Foreign tax credit claim survives late Form 67 filing where the requirement is treated as directory, not mandatory.

Filing Form 67 after the due date for filing the return under section 139(1) was treated as a directory, not mandatory, requirement for claiming foreign tax credit. On that basis, late filing by itself was held insufficient to deny the credit. The Tribunal also noted that the factual position required fresh verification, so the matter was restored to the Assessing Officer for examination and consequential recomputation in accordance with law. The disallowance of foreign tax credit in rectification proceedings under section 154 was therefore not sustained on the stated ground.

---

---

Issues: Whether the assessee was entitled to foreign tax credit despite filing Form 67 after the due date prescribed for filing the return under section 139(1) of the Income-tax Act, 1961, and whether the disallowance could be sustained in rectification proceedings under section 154.

Analysis: The dispute turned on whether filing Form 67 within the due date of the return was mandatory or directory. The Tribunal followed the view that the requirement is directory and not mandatory, and therefore late filing of Form 67 by itself does not justify denial of foreign tax credit. Since the relevant facts had to be verified afresh, the matter was restored to the Assessing Officer for examination and consequential computation in accordance with law.

Conclusion: The assessee succeeded on the substantive issue, and the disallowance of foreign tax credit was set aside for fresh verification and recomputation.

---