 before due date of filing of return under section 139(1) as prescribed under rule 128(9). Assessee realized filing of Form 67 only after scrutiny proceedings were initiated by Assessing Officer and filed same with a delay of more than two years. Assessing Officer invoked provision of rule 128(9) and disallowed FTC. The Assessee contended that Form 67 was not filed by its tax consultant due to oversight and same was to be considered as technical mistake. Held that since assessee filed Form 67 after a delay of two years without any valid and reasonable cause, Assessing Officer was justified in disallowing FTC claimed by assessee. Filling of statement in Form 67 on or before due date specified for furnishing return of income under section 139(1) is mandatory in nature and not directory. (AY. 2018-19). Printed from counselvise.com 4 ITA No.2822/PUN/2025, AY 2019-20 Thus, appeal in neither admissible due to delay in filing the appeal nor maintainable on merits due to delay in filing Form 67. Therefore, the appeal is rejected. 8. In the result the appeal is rejected.” 4. Dissatisfied, the assessee is in appeal before the Tribunal raising the following grounds of appeal : “1. The learned Commissioner of Income Tax (Appeals) [\"Ld. CIT(A)\"] erred in rejecting the grounds of appeal and upholding the impugned assessment order. The order is bad in law and liable to be quashed on the following grounds: a) Lack of Jurisdiction. b) Erroneous assumption of jurisdiction. c) Failure to comply with the principles of natural justice. 2. The Ld. CIT(A) has erred in confirming the CPC order denying the credit of Foreign Tax of Rs.39,91,598 when such tax has been deducted and credit in respect of the same is allowable u/s 90/90A pursuant to the DTAA between India and USA. 3. The Ld. CIT(A) has erred in confirming CPC order without considering the fact that the form 67 has been filed by your appellant and delay in filing such form is not grounds for denying such credit. 4. The Ld. CIT(A) has erred in confirming the CPC order which is bad in law owing to non-compliance of Principles of natural Justice by not providing an opportunity of being heard before passing such order. 5. The Ld. CIT(A) has erred in dismissing the appeal filed without considering the fact that the rectification application filed by your appellant was not disposed of and appeal was filed owing to indecision of the Ld.AO during such proceedings. It is respectfully submitted that we may be permitted to add, delete and/or put forward any other grounds and fact of appeal and other related points at the time of hearing.” 5. The Ld. AR submitted that the impugned issue is squarely covered in favour of the assessee by catena of decisions pronounced by various judicial forums including the Pune Tribunal wherein the assessee’s claim of FTC has been allowed even when Form 67 has been filed belatedly. In the present case, admittedly, the assessee filed Form 67 on 12.02.2021 and the return of income had already been processed vide intimation order u/s 143(1) on 09.02.2021. He relied on the decision of the Pune Bench of the Tribunal in the case of Mr. Kedar Jagdish Mankar Vs. ACIT in ITA No. 1624/PUN/2024 for AY 2017-18, order dated 28.01.2025 wherein the Tribunal under the similar set of facts as that of the present assessee directed the Ld. AO/CPC to verify the claim of FTC made by the assessee Printed from counselvise.com 5 ITA No.2822/PUN/2025, AY 2019-20 and allow the same as per fact and law. He, therefore, urged that the matter may be set aside to the file of the Ld. AO/CPC to verify the assessee’s claim and allow the assessee’s claim of FTC. 6. The Ld. DR relied on the order of the Ld. Addl./JCIT(A). 7. We have heard the Ld. Representatives of the parties and perused the material on record and paper book filed by the Ld. AR on behalf of the assessee. Admittedly, the assessee failed to file Form 67 before due date of filing of return u/s 139(1) of the Act for the relevant AY 2019-20. The return was processed u/s 143(1) on 09.02.2021 and Form 67 was filed on 12.02.2021 after return was already processed u/s 143(1) of the Act. We have perused the decision of the Co-ordinate Bench of the Pune Tribunal in the case of Mr. Kedar Jagdish Mankar (supra) and find that the Tribunal under the similar set of facts as that of the assessee in the present case, has directed the Ld. AO to allow the assessee’s claim of FTC after due verification thereof. The relevant observations and findings of the Tribunal in the case of Mr. Kedar Jagdish Mankar (supra) are produced below : “7. We have heard the Ld. Representatives of the parties and perused the material on record, various judicial precedents cited by the Ld. AR and also the paper book containing pages 1 to 92 filed by the assessee. The facts are not in dispute. Admittedly, the assessee failed to file Form 67 before the due date of filing of return u/s 139(1) of the Act which was due to the filed on 05.08.2017 for the relevant AY 2017-18. The assessee filed Form 67 only on 23.08.2022. His return was already processed u/s 143(1) of the Act vide intimation order dated 30.03.2019. The rectification request of the assessee was rejected on 09.01.2023 disallowing the claim of FTC of Rs.2,56,130/-. Perusal of the order of the Ld. Addl./JCIT(A) reveals that he has disallowed the claim of FTC for the reason that the assessee has not filed Form 67 within the due date of filing of the original return and the amended Rule 128 vide Notification No. 100/2022, dated 18.08.2022 does not apply to the assessee’s case as the amendment is effective from 1st of April, 2022 so it applies to all the claims of FTC furnished during the FY 2022-23. He has also observed that the assessee did not file an application for condonation of delay in filing of Form 67 before the Jurisdictional PCIT and therefore CPC- AO rightly disallowed the FTC claim of the assessee. The Ld. Counsel for the assessee has submitted before us that filing of Form 67 is only procedural/directory requirement and is not a mandatory one. There are no conditions prescribed in the DTAA that the FTC can be disallowed for non- compliance of any procedural provisions and therefore the assessee cannot be denied the claim of FTC u/s 90 of the Act r.w. Article 23 of the DTAA between India and Germany. We find some force in the arguments of the Ld. AR that the claim of FTC cannot be disallowed for non-compliance of procedural requirement prescribed under the Rule. The Rule nowhere provides that if Form 67 is not filed within time relief sought by the assessee u/s 90 of the Act would be denied. Various Co-ordinate Benches including Pune Tribunal have held that filing of Form 67 is a procedural/directory requirement and is not a mandatory requirement. Thus, in our opinion, the view taken by the Ld. Addl./JCIT(A) needs reconsideration. We therefore direct the Ld. Addl./ JCIT(A) to verify the claim of FTC of Rs.2,56,130/- made Printed from counselvise.com 6 ITA No.2822/PUN/2025, AY 2019-20 by the assessee and allow the same as per the fact and law. We also direct the Ld. Addl./JCIT(A) to allow the TDS claim of Rs.1,86,089/- after due verification thereof in accordance with fact and law. We hold and direct accordingly. Accordingly, ground Nos. 1 to 9 raised by the assessee are allowed for statistical purposes. Ground No. 10 is consequential and ground No. 11 and 12 are general in nature.” 8. Considering the factual matrix of the case and following the decision of the Co-ordinate Bench of the Pune Tribunal in the case of Mr. Kedar Jagdish Mankar (supra), we direct the Ld. AO/CPC to verify the claim of FTC of Rs.39,91,598/- made by the assessee and allow the same in accordance with law after affording due opportunity of hearing to the assessee. We hold and direct accordingly. Accordingly, the effective grounds of appeal i.e. ground Nos. 3 and 4 raised by the assessee are allowed for statistical purposes. Since, we have allowed the appeal of the assessee on merits of the case, the remaining grounds i.e. ground Nos. 1, 4 and 5 need not be adjudicated and dismissed as such. 9. In the result, the appeal of the assessee is partly allowed for statistical purposes. Order pronounced in the open court on 23rd February, 2026. Sd/- Sd/- (Manish Borad) (Astha Chandra) ACCOUNTANT MEMBER JUDICIAL MEMBER पुणे / Pune; दिन ांक / Dated : 23rd February, 2026. रदि आदेश की प्रधिधलधप अग्रेधर्ि / Copy of the Order forwarded to : 1. अपील र्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The Pr. CIT concerned. 4. दिभ गीय प्रदिदनदि, आयकर अपीलीय अदिकरण, “बी” बेंच, पुणे / DR, ITAT, “B” Bench, Pune. 5. ग र्ड फ़ इल / Guard File. //सत्य दपि प्रदि// True Copy// आिेश नुस र / BY ORDER, सहायक पंजीकार/ Assistant Registrar आयकर अपीलीय अदिकरण ,पुणे / ITAT, Pune Printed from counselvise.com "