CHAPTER XVIII
Agreement with foreign countries or specified territory.
291. (1) The Central Government may enter into an agreement with the Government of any other country—
(a) for the granting of relief in respect of —
(i) income or wealth on which income-tax or wealth-tax, as the case may be, has been paid both under this Code and under the corresponding law in force in that country; or
(ii) income-tax or wealth-tax chargeable under this Code and under the corresponding law in force in that country to promote mutual economic relations, trade and investment;
(b) for the avoidance of double taxation of income or wealth under this Code and under the corresponding law in force in that country;
(c) for exchange of information for the prevention of evasion or avoidance of income-tax or wealth-tax chargeable under this Code or under the corresponding law in force in that country, or investigation of cases of such evasion or avoidance;
(d) for recovery of income-tax or wealth-tax under this Code and under the corresponding law in force in that country; or
(e) for carrying out any other purpose of this Code not expressly covered under clauses (a) to (d) above or the corresponding law in force in that country.
(2) The Central Government may enter into an agreement with the Government of any specified territory outside India for the purposes specified in sub-section (1).
(3) The Central Government may, by notification, make such provisions as may be necessary for implementing the agreements referred to in sub-sections (1) and (2).
(4) Any specified association in India may enter into an agreement with any specified association in the specified territory outside India for the purposes of sub-section (1) and the Central Government may by notification make such provisions as may be necessary for adopting and implementing such agreement.
(5) A person shall not be entitled to claim relief under the provisions of the agreement unless a certificate of his being a resident in the other country or specified territory is obtained by him from the tax authority of that country or specified territory, in such form as may be prescribed.
(6) The provisions of this Code shall not be regarded as discriminatory against the foreign company merely on the consideration that the liability of the foreign company to pay tax is calculated at a rate higher than the rate at which the liability of a domestic company is calculated.
(7) Any term used but not defined in this Code or in the agreement referred to in subsections (1), (2) or sub-section (4) shall, unless the context otherwise requires, and is not inconsistent with the provisions of this Code or the Agreement, have the meaning assigned to it in the notification issued by the Central Government.
(8) Where the Central Government has entered into an agreement under sub-section (1) or sub-section (2), or has adopted an agreement entered into by the specified association under sub-section (4), as the case may be, then the provisions of this Code shall apply in relation to the assessee to whom such agreement applies, to the extent they are more beneficial to him.
(9) Notwithstanding anything in sub-section (8), the provisions of this Code relating to—
(a) General Anti-Avoidance Rule under section 123;
(b) levy of Branch Profit Tax under section 111; or
(c) Control Foreign Company Rules referred to in the Twentieth Schedule,
shall apply to the assessee referred to in sub-section (8), whether or not such provisions are beneficial to him.
