Foreign tax credit claim: delayed Form No. 67 filing treated as procedural, with matter remanded for verification.

Delay in filing Form No. 67 for foreign tax credit was treated as a procedural lapse, not a substantive bar, where the return was filed on time, foreign assets were disclosed, and the credit claim was otherwise supported. The Tribunal followed the view that the Rule 128 time limit is directory and that treaty-based entitlement to foreign tax credit should not be defeated solely by belated filing of the form. The earlier denial was therefore set aside, and the matter was remanded to the Assessing Officer for verification of Form No. 67 and fresh adjudication on the merits of the credit claim.

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Issues: Whether the delay in filing Form No. 67 for claiming foreign tax credit under Rule 128 of the Income Tax Rules, 1962 could be condoned and the matter restored for verification of the assessee's entitlement to foreign tax credit.

Analysis: The assessee had filed the return within the due date under section 139(1) of the Income-tax Act, 1961 and had disclosed the foreign assets, but the foreign income and corresponding foreign tax credit claim were omitted in the original return and later reflected through a revised computation during assessment. Form No. 67 was filed during the assessment proceedings. The Tribunal followed the view that the time limit for filing Form No. 67 is directory and not mandatory, and that procedural non-compliance should not defeat substantive relief where the treaty entitlement is otherwise available. It noted that the earlier denial of credit rested only on belated filing and that the claim required verification on merits.

Conclusion: The delay in filing Form No. 67 was condoned and the matter was remanded to the Assessing Officer for verification of the Form No. 67 and a fresh decision in accordance with law.

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