Circular No. 172

Income-tax (Double Taxation Relief) (Dominions) Rules, 1956 providing for grant of double taxation relief with certain dominions - Present position thereunder

What this is

Circular No. 172 was issued by the Central Board of Direct Taxes on 8 July 1975. Its subject is Income-tax (Double Taxation Relief) (Dominions) Rules, 1956 providing for grant of double taxation relief with certain dominions - 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 India has no subsisting double taxation agreement with Ghana, Nigeria or Mauritius, following the position ascertained from those Governments, each of which said it does not consider any agreement on avoidance of double taxation to subsist with India after it attained independence. Ghana became independent on 6th March, 1957, Nigeria on 1st October, 1960 and Mauritius on 12th March, 1968. Indian residents with income from these countries therefore fall to be given unilateral relief under section 91, applicable from the assessment year immediately following the financial year of independence, that is assessment year 1957-58 for Ghana, 1961-62 for Nigeria and 1968-69 for Mauritius. It supplements paragraph (4) of Circular No. 116, dated 10-7-1973 on the Income-tax (Double Taxation Relief) (Dominions) Rules, 1956.

Why it was issued

The position of these three countries under the Dominions Rules had been left open in the earlier circular and has since been ascertained from the Governments concerned.

Who it reaches

Residents of India with income arising in Ghana, Nigeria or Mauritius
Assessees who claimed relief under the Dominions Rules for those countries
Assessing Officers computing double taxation relief

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.91	s.160

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.

Income-tax (Double Taxation Relief) (Dominions) Rules, 1956 providing for grant of double taxation relief with certain dominions - Present position thereunder

1. Attention is invited to paragraph (4) of Board’s Circular No. 116, dated 10-7-1973 [Clarification 1] on the above subject.
2. The position in respect of Ghana (formerly Gold Coast), Nigeria and Mauritius has since been ascertained. The Governments of these three countries have stated that after the date of attainment of independence by them, they do not consider that any agreement on the question of avoidance of double taxation of income subsists between them and the Government of India. Ghana and Mauritius attained independence on March 6, 1957 and March 12, 1968, respectively, while Nigeria became independent on October 1, 1960. There is, thus, no subsisting agreement between India and these three countries for the avoidance of double taxation of income after the dates indicated above. The cases of Indian residents will, therefore, be covered by the provision for grant of unilateral relief under section 91. This will be applicable in respect of the assessment years commencing from the assessment year immediately following the financial year in which a particular country attained independence. Accordingly, the provision for unilateral relief will become applicable in the case of income in these countries for and from the assessment year as indicated below :

Assessment year

1. Ghana

1957-58

2. Nigeria

1961-62

3. Mauritius

1968-69

Circular: No. 172 [F.No. 501/21/73-FTD], dated 8-7-1975.

What to watch

The effect is to move the claim from agreement relief to unilateral relief under section 91, which is computed differently and is confined to residents.
Each country has its own starting assessment year; the three do not begin together.
India later entered into a convention with Mauritius, notified on 6-12-1983, which this 1975 circular naturally does not carry.

Where you meet it

In a claim for double taxation relief on income taxed in one of these three countries, and in the computation of relief in the assessment order.

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. 171 — 718. Income-tax (Double Taxation Relief) (Aden) Rules, 1953 - Present position thereunder 8 July 1975
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. 171 · Circular No. 170 →

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.