Slight Delay in Filing Form 67 Cannot Take Away DTAA Benefit: ITAT Grants Relief to Microsoft Employee for Salary Received in US

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has ruled that a slight delay in filing Form 67 cannot be a ground for denying the benefit of a Double Taxation Avoidance Agreement (DTAA). The tribunal granted relief to an employee of Microsoft who had received a salary in the US and had paid taxes there. The employee sought to claim a Foreign Tax Credit (FTC) in India to avoid double taxation but had filed the mandatory Form 67 with a minor delay. The ITAT held that the filing of Form 67 is a procedural requirement, and as long as it is filed before the completion of the assessment, a minor delay should not lead to the denial of the substantive benefit of the FTC. This taxpayer-friendly ruling emphasizes that procedural timelines should not override the fundamental right to claim DTAA benefits.