Foreign tax credit remains available despite delayed Form 67 filing where treaty relief is otherwise substantively due.

Foreign tax credit under section 90, rule 128(9) and Article 25(2)(a) of the India-USA DTAA was treated as a substantive treaty benefit, while filing Form 67 by the return due date was held to be only a procedural requirement. The rule was read as not creating any express disallowance for delay, so late filing could not defeat the assessee's entitlement to foreign tax credit where treaty relief was otherwise available. The credit was therefore allowed despite the delay in Form 67.

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Issues: Whether the assessee was entitled to foreign tax credit despite delay in filing Form 67.

Analysis: The dispute concerned the interaction between the foreign tax credit framework under section 90 of the Income-tax Act, 1961, rule 128(9) of the Income-tax Rules, 1962, and Article 25(2)(a) of the India-USA DTAA. The Tribunal followed coordinate bench decisions and the Madras High Court view that filing Form 67 within the return-filing due date is a procedural requirement. It held that the rule does not contain a disallowance consequence for delay and cannot defeat the substantive entitlement to foreign tax credit where the treaty grants relief more beneficial to the assessee.

Conclusion: The assessee was held entitled to foreign tax credit, and delay in filing Form 67 did not justify denial of the claim.

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