Foreign Tax Credit claim survives delayed Form 67 filing where the form was available before processing and entitlement was otherwise established.

Foreign Tax Credit could not be denied merely because Form No. 67 was filed after the due date under section 139(1) where the form was submitted before processing of the return and the claim was otherwise supported by the return and treaty provisions. Rule 128 was treated as directory and procedural, so delayed filing did not defeat the substantive entitlement to credit. The credit was therefore directed to be allowed, subject to due verification.

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Issues: Whether Foreign Tax Credit could be denied merely because Form No. 67 was filed after the due date prescribed under section 139(1) of the Income-tax Act, 1961.

Analysis: The assessee had filed Form No. 67 before the return was processed, and the claim for Foreign Tax Credit was otherwise supported by the return and treaty provisions. The Tribunal followed the view that Rule 128 governing the filing of Form No. 67 is intended to facilitate implementation of the Act and is directory in nature. Since the form was available to the processing authority, the credit could not be rejected solely for want of timely filing. The Tribunal also relied on co-ordinate bench and High Court support for the proposition that belated filing of the form does not extinguish the substantive entitlement to Foreign Tax Credit, subject to verification.

Conclusion: The denial of Foreign Tax Credit on the ground of delayed filing of Form No. 67 was not justified, and the credit was directed to be allowed after due verification.

Ratio Decidendi: Filing Form No. 67 within the return-filing due date is a directory procedural requirement for claiming Foreign Tax Credit, and belated filing does not, by itself, defeat the substantive claim when the form is otherwise available for consideration.

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