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<h1>Foreign Tax Credit should not be lost for brief Form 67 delay; grant credit after verification of supporting records.</h1> Denial of foreign tax credit solely for delayed filing of Form No.67 is unsustainable; a procedural lapse does not extinguish the substantive right to ... Denial of Foreign Tax Credit - delay in filing of Form 67 by the assessee - Whether Procedural defect does not extinguish substantive right? HELD THAT: - The Tribunal held that the assessee's belated submission of Form No.67 was a procedural defect which does not extinguish the substantive right to foreign tax credit. Following the decision of M/S. REAL TIME DATA SERVICES PRIVATE LIMITED [2026 (2) TMI 1060 - DELHI HIGH COURT] the Tribunal directed that the claim for FTC, supported by the belated Form No.67, be considered and verified by the AO. The matter was restored to the AO for limited purposes of verification of the facts and allowance of the FTC if found admissible in accordance with law. [Paras 5, 6] Final Conclusion: The Tribunal allowed the appeal, holding that delay in filing Form No.67 is a procedural lapse which does not defeat entitlement to foreign tax credit, and remitted the matter to the AO for verification and decision on the FTC claimed for AY 2023-24. Issues: Whether the denial of foreign tax credit claimed under section 90/90A of the Income-tax Act, 1961 on account of delayed filing of Form No.67 is sustainable, and whether the matter should be restored to the Assessing Officer for verification and grant of credit.Analysis: The assessee declared foreign income and claimed foreign tax credit under section 90/90A but filed Form No.67 nine days after the due date. The Tribunal applied the principle that a procedural breach does not extinguish the substantive right to relief under DTAA and followed the decision of the jurisdictional High Court holding that technical delay in filing Form No.67 should not automatically bar allowance of foreign tax credit. The Tribunal directed limited remand to the Assessing Officer to verify the facts and allow the credit if supported by records.Conclusion: The denial of foreign tax credit solely on account of delayed filing of Form No.67 is set aside; the matter is restored to the Assessing Officer to verify the claim and allow the foreign tax credit if substantiated. The appeal is allowed in favour of the assessee.Ratio Decidendi: A procedural non-compliance such as delayed filing of Form No.67 does not extinguish the substantive right to foreign tax credit under the DTAA; such claims must be considered on verification of underlying facts rather than denied mechanically for technical delay.
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