Foreign tax credit cannot be denied for delayed Form No. 67 filing when treaty relief is substantively available.

Delay in furnishing Form No. 67 under Rule 128(9) did not extinguish the substantive right to foreign tax credit under section 90 and Article 25 of the India-Singapore DTAA. The filing requirement was treated as procedural and directory, not mandatory, so a belated return of Form No. 67 could not override treaty-based relief. The disallowance of foreign tax credit for taxes paid in Singapore was therefore unsustainable, and the relief was to be granted in accordance with law and the DTAA.

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Issues: Whether delay in filing Form No. 67 could justify denial of foreign tax credit claimed in respect of taxes paid in Singapore.

Analysis: The claim for foreign tax credit arose under section 90 of the Income-tax Act, 1961 and Article 25 of the India-Singapore DTAA. Rule 128(9) of the Income-tax Rules, 1962 requires Form No. 67 to be furnished by the due date for filing the return, but the rule does not provide that delayed filing automatically extinguishes the underlying credit. The foreign tax credit is a substantive entitlement flowing from the treaty and section 90, while the filing requirement is procedural. The Tribunal followed its own coordinate decisions and the principle that treaty relief, being more beneficial, prevails over a contrary procedural restriction in the domestic rules.

Conclusion: Delay in filing Form No. 67 did not disentitle the assessee from foreign tax credit, and the disallowance was unsustainable.

Final Conclusion: The assessee was entitled to foreign tax credit for taxes paid in Singapore, and the Assessing Officer was directed to grant the relief in accordance with law and the DTAA.

Ratio Decidendi: A procedural requirement for furnishing Form No. 67 is directory and cannot override the substantive treaty-based right to foreign tax credit where the DTAA and section 90 confer the relief.

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