Foreign tax credit cannot be denied for late Form No. 67 filing where the substantive entitlement remains intact.

Foreign tax credit could not be denied merely because Form No. 67 was filed after the due date for the return. Rule 128(9) of the Income-tax Rules, 1962 was treated as a procedural requirement governing the manner and timing of filing, not as a provision creating forfeiture for delay. The substantive entitlement to foreign tax credit was held to arise under Section 90 of the Income-tax Act, 1961 and the relevant treaty provisions, so delayed filing was not fatal. The credit was therefore to be allowed after verification, and the disallowance was not sustained.

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Issues: Whether foreign tax credit can be denied merely because Form No. 67 was furnished after the due date prescribed for filing the return of income.

Analysis: The Tribunal followed its earlier view that Rule 128(9) of the Income-tax Rules, 1962 prescribes the manner and timing for furnishing Form No. 67, but does not create a consequence of forfeiture of foreign tax credit for delayed filing. The right to foreign tax credit flows from the substantive scheme under Section 90 of the Income-tax Act, 1961 and the applicable treaty provisions, while the rule operates as a procedural requirement. On that basis, late filing of Form No. 67 was held not to be fatal to the claim, and the credit was directed to be granted after verification.

Conclusion: The assessee was entitled to foreign tax credit despite delayed filing of Form No. 67, and the disallowance was not sustained.

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