Foreign tax credit: delayed Form 67 filing does not by itself defeat relief under Rule 128(9).

Foreign tax credit under section 90/90A could not be denied merely because Form No. 67 was filed after the due date under section 139(1). Rule 128(9) was treated as procedural and directory, not a substantive condition that extinguishes the credit. Relief under the treaty and the Act remained available where foreign tax had been paid, subject to the applicable legal conditions, and delayed filing of Form No. 67 alone did not justify refusal of the credit.

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Issues: Whether foreign tax credit could be denied merely because Form No. 67 was filed after the due date prescribed under section 139(1) of the Income-tax Act, 1961, and whether Rule 128(9) of the Income-tax Rules, 1962 is mandatory or directory.

Analysis: The assessee had claimed foreign tax credit under section 90/90A of the Income-tax Act, 1961 in respect of tax paid abroad and had furnished Form No. 67 belatedly. The Court relied on the settled view that Rule 128(9) prescribes the procedure for claiming foreign tax credit, but does not create a substantive bar or authorise denial of the credit for delayed filing of Form No. 67. It treated the filing requirement as directory, not mandatory, and held that the double taxation avoidance treaty and section 90 operate to grant relief where foreign tax has been paid, subject to the legal conditions of the treaty and the Act.

Conclusion: Foreign tax credit could not be refused solely on account of delayed filing of Form No. 67, and the assessee was entitled to the credit.

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