Foreign Tax Credit claim survives delayed Form 67 filing where foreign tax was paid and income was offered to tax.

Rule 128 on Foreign Tax Credit was treated as procedural, not as creating any disallowance for delayed filing of Form 67. The filing requirement under section 139(1) was held to regulate the manner of claiming relief, not to extinguish the substantive right to credit where foreign tax was actually paid and the related income was offered to tax. Relief under section 90 and the treaty was said to prevent double taxation, so the Form 67 deadline was read as directory rather than mandatory. The Foreign Tax Credit claim was therefore allowed after verification.

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Issues: Whether non-filing of Form 67 before the due date under section 139(1) disentitled the assessee to Foreign Tax Credit.

Analysis: Rule 128 governing Foreign Tax Credit does not prescribe any disallowance for delayed filing of Form 67. The requirement is procedural and is intended to regulate the manner of claiming relief, not to extinguish the substantive entitlement to credit where foreign tax has in fact been paid and the corresponding income has been offered to tax. Relief under section 90 and the applicable treaty is meant to prevent double taxation, and the procedural rule cannot be read so as to defeat that purpose. The requirement of filing Form 67 within the return filing due date was therefore treated as directory and not mandatory.

Conclusion: Non-filing of Form 67 within the due date did not bar the assessee's claim for Foreign Tax Credit, and the credit was directed to be allowed after verification.

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