Delayed Form 67 filing does not defeat Foreign Tax Credit where foreign tax payment and Indian taxation of income are undisputed.

Delayed filing of Form No. 67 under Rule 128 does not, by itself, disentitle an assessee from Foreign Tax Credit where the foreign tax paid and inclusion of the related income in India are undisputed. Rule 128 was treated as a procedural mechanism for furnishing particulars to verify the claim, not as the source of the substantive credit right under section 90 read with the treaty. Rigid insistence on the form's timing could not defeat relief against double taxation. The credit was therefore allowed, subject only to limited verification of the foreign tax paid.

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Issues: Whether delayed filing of Form No. 67 under Rule 128 of the Income-tax Rules, 1962, by itself disentitles an assessee from claiming Foreign Tax Credit under section 90 of the Income-tax Act, 1961 read with Article 23 of the India-Germany Double Taxation Avoidance Agreement, when payment of foreign tax and inclusion of the related income in India are undisputed.

Analysis: The foreign salary earned in Germany, the tax paid thereon, and the inclusion of that income in the total income chargeable to tax in India were not in dispute. The only objection was that Form No. 67 was furnished after processing of the return under section 143(1). Rule 128 was treated as a procedural mechanism for furnishing particulars necessary to verify the claim. It was held that the rule does not create the right to Foreign Tax Credit and does not provide that delayed filing of Form No. 67 results in forfeiture of the substantive relief under section 90 or the treaty. Once the factual basis for the credit is established, rigid insistence on the timing of the form cannot defeat the relief against double taxation.

Conclusion: Delayed filing of Form No. 67 does not, by itself, bar the assessee from Foreign Tax Credit; the credit was directed to be granted, subject only to limited verification of the foreign tax paid.

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