Foreign tax credit filing of Form 67 treated as directory, with credit allowed in principle subject to verification.

Foreign tax credit could not be denied solely because Form 67 was not filed within the due date under Rule 128(9), as the filing requirement was treated as directory rather than mandatory. The Tribunal held that the technical objection to credit denial could not stand where Form 67 had been filed during rectification proceedings, and the assessee's entitlement to credit was recognised in principle subject to factual verification by the assessing authority/CPC.

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Issues: Whether foreign tax credit could be denied solely for non-filing of Form 67 within the due date prescribed under Rule 128(9) of the Income-tax Rules, 1962, and whether the assessee's claim required acceptance subject to verification.

Analysis: The dispute turned on whether filing Form 67 within the time prescribed was mandatory or merely directory for availing foreign tax credit. The Tribunal accepted the view that the requirement is directory, not mandatory, and noted that Form 67 had been filed during rectification proceedings. In view of this, the technical objection to denial of credit could not be sustained, though the factual position was left open for verification by the assessing authority/CPC.

Conclusion: The foreign tax credit claim was able in principle in favour of the assessee, subject to factual verification by the assessing authority/CPC.

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