Foreign tax credit cannot be denied for belated Form 67 filing; TDS claim requires fresh verification before allowance.

Foreign tax credit under section 90 and the relevant treaty provisions could not be denied merely because Form 67 was filed after the prescribed due date, as the filing requirement was treated as procedural and not an express condition precedent to the substantive credit. The Tribunal followed the view that belated filing of Form 67 did not by itself forfeit foreign tax credit and held the assessee entitled to the claim. The TDS claim also required fresh verification on the record, and the matter was remitted for examination with directions to allow the credit on due verification.

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Issues: (i) Whether foreign tax credit could be denied merely because Form 67 was filed after the due date prescribed under the rules. (ii) Whether the claim of TDS required fresh verification and consequential allowance.

Issue (i): Whether foreign tax credit could be denied merely because Form 67 was filed after the due date prescribed under the rules.

Analysis: The claim for foreign tax credit arose under section 90 of the Income-tax Act, 1961, read with the treaty provisions. The delay in filing Form 67 was treated by the Tribunal as a procedural lapse, and the rule was read as not creating an express forfeiture of the substantive credit. The Tribunal also noted the consistent view of coordinate benches that the filing requirement is directory and that the amended rule and notification did not justify outright denial of the claim in the facts of the case.

Conclusion: The foreign tax credit could not be denied solely for belated filing of Form 67, and the issue was decided in favour of the assessee.

Issue (ii): Whether the claim of TDS required fresh verification and consequential allowance.

Analysis: The Tribunal found that the TDS claim had not been properly verified on the facts as placed before it and considered that the matter required examination in accordance with the record and applicable law.

Conclusion: The TDS claim was directed to be verified and allowed on due verification, in favour of the assessee.

Final Conclusion: The assessment-related disallowances were not sustained as final denials, and the matter was sent for verification with directions to grant the eligible credits in accordance with law.

Ratio Decidendi: A substantive tax credit cannot be denied merely for non-compliance with a procedural filing requirement unless the statute expressly makes such compliance a condition precedent to the credit.

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