Foreign tax credit remains allowable despite delayed Form 67 filing, as the Rule 128 deadline is procedural.

Belated filing of Form No. 67 under Rule 128 does not, by itself, defeat an assessee's claim for foreign tax credit under section 90. The requirement to furnish Form No. 67 on or before the due date under section 139(1) was treated as procedural, because neither section 90 nor Rule 128 expressly provides that delay extinguishes the substantive entitlement to relief. The absence of any express statutory consequence for late filing, unlike provisions that specifically deny deductions or reliefs for non-compliance, supported the view that the time limit is directory rather than mandatory. The foreign tax credit remained allowable.

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Issues: Whether belated filing of Form No. 67 under Rule 128 of the Income Tax Rules, 1962 disentitles an assessee from claiming foreign tax credit under section 90 of the Income-tax Act, 1961.

Analysis: The assessee had claimed foreign tax credit in respect of income taxed in India and the USA. Rule 128(8) requires filing of Form No. 67 and Rule 128(9) provides that it be furnished on or before the due date under section 139(1). The requirement was held to be procedural in nature because neither section 90 nor Rule 128 expressly states that non-filing within time extinguishes the substantive entitlement to foreign tax credit. The existence of specific statutory provisions that expressly deny deductions or reliefs for delayed filing, contrasted with the absence of such language in Rule 128(9), supported the view that the time limit is directory and not mandatory.

Conclusion: Belated filing of Form No. 67 does not by itself bar the claim for foreign tax credit, and the relief under section 90 remains allowable.

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