Belated Form No. 67 filing does not defeat foreign tax credit where treaty entitlement is otherwise available.

Belated filing of Form No. 67 for foreign tax credit under Rule 128 is treated as a procedural irregularity and not a bar to substantive relief where the underlying treaty entitlement is otherwise available under Section 90 read with the relevant tax treaty. The Tribunal preferred the view that the form-filing requirement, though couched in mandatory language, should not extinguish the resident assessee's right to foreign tax credit merely because the form was filed after the due date under Section 139(1). The assessee was therefore entitled to the foreign tax credit and consequential refund.

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Issues: Whether delay in furnishing Form No. 67 for claiming foreign tax credit under Rule 128 of the Income-tax Rules, 1962 disentitles the assessee from relief and refund.

Analysis: The claim for foreign tax credit was made under Section 90 of the Income-tax Act, 1961 read with Article 23(2) of the India-Sri Lanka Tax Treaty. Rule 128(9) requires Form No. 67 to be furnished on or before the due date under Section 139(1) and uses the expression "shall". The Tribunal noted the conflicting views taken in earlier coordinate bench decisions and preferred the line of authority treating belated filing of Form No. 67 as a procedural lapse rather than a condition extinguishing the underlying entitlement. The Tribunal applied the principle that procedural requirements should not defeat a substantive tax relief where the treaty benefit is otherwise available.

Conclusion: The delay in filing Form No. 67 did not bar the assessee's claim for foreign tax credit, and the assessee was entitled to the relief and consequential refund.

Ratio Decidendi: A belated Form No. 67 is a procedural irregularity that does not, by itself, defeat a resident assessee's substantive entitlement to foreign tax credit under Section 90 where the treaty benefit is otherwise admissible.

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