Circular No. 15/2017

What it does

Settles from when Cyprus stopped being a notified jurisdictional area under section 94A. Cyprus had been so notified by Notification No. 86/2013 dated 1 November 2013, and that notification was rescinded by Notification No. 114 dated 14 December 2016 and Notification No. 119 dated 16 December 2016 with effect from the date of issue of the rescinded notification. Some income-tax authorities were reading the rescission as operating only from 2016. The Board clarifies that Notification No. 86/2013 stands rescinded with effect from the date of its own issue, so Cyprus ceases to be a notified jurisdictional area with retrospective effect from 1 November 2013.

Why it was issued

It was brought to the Board's notice that in some cases income-tax authorities had taken the view that the rescission was not retrospective from 1 November 2013, and the doubt had to be removed.

Who it reaches

Assessees with transactions or payments involving Cyprus in the period from November 2013
Deductors who withheld at the higher rate applicable to a notified jurisdictional area on Cyprus payments
Assessees whose Cyprus expenditure was disallowed on the strength of the notification
Assessing Officers applying section 94A to Cyprus 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.94A	s.176

The instrument, as the Board published it

The department publishes this one only as a PDF, so the words below were read out of that PDF by machine. That reading can carry its own mistakes — a misread number, a broken line. Check the signed document before you rely on a figure in it.

Circular No. 15 of 2017
F. No. 500/002/201 S-FT&TR'lll(1 )
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
New Delhi, dated 21st April, 2017

Subject: Clarification on the list under section 94A of the Income-tax Act, 1961.

Cyprus was specified as a "notified jurisdictional area" (NJA) under section 94A of the Income-tax Act, 1961 vide Notification No.86/2013 dated 01.11.2013. The said Notification No. 86/2013 was subsequently rescinded vide Notification No. 114 dated 14.12.2016 and Notification No. 119 dated 16.12.2016 with effect from the date of issue of the notification.

2. It has been brought to notice of the Central Board of Direct Taxes that in some cases a view has been taken by the Income-tax authorities that the rescission of Notification No. 86/2013 was not with retrospective effect from 01.11.2013. For removal of doubts, it is hereby clarified that Notification No. 86/2013 has been rescinded with effect from the date of issue of the said notification, thereby, removing Cyprus as a notified jurisdictional area with retrospective effect from 01.11.2013.

(Garirav Sharma)
Under Secretary to Government of India

Copy to:
1. The Chairman, Members and officers of CBDT of the rank Under Secretary and above
2. PS to the Revenue Secretary
3. All Pr.CCs/IT/ Pr.DGs/IT and DGs/IT(Inv.)
4. Addl. Director General of Income Tax (PR, PP & OL)
5. The Comptroller & Auditor General of India
6. Hindi cell of Department of Revenue for Hindi translation
7. The Web Manager of www.incometaxindia.gov.in
8. The Web Manager of www.irsofficersonline.in
9. Guard file

What to watch

The retrospection runs to 1 November 2013, which is the date of the original notification, so the whole period during which Cyprus stood notified is wiped out.
The clarification is about Cyprus alone; it says nothing about any other jurisdiction notified under section 94A.
The circular does not set out what the consequences of notification were, so the relief in any particular case has to be worked out on the section itself.
Reopening or rectification of a completed year on this footing is not addressed by the circular.

Where you meet it

Where a disallowance or a higher rate of deduction was applied to a Cyprus transaction of the years 2013 to 2016 on the ground that Cyprus was a notified jurisdictional area.

What it names

It mentions. Circular No. 15/2017

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.

Notification No. 114/2016 [F.No. 500/02/2015-FT&TR-III] / S.O. 4033(E) — 2 the Gazette of INDIA : Extraordinary [Part Ii—sec. 3(ii)] 14 December 2016

← Circular 14/2017 · Circular No. 13/2017 →

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.

What this is