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2023 (7) TMI 1369 - AT - Income TaxEntitlement to foreign tax credit - required Form No. 67 is not filed in accordance with the provision of rule 128(9) - violation of procedural mandate - HELD THAT:- It is well settled that while laying down a particular procedure, if no negative or adverse consequences are contemplated for non-adherence to such procedure, the relevant provision is normally not taken to be mandatory and is considered to be purely directory. Admittedly, Rule 128 does not prescribe denial of credit of FTC. Further the Act i.e. section 90 or 91 also do not prescribe timeline for filing of such declaration on or before due date of filing of ROI. Further rule 128 (4) clearly provides the condition where the foreign tax credit would not be allowed. Rule 128 (9) does not say that if prescribed form would not be filed on or before the due date of filing of the return no such credit would be allowed. By the amendment to the rule with effect from 1 April 2022, the assessee can file such form number 67 on or before the end of the assessment year. Therefore, legislature in its own wisdom has extended such date which is beyond the due date of filing of the return of income. The fact in the present case is quite distinct then the issue involved in the decision of the honourable Supreme Court in case of Wipro Ltd [2022 (7) TMI 560 - SUPREME COURT] Here it is not the case of violation of any of the provisions of the act but of the rule, which does not provide for any consequence, if not complied with. Therefore, we hold the assessee is eligible for foreign tax credit, as he has filed in form 67 before completion of the assessment. We hold that the claim of foreign tax credit cannot be denied and we direct the AO to allow the FTC based upon the belated form No. 67 filed by the assessee accordingly. Appeal of the assessee is allowed.
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