American expatriate Asha Patel, a resident of Mumbai with a U.S. tax residency, was hit with a Rs 30 lakh demand by India’s Income Tax Department after her 2020 tax return claimed a foreign tax credit without filing the mandatory Form 67.
The omission triggered a refusal of her credit claim, prompting her to file a rectification under Section 154 and submit Form 67 on 8 February 2023—three months past the deadline. Both her appeal to the jurisdictional Assessing Officer and the Commissioner of Appeals were rejected.
In a ruling on 14 September 2026, the Delhi ITAT held that filing Form 67 is directory, not mandatory, citing the Delhi High Court’s decision in Real Time Data Services v. PCIT. The tribunal noted that no notice under Section 139(8) was issued before the original denial and that the department failed to verify her credit claim.
"The Indian‑U.S. treaty allows credit for taxes paid abroad, but the taxpayer must file Form 67 to prove it," said Karanjot Singh Khurana, partner at DMD Advocates. Patel, who has two children studying in Pune, expressed relief at the ruling, saying the reversal will ease her family’s financial strain.
The ITAT directed the Assessing Officer to conduct the necessary verification and issue a speaking order if the credit cannot be granted. The department has until 30 September 2026 to comply, or Patel may seek further appeal to the High Court.