Foreign Tax Credit entitlement survives a technical Form 67 filing error; AO must verify and allow relief if claim is supported.

A taxpayer who inadvertently e-filed Form No.67 for an incorrect assessment year retains substantive entitlement to foreign tax credit under applicable tax treaties and domestic law; the filing timing or procedural misstep in Rule 128(9) is treated as directory and does not extinguish the credit. Where the correct Form No.67 was subsequently filed and the figures are consistent, the assessing officer must verify correctness and quantum of the claim and grant relief if supported by verification. The technical inadvertent error was found remediable and relief directed after AO verification.

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Issues: Whether the assessee is entitled to claim foreign tax credit under Section 90/90A of the Income-tax Act, 1961 despite having originally e-filed Form No.67 selecting an incorrect assessment year (a technical/inadvertent error), and whether the relief can be granted by way of rectification/consideration subject to verification.

Analysis: The assessee filed the return for AY 2021-22 within time and e-filed Form No.67 on the same day but inadvertently selected AY 2020-21; a correct Form No.67 for AY 2021-22 was later filed. The Tribunal examined record copies of both forms, noting identical figures and that no credit was claimed or allowed in AY 2020-21. The bench considered coordinate decisions of the Tribunal holding that Rule 128(9) of the Income Tax Rules, 1962 is procedural/directory and that non-compliance with the timing requirement does not extinguish the substantive right to foreign tax credit available under Section 90/90A or applicable DTAA. The Revenue raised no objection to verification by the assessing officer; the Tribunal therefore treated the lapse as a technical, bona fide mistake remediable by allowing the relief after due verification of correctness and quantum by the AO.

Conclusion: The assessee is entitled to foreign tax credit under Section 90/90A of the Income-tax Act, 1961. The AO is directed to verify the Form No.67 and the quantum of the claim and thereafter grant the relief in accordance with law. The appeal is allowed for statistical purposes.

Ratio Decidendi: Filing of Form No.67 under Rule 128(9) of the Income Tax Rules, 1962 is a directory/procedural requirement and does not defeat the substantive entitlement to foreign tax credit under Section 90/90A of the Income-tax Act, 1961; where a technical inadvertent error in filing the form is rectified and the claim is otherwise verifiable, the assessing officer must verify and allow the credit in accordance with law.

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