Circular No. 171 — Income-tax (Double Taxation Relief)…

What this is

Circular No. 171 was issued by the Central Board of Direct Taxes on 8 July 1975. Its subject is 718. Income-tax (Double Taxation Relief) (Aden) Rules, 1953 - Present position thereunder.

This one is about a tax treaty. India’s treaties enter Indian law by notification under section 90; where the instrument below is that notification, its date decides from when the treaty may be applied, and where it is a circular, it is the Board telling its officers how it reads the treaty — which is not the same thing.

What it does

Records that there is no subsisting double taxation agreement between India and Aden after 30 November 1967. The Income-tax (Double Taxation Relief) (Aden) Rules, 1953, notified on 24-3-1953 under section 49A of the 1922 Act, had continued to operate under section 297(2)(k) of the 1961 Act, but the Government of the People's Democratic Republic of Yemen, formerly Aden, has stated that the agreement underlying them is no longer binding on it after 30 November 1967, the date it attained independence. Indian residents are therefore covered by unilateral relief under section 91, which applies from the assessment year immediately following the financial year in which Aden attained independence - that is, for income in the People's Democratic Republic of Yemen, from assessment year 1968-69.

Why it was issued

The successor government had informed that the agreement on which the 1953 Rules rested ceased to bind it on independence.

Who it reaches

Indian residents with income arising in Aden or the People's Democratic Republic of Yemen
Assessees who had been claiming relief under the 1953 Rules
Assessing Officers computing double taxation relief for those years

The provisions it speaks to

Left, the provision of the Income-tax Act, 1961 as the instrument itself names it. Right, the section of the Income-tax Act, 2025 that the department’s own concordance maps it to — which is where the same ground is now covered.

Under the 1961 Act	Now
s.49A	no counterpart recorded
s.91	s.160
s.297	s.536

The instrument, as the Board published it

The words below are the department’s own, reproduced from its published text. Where the department’s copy carried a publisher’s notes after the instrument, those are not reproduced.

718. Income-tax (Double Taxation Relief) (Aden) Rules, 1953 - Present position thereunder
1. In exercise of the powers available under section 49A of the 1922 Act, the Government of India had issued a Notification dated 24-3-1953 called the Income-tax (Double Taxation Relief) (Aden) Rules, 1953 providing for grant of relief in respect of income on which tax has been paid both in India and in Aden. These Rules being consistent with the corresponding provisions of the 1961 Act, continued to be operative by virtue of the provisions contained in section 297(2)(k).
2. The Government of the People’s Democratic Republic of Yemen (formerly Aden) has, however, stated that the Agreement on the basis of which the above Rules were applicable is no longer binding on it after November 30, 1967, the date of attainment of independence by it. Thus, there is no subsisting agreement between India and Aden for the avoidance of double taxation of income after November 30, 1967.
3. The cases of Indian residents will, therefore, be covered by the provisions for grant of unilateral relief under section 91 of the 1961 Act. This will be applicable in respect of the assessment years commencing from the assessment year immediately following the financial year in which Aden attained independence. Thus, the provision for unilateral relief will become applicable in the case of income in the People’s Democratic Republic of Yemen for and from the assessment year 1968-69.
Circular: No. 171 [F.No. 11(26)/69-FTD-1], dated 8-7-1975.

What to watch

Relief does not disappear - it moves from the treaty route to unilateral relief under section 91, which is computed differently and is generally less generous.
The changeover date is precise: assessment year 1968-69 onwards.
The 1953 Rules had survived into the 1961 Act only through section 297(2)(k), and that survival ends with the agreement itself.

Where you meet it

In old assessments claiming double taxation relief on Aden or Yemen income for assessment year 1968-69 or later.

On the same provision

Other instruments in this library that name the same provision of the 1961 Act. They are not necessarily still operative, and a later one may have replaced an earlier one without saying so.

Circular No. 116 — Income-tax (Double Taxation Relief) (Dominions) Rules, 1956 providing for grant of double taxation relief with certain d 10 July 1973
Circular No. 172 — Income-tax (Double Taxation Relief) (Dominions) Rules, 1956 providing for grant of double taxation relief with certain d 8 July 1975
Notification No. 1574 — Approval of an institution under section 297 of the Income-tax Act, 1961 10 May 1965

← Circular No. 174 · Circular No. 172 →

A circular binds the department, not you and not a court. The Board issues a circular to its own officers. An assessee may hold the department to a circular that helps him; the department cannot hold an assessee to one that hurts him, and the Tribunal and the courts decide the law for themselves.

Source: the Income Tax Department’s own published text — its page for this instrument.