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.

How the tax dispute started

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.

Why the case reached the tribunal after 1,687 days

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 taxpayer then approached the Bangalore ITAT.

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.

ITAT says Form 67 lapse should not automatically wipe out FTC claim

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

The tribunal noted that, as an Indian resident, the taxpayer was entitled to claim foreign tax credit under section 90 read with Article 23(2)(a) of the India-Belgium DTAA for tax paid in Belgium on income that was also taxed in India. The credit, however, remains subject to the applicable limit, including the maximum Indian tax attributable to the doubly taxed income.

The tribunal also referred to earlier ITAT decisions, including Brinda Ramkrishna v. ITO, and held that Form 67 serves a procedural purpose of facilitating verification of the FTC claim. According to the tribunal, a substantive FTC benefit should not automatically be denied merely because of a procedural lapse, particularly when the taxpayer subsequently furnishes the relevant documents and evidence.

However, this does not mean that the ITAT declared Form 67 unnecessary.

Taxpayer has not received the ₹3 lakh credit yet

Importantly, the ITAT did not itself grant the ₹3,00,783 foreign tax credit.

Instead, it set aside the CIT(A)’s order and sent the matter back to the Assessing Officer. The AO has been directed to verify the taxpayer’s Form 67, Belgian tax return and other supporting documents and then determine the appropriate FTC under the India-Belgium DTAA and section 90.

For taxpayers earning abroad, the practical lesson is therefore narrower than simply saying that Form 67 can be skipped. A genuine FTC claim may survive a procedural lapse, but the taxpayer still needs to substantiate the foreign income, tax paid and eligibility for credit. Filing Form 67 correctly and within the prescribed timeline remains the safer route rather than relying on litigation to cure the omission.