Foreign Tax Credit cannot be denied solely for late Form 67 filing where the claim is otherwise verifiable

Delay in filing Form 67 for claiming Foreign Tax Credit under Rule 128 was treated as a procedural lapse, not a substantive ground to deny relief. The ITAT Delhi noted that the form supports implementation of the foreign tax credit available under sections 90 and 91 of the Income-tax Act, and does not itself create a disallowance mechanism for late filing. It distinguished the Supreme Court ruling relied on by the revenue because the statutory context there concerned exemption-related relief, not foreign tax credit. Where the credit is otherwise verifiable, the claim should be allowed after due verification.

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Issues: Whether delay in filing Form 67 for claiming Foreign Tax Credit could, by itself, justify denial of the credit under the Income-tax Rules.

Analysis: The appeal turned on the character of the requirement under Rule 128 for filing Form 67 in support of a foreign tax credit claim. The Tribunal noticed the contrary view taken by the revenue authorities, but followed the line of decisions holding that the rule is intended to facilitate implementation of the substantive relief under sections 90 and 91 of the Income-tax Act, 1961, and does not create a disallowance mechanism merely because the form is filed late. The Tribunal also distinguished the Supreme Court ruling relied upon by the revenue, holding that the statutory setting of the foreign tax credit provisions is different from the exemption-related provision considered there. Relying on the Delhi Tribunal and the Madras High Court, it held that delayed filing of Form 67 is a procedural lapse and not a ground to deny the claim where the credit is otherwise verifiable.

Conclusion: Delay in filing Form 67 did not warrant denial of Foreign Tax Credit; the credit was to be allowed after due verification in favour of the assessee.

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