Section 90(4)

Section 90(4) — the law in short

What the courts have decided on section 90(4), in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• AAR v Tiger Global International II Holdings Supreme CourtHelps departmentValidity unconfirmed
  I hold a Mauritius TRC. Can the department still deny me treaty relief on the capital gains?
  Yes. A Tax Residency Certificate is a necessary eligibility requirement under s.90(4) but is not sufficient or conclusive evidence of residence, beneficial ownership or entitlement to treaty benefits, and the authorities may examine the substance of the arrangement. The Supreme Court set aside the High Court's judgment, restored the AAR's rejection and held the gains taxable in India.
• Blackstone Capital Partners Singapore VI v ACIT High CourtHelps taxpayerUnder appeal
  I hold a valid TRC. Can the AO go behind it and reopen my assessment for lack of substance?
  No. A valid tax residency certificate is statutorily the only evidence required to be eligible for treaty benefit, and the Indian authorities cannot disregard a certificate issued by another State's tax authority. Since Article 13(4) of the India-Singapore treaty then protected the capital gains, no income chargeable to tax had escaped assessment and the s.148 notice was invalidated.
• Kenneth Malcolm Holland v DCIT (International Taxation), Gurgaon High CourtHelps departmentValidity unconfirmed
  My client is a US national who came to India to teach and wants the two-year professors' exemption in the treaty. He has no Tax Residency Certificate from the US and the department will not give him an Indian one. Can he still claim the exemption?
  No. The Punjab and Haryana High Court held that a non-resident claiming relief under a treaty is hit by s.90(4) unless he obtains a certificate of residence from the government of the country of which he claims to be resident, and that a passport, an appointment letter and Form 16 are no substitute. The department's order, recited at para 4 and left undisturbed, had also said that under Rule 21AB(3) it is a person resident in India who may apply to the Assessing Officer for a certificate of residence, so that a non-resident cannot obtain an Indian TRC; the Court dismissed the writ on s.90(4) alone and made no finding of its own on that rule.
• SC Lowy P I (LUX) v ACIT ITATHelps taxpayerValidity unconfirmed
  The AO calls my Luxembourg fund a conduit and invokes the PPT. Is a TRC and some substance enough to answer that?
  Yes, on these facts, but not for the reason this entry previously gave. The Tribunal allowed the India-Luxembourg treaty benefits because the tax residency certificate was valid and unquestioned and the Assessing Officer brought no cogent material to show that the company was in substance a conduit - only views and presumptions. It applied the Delhi High Court's propositions on tax residency certificates, held that the burden of establishing that obtaining a benefit was one of the principal purposes lies on the revenue, and found that burden unmet on a record showing a Luxembourg company that filed and paid tax there, bore real operating costs and held 13.95 per cent of its portfolio in India.
• Saket Kanoi v DCIT ITATHelps taxpayerValidity unconfirmed
  The officer says my client pays no tax in Dubai, so the India-UAE agreement cannot apply to him. Is that right?
  No. The Delhi Tribunal held that a resident of the UAE is entitled to the benefit of the India-UAE agreement even though the UAE levies no tax on him. Being 'liable to tax' in a Contracting State does not require that tax was actually paid; it is enough that the State has the right to tax, whether or not the right is exercised. The Assessing Officer's reasoning that there was no double taxation, so no relief was due, was rejected.
• Sameer Malhotra v ACIT ITATHelps taxpayer
  I moved to Singapore with my family. Can the AO's tie-breaker questionnaire alone make me an Indian resident?
  No. A tie-breaker questionnaire is an important aid but cannot be the exclusive basis for the conclusion, and permanence of a home is assessed qualitatively as well as by duration, so a flat taken on rent abroad can be a permanent home. The Tribunal decided the tie-breaker principally on the centre of vital interests - the assessee had moved to Singapore with his family to earn there, so his personal and economic relations for that period were in Singapore - with habitual abode offered as an additional reason. The addition of global income was deleted and the Assessing Officer directed to accept the revised return.
• DGIT(Systems) notification of 28.03.2023 on Form 10F CBDT Circulars & InstructionsHelps taxpayerSuperseded by amendment
  My foreign payee has no PAN and cannot file Form 10F online. Is his treaty claim lost?
  No. E-filing of Form 10F was made compulsory by DGIT(Systems) Notification No. 3 of 2022 dated 16 July 2022, but non-residents who had no PAN and were not required to have one were exempted from e-filing — first until 31 March 2023 and, by this notification, until 30 September 2023 — and could file Form 10F manually as before. From October 2023 the portal added a registration category for non-residents not holding and not required to hold a PAN, which allowed such payees to e-file.
• Statutory position — s.90(4), s.90(5) and Rule 21AB: the TRC and Form 10F a non-resident must have before any treaty relief, and the Form 10FA route that is closed to him CBDT Circulars & InstructionsCuts both waysValidity unconfirmed
  What exactly does a non-resident have to hold and file before he can claim a treaty benefit, and can he ask the Indian Assessing Officer for a residence certificate?
  A non-resident to whom a treaty applies is NOT entitled to claim any relief under it unless he obtains a certificate of his being a resident from the Government of the country or specified territory of residence — that is s.90(4), and s.90A(4) is its mirror for an agreement with a specified association. Section 90(5) requires him also to provide such other documents and information as may be prescribed, and Rule 21AB(1) prescribes five particulars to be furnished in Form No. 10F. The Indian Assessing Officer cannot supply a residence certificate to him: Rule 21AB(3) and (4) give the Form 10FA application and the Form 10FB certificate only to an assessee 'being a resident in India'.

Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.