Foreign Tax Credit filing delay is not always fatal when substantive entitlement remains open for verification.

Delayed filing of Form 67 for claiming Foreign Tax Credit under Rule 128(9) was treated as a procedural requirement rather than a fatal bar, because the claim concerned a substantive entitlement under sections 90 and 91 and no adverse consequence was prescribed for delay. The denial of credit solely for late filing was not sustained. As Form 67 was available but had not been examined on merits, the matter was restored for verification of the form and fresh decision on FTC entitlement in accordance with law.

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Issues: Whether delay in filing Form 67 for claiming Foreign Tax Credit under Rule 128(9) of the Income Tax Rules, 1962 is fatal to the claim, and whether the matter required fresh examination by the Assessing Officer.

Analysis: The assessee had claimed Foreign Tax Credit for taxes paid abroad, but Form 67 was filed after the return and after processing under section 143(1) of the Income-tax Act, 1961. The appellate authority treated timely filing of Form 67 as mandatory and denied relief. The Tribunal noted that judicial precedents had treated the filing requirement under Rule 128(9) as directory rather than mandatory, particularly where no adverse consequence is prescribed for delayed filing and the claim otherwise relates to a substantive entitlement under sections 90 and 91 of the Income-tax Act, 1961. Since the record showed that Form 67 was available and had not been examined on merits, the correctness of the FTC claim required verification in accordance with law.

Conclusion: The denial of Foreign Tax Credit solely on the ground of belated filing of Form 67 was not upheld, and the matter was restored to the Assessing Officer for examination of the form and decision on entitlement in accordance with law.

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