Foreign Tax Credit compliance: belated Form 67 filing was treated as a curable procedural lapse, not a bar to credit.

Belated filing of Form 67 under Rule 128(9) was treated as a directory, not mandatory, compliance requirement for claiming Foreign Tax Credit under sections 90 and 90A. The commentary states that where the underlying entitlement to credit is otherwise satisfied, delayed filing of the form should not defeat the substantive claim merely because it was lodged after the section 139(1) due date. The filing lapse was described as a curable procedural default, and the delay was directed to be condoned, leaving the assessee entitled to the credit.

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Issues: Whether belated filing of Form 67 under Rule 128(9) of the Income-tax Rules, 1962 could justify denial of Foreign Tax Credit claimed under sections 90 and 90A of the Income-tax Act, 1961.

Analysis: The appeals concerned denial of Foreign Tax Credit solely on the ground that Form 67 was filed after the due date under section 139(1). The governing question was whether the time limit in Rule 128(9) is mandatory or merely procedural. The decision followed the view that the rule does not expressly provide forfeiture of credit for delayed filing, and that denial of a substantive treaty-based or statutory credit cannot be founded only on a technical lapse when the underlying entitlement is otherwise satisfied. Since the facts were found to be identical to earlier coordinate bench decisions, the delay in filing Form 67 was treated as a curable procedural default.

Conclusion: Belated filing of Form 67 did not warrant denial of Foreign Tax Credit, and the requirement was held to be directory rather than mandatory. The assessee was entitled to the credit and the delay was directed to be condoned.

Ratio Decidendi: A procedural filing requirement cannot defeat a substantive claim for Foreign Tax Credit where the statute or rule does not expressly prescribe forfeiture for delayed compliance.

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