Paid ₹4.53 lakh tax in Belgium but missed Form 67 in India? ITAT gives taxpayer another chance to claim credit

A taxpayer who had already disclosed his Belgium salary in India and paid tax on it overseas was denied foreign tax credit because he had not filed Form 67 with his return. The dispute then became more complicated when his appeal was filed nearly five years late. The Income Tax Appellate Tribunal (ITAT), Bangalore, has now allowed him another opportunity to establish his claim.

The ruling is important not simply because of the foreign tax credit (FTC), but because the tribunal addressed two separate procedural lapses and held that neither should prevent the taxpayer's claim from being examined on merits.

The ruling was delivered on 17 August 2026 in Abhishek Narayan v. ITO, Ward International Taxation 1(2), Bangalore, ITA No. 1643/Bang/2026.

The case concerns Abhishek Narayan, who earned salary both in India and Belgium during assessment year 2019-20. His total income declared in India was ₹ 19.20 lakh, including ₹ 14.43 lakh earned from his work in Belgium.

He had already paid ₹ 4.54 lakh in tax in Belgium on that foreign salary. Since the same income was also offered to tax in India, he claimed ₹ 3,00,783 as foreign tax credit under section 90 of the Income Tax Act.

However, he had not filed Form 67, the prescribed statement for claiming foreign tax credit. As a result, when the Centralised Processing Centre processed his return under section 143(1), it disallowed the ₹ 3 lakh FTC claim.

Form 67 is the Income Tax Department's prescribed form for reporting foreign income and the foreign taxes paid on it for the purpose of claiming FTC.

The taxpayer subsequently filed Form 67 and pursued rectification under section 154. But the dispute did not end there.

The taxpayer initially did not file an appeal against the tax department's action. According to the ITAT order, he consulted a chartered accountant during the Covid period and was advised to pursue rectification instead.

He later discovered that the rectification application had itself been disposed of by the CPC. It was only after receiving a demand recovery notice on 12 November 2025 that he obtained fresh professional advice and filed an appeal before the CIT(A).

By then, there was a 1,687-day delay in filing the appeal. The CIT(A) refused to condone the delay and dismissed the appeal without examining whether the taxpayer was actually entitled to the FTC.

The tribunal said the length of the delay could not, by itself, determine whether it should be condoned. It examined whether the taxpayer's explanation was bona fide and whether there was deliberate inaction or gross negligence.

It noted that the taxpayer had not remained completely inactive after the original tax adjustment. He had pursued rectification based on professional advice. The tribunal therefore concluded that sufficient cause existed and condoned the 1,687-day delay.

The more important question was whether the taxpayer could lose the treaty-based tax credit merely because Form 67 was not filed on time.