Foreign tax credit cannot be denied for delayed Form No. 67 filing where treaty relief under section 90 is otherwise available.

Foreign tax credit under section 90 of the Income-tax Act, 1961 and the applicable DTAA cannot be denied merely because Form No. 67 was filed late. Rule 128 of the Income-tax Rules, 1962 was treated as prescribing a procedural and directory filing requirement, not a mandatory condition that extinguishes the substantive treaty-based entitlement to relief. Where the claim for taxes paid outside India is otherwise supported by the record, delayed compliance with Form No. 67 does not defeat foreign tax credit, and the more beneficial treaty provisions prevail over the domestic procedural rule to that extent.

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Issues: Whether foreign tax credit could be denied merely because Form No. 67 was filed belatedly, and whether the assessee remained entitled to relief under section 90 of the Income-tax Act, 1961 read with the applicable DTAA.

Analysis: Relief for taxes paid outside India flows from section 90 of the Income-tax Act, 1961 and the relevant treaty provision. Rule 128 of the Income-tax Rules, 1962 prescribes the filing of Form No. 67, but the rule does not create a statutory consequence of disallowance for delayed filing. The filing requirement was treated as procedural and directory, not mandatory, and delay in compliance could not extinguish the substantive right to foreign tax credit where the claim was otherwise supported by the record. The treaty provisions were applied as overriding the domestic rule to the extent they were more beneficial to the assessee.

Conclusion: The delay in filing Form No. 67 did not justify denial of foreign tax credit, and the assessee was entitled to the claim.

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