Agreement for Exchange of Information With Respect To Taxes with Isle of Man Notification Issued On 13-5-2011

WHEREAS, an Agreement between the Government of Republic of India and the Government of the Isle of Man for the Exchange of Information with respect to taxes was signed at London on the 4th day of February, 2011;

AND WHEREAS, the date of entry into force of the said Agreement is the 17th day of March, 2011, being the date of later of the notifications of completion of the procedures as required by the respective laws for entry into force of the said Agreement, in accordance with paragraph 2 of article 13 of the said Agreement;

AND WHEREAS, sub-paragraph (a) of paragraph 2 of article 13 of the said Agreement provides that the provisions of the said Agreement shall have effect for criminal tax matters on that date and sub-paragraph (b) of paragraph 2 of article 13 of the said Agreement provides that the provisions of the said Agreement shall have effect for all other matters covered in article 1, on that date, but only in respect of taxable periods beginning on or after the date of signature of this Agreement or, where there is no taxable period, all charges to tax arising on or after the date of signature;

NOW, THEREFORE, in exercise of the powers conferred by section 90 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby directs that all the provisions of the Agreement between the Government of Republic of India and Government of the Isle of Man for the Exchange of Information with respect to taxes, as set out in the Annexure hereto, shall be given effect to in the Union of India for criminal tax matters immediately and for all other matters covered in article 1, on 17th day of March, 2011, but only in respect of taxable periods beginning on or after the 4th day of February, 2011 or where there is no taxable period, for all charges to tax arising on or after the 4th day of February, 2011.

Reference: Section 90 of the Income Tax Act, 1961

Agreement with foreign countries or specified territories

(1) The Central Government may enter into an agreement with the Government of any country outside India or specified territory outside India,—

 (a) for the granting of relief in respect of—

  (i) income on which have been paid both income-tax under this Act and income-tax in that country or specified territory, as the case may be, or

 (ii) income-tax chargeable under this Act and under the corresponding law in force in that country or specified territory, as the case may be, to promote mutual economic relations, trade and investment, or

 (b) for the avoidance of double taxation of income under this Act and under the corresponding law in force in that country or specified territory, as the case may be, or

 (c) for exchange of information for the prevention of evasion or avoidance of income-tax chargeable under this Act or under the corresponding law in force in that country or specified territory, as the case may be, or investigation of cases of such evasion or avoidance, or

 (d) for recovery of income-tax under this Act and under the corresponding law in force in that country or specified territory, as the case may be,

and may, by notification in the Official Gazette, make such provisions as may be necessary for implementing the agreement.

(2) Where the Central Government has entered into an agreement with the Government of any country outside India or specified territory outside India, as the case may be, under sub-section (1) for granting relief of tax, or as the case may be, avoidance of double taxation, then, in relation to the assessee to whom such agreement applies, the provisions of this Act shall apply to the extent they are more beneficial to that assessee.

The following sub-section (2A) shall be inserted after sub-section (2) of section 90 by the Finance Act, 2012, w.e.f. 1-4-2013:

(2A) Notwithstanding anything contained in sub-section (2), the provisions of Chapter X-A of the Act shall apply to the assessee, even if such provisions are not beneficial to him.

(3) Any term used but not defined in this Act or in the agreement referred to in sub-section (1) shall, unless the context otherwise requires, and is not inconsistent with the provisions of this Act or the agreement, have the same meaning as assigned to it in the notification issued by the Central Government in the Official Gazette in this behalf.

The following sub-section (4) shall be inserted after sub-section (3) of section 90 by the Finance Act, 2012, w.e.f. 1-4-2013:

(4) An assessee, not being a resident, to whom an agreement referred to in sub-section (1)
applies, shall not be entitled to claim any relief under such agreement unless a certificate, containing such particulars as may be prescribed, of his being a resident in any country outside India or specified territory outside India, as the case may be, is obtained by him from the Government of that country or specified territory.

Explanation 1.—For the removal of doubts, it is hereby declared that the charge of tax in respect of a foreign company at a rate higher than the rate at which a domestic company is chargeable, shall not be regarded as less favourable charge or levy of tax in respect of such foreign company.

Explanation 2.—For the purposes of this section, “specified territory” means any area outside India which may be notified as such by the Central Government.

Explanation 3.—For the removal of doubts, it is hereby declared that where any term is used in any agreement entered into under sub-section (1)
and not defined under the said agreement or the Act, but is assigned a meaning to it in the notification issued under sub-section (3) and the notification issued thereunder being in force, then, the meaning assigned to such term shall be deemed to have effect from the date on which the said agreement came into force.

 

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