Foreign Tax Credit cannot be denied solely for delayed Form 67 filing where treaty credit otherwise applies.

Foreign Tax Credit under section 91 of the Income-tax Act could not be denied merely because Form 67 was filed after the return due date. The requirement to file Form 67 within the section 139(1) deadline was treated as procedural and directory, not mandatory, and treaty credit under the Double Taxation Avoidance Agreement was held to prevail over the Rules where foreign tax had been paid. The delayed filing of Form 67, by itself, was therefore not a valid ground to reject the substantive credit.

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Issues: Whether Foreign Tax Credit could be denied solely because Form 67 was filed after the due date prescribed for filing the return of income.

Analysis: The claim for Foreign Tax Credit arose under section 91 of the Income-tax Act, 1961 and was rejected in processing under section 143(1) only on the ground of delayed filing of Form 67. The relevant rule requiring filing of Form 67 within the due date under section 139(1) was treated as a procedural provision. Consistent tribunal and High Court authority was relied upon to hold that the requirement is directory and that the Double Taxation Avoidance Agreement prevails over the Rules where the treaty grants credit for foreign tax paid. The delay in furnishing the form, by itself, was therefore held not to justify denial of the substantive credit.

Conclusion: The delay in filing Form 67 did not bar the assessee from claiming Foreign Tax Credit, and the credit was directed to be allowed.

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