Foreign tax credit cannot be denied for delayed Form 67 filing when the claim is otherwise duly disclosed.

Delay in filing Form 67 does not by itself justify denial of foreign tax credit where the tax paid outside India and the underlying claim are otherwise disclosed in the return. Rule 128(9) of the Income-tax Rules, 1962 was read as not prescribing any adverse consequence for delayed filing, and the Form 67 requirement was treated as directory rather than mandatory. Sections 90 and 91 of the Income-tax Act, 1961 were noted to contain no timeline for furnishing the declaration, and the treaty position under the DTAA supported allowance of the credit. The foreign tax credit was therefore to be allowed, subject only to verification of the claim.

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Issues: Whether delay in filing Form 67 could justify denial of foreign tax credit claimed by the assessee.

Analysis: The credit claimed related to taxes paid outside India and was duly reflected in the return. Rule 128 of the Income-tax Rules, 1962 was examined and sub-rule (9) was held not to prescribe denial of foreign tax credit for delayed filing of Form 67. The requirement of filing Form 67 was treated as directory, not mandatory, and no adverse consequence for non-compliance was found in the rule. The provisions of section 90 and section 91 of the Income-tax Act, 1961 were noted to contain no timeline for furnishing such declaration, and the treaty position under the DTAA was also relied upon.

Conclusion: Delay in filing Form 67 did not justify denial of the foreign tax credit. The credit was directed to be allowed in favour of the assessee.

Final Conclusion: The assessee was held entitled to relief for foreign tax credit, and the matter was sent back only for verification and allowance of the claim.

Ratio Decidendi: Furnishing Form 67 for foreign tax credit is a directory procedural requirement, and delay in filing it cannot by itself defeat a substantive claim for credit where the tax paid abroad and the underlying claim are otherwise duly disclosed.

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