Foreign tax credit cannot be denied for delayed Form 67 filing when treaty relief remains otherwise available.

Foreign tax credit could not be denied merely because Form No. 67 was filed with a revised return rather than the original return. The Tribunal treated rule 128(9) as procedural and directory, not a mandatory condition that extinguishes the claim, and held that the Rules cannot override the Income-tax Act or the treaty-based credit under the double taxation avoidance agreement read with section 90. The credit was therefore allowable, subject to verification under law.

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Issues: Whether foreign tax credit could be denied merely because Form No. 67 was filed in the revised return and not with the original return, and whether rule 128(9) made timely filing of Form No. 67 mandatory so as to defeat the claim.

Analysis: The appeal concerned a claim for foreign tax credit that had been made in the revised return and was available when the return was processed under section 143(1) of the Income-tax Act, 1961. The Tribunal followed its earlier coordinate bench view that rule 128(9) does not provide for disallowance of foreign tax credit for delayed filing of Form No. 67. The requirement to file Form No. 67 was treated as procedural and directory, not mandatory. The Tribunal also accepted that the double taxation avoidance agreement, read with section 90 of the Income-tax Act, 1961, gives effect to the treaty benefit and that the Rules cannot override the Act or curtail the treaty-based credit on a mere procedural lapse.

Conclusion: The foreign tax credit could not be denied on the ground that Form No. 67 was not filed with the original return, and the assessee was entitled to the credit subject to verification under law.

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