Foreign tax credit claim survives late Form 67 filing where substantive entitlement under section 90 remains intact.

Delay in filing Form No. 67 did not by itself forfeit foreign tax credit where the claim was made in the return and the form was submitted before assessment concluded. Rule 128(9) was treated as prescribing a procedural timeline, while the entitlement to relief under section 90 of the Income-tax Act, 1961 read with the applicable DTAA remained substantive. The rule-making power under section 295 was understood to authorise procedure, not to create a new disqualification. On this reasoning, late filing of Form No. 67 did not extinguish the underlying foreign tax credit claim.

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Issues: Whether delay in filing Form No. 67 could justify denial of foreign tax credit, and whether the assessee remained entitled to relief under section 90 of the Income-tax Act, 1961 read with the applicable DTAA.

Analysis: The claim for foreign tax credit was made in the return itself, and Form No. 67 was later furnished before the assessment proceedings were concluded. Rule 128(9) prescribes the time for furnishing Form No. 67, but it does not expressly provide for denial of the credit on account of belated filing. The right to credit under section 90 and the DTAA was treated as substantive, while the filing of Form No. 67 was regarded as a procedural requirement. The rule-making power under section 295 of the Income-tax Act, 1961 was also understood as enabling the prescription of procedure, not the creation of a new disqualification. In this view, late filing of Form No. 67 did not extinguish the underlying entitlement to foreign tax credit.

Conclusion: Delay in filing Form No. 67 did not disentitle the assessee from foreign tax credit, and the assessee was held entitled to the relief under section 90 of the Income-tax Act, 1961.

Final Conclusion: The disallowance of foreign tax credit was set aside and the Assessing Officer was directed to grant the credit claimed by the assessee.

Ratio Decidendi: Where the statute and rules do not expressly provide forfeiture of foreign tax credit for belated filing of Form No. 67, the requirement is procedural and cannot override the substantive entitlement under section 90 and the applicable DTAA.

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