Foreign Tax Credit survives delayed Form 67 filing where the claim is made before rectification under clarified Rule 128(9)

Delayed filing of Form No. 67 does not, by itself, disentitle an assessee from claiming Foreign Tax Credit under Section 90 of the Income-tax Act, 1961. Rule 128(9), as substituted with effect from 1 April 2022, prescribes the time and manner for furnishing the form but does not expressly mandate denial of credit solely for late filing. The amendment and its Explanatory Memorandum clarify that claims furnished during financial year 2022-23 may be allowed even when filed belatedly. Article 24 of the India-UK Double Taxation Avoidance Agreement also permits credit for taxes paid in the other country. The clarification is stated to operate retrospectively, including where Form No. 67 is filed before rectification.

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Issues: Whether delayed filing of Form No. 67 disentitles the assessee from claiming Foreign Tax Credit under Section 90 of the Income-tax Act, 1961, particularly where the claim was made after processing of the return but before rectification.

Analysis: Rule 128(9) of the Income-tax Rules, 1962, as substituted with effect from 01.04.2022, prescribes the time and manner for furnishing Form No. 67 but does not provide for denial of Foreign Tax Credit merely because the form was filed belatedly. The amendment and its Explanatory Memorandum clarify that claims furnished during financial year 2022-2023 are to be allowed even when filed late. Article 24 of the India-United Kingdom Double Taxation Avoidance Agreement also permits credit for taxes paid in the other country. The amendment is clarificatory and applies retrospectively. The assessee filed Form No. 67 shortly after processing of the return and thereafter sought rectification.

Conclusion: Delayed filing of Form No. 67 does not bar the assessee from claiming Foreign Tax Credit. The assessee is entitled to Foreign Tax Credit of Rs. 5,73,915 under Section 90 of the Income-tax Act, 1961.

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