Foreign Tax Credit claim survives late Form 67 filing when the form is filed before assessment is completed.

Foreign Tax Credit could not be denied merely because Form No. 67 was filed after the due date under Rule 128(9) when it was furnished before completion of assessment. The Tribunal treated the filing timeline for Form No. 67 as directory, not mandatory, where the Assessing Officer still had the form available to consider the claim. Applying the construction favourable to the assessee where two views are possible, it held that the credit for taxes paid outside India remained allowable and the denial of Foreign Tax Credit was unsustainable.

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Issues: Whether Foreign Tax Credit could be denied solely because Form No. 67 was not filed by the due date under Rule 128(9) of the Income-tax Rules, 1962, when the form was filed before the assessment order was passed.

Analysis: Rule 128(9) requires furnishing of Form No. 67 for claiming credit of taxes paid outside India. The Tribunal followed the line of authority holding that the time limit for filing the form is directory, not mandatory, where the form is available before completion of assessment. It applied the principle that, when two views are possible, the view favourable to the assessee should prevail, and held that the relevant form had been filed in time for the Assessing Officer to consider the claim.

Conclusion: The denial of Foreign Tax Credit was unsustainable and the assessee was entitled to credit for taxes paid outside India.

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