Denying Foreign Tax Credit for Late Form 67 Filing Deemed Unjust; Procedural Lapse Does Not Forfeit FTC Rights.

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....The ITAT Delhi held that denial of Foreign Tax Credit (FTC) claim due to late filing of Form 67 after the due date of filing Income Tax Return (ITR) was not justified. Section 90 of the Act along with Article 25(2)(a) allows USA tax paid as a credit against Indian tax, limited to the proportion of Indian tax. Rule 128(9) mandates filing Form 67 by the due date of ITR filing u/s 139(1), recently amended to end of assessment year. The Rule does not specify denial of FTC if Form 67 is filed late or incorrectly and rectified later. Filing Form 67 is procedural, not mandatory. Violating procedural norms does not extinguish substantive right to claim FTC. The JAO is directed to allow FTC limited to proportion of Indian tax payable, ruling in favor of the assessee.....