Amendment of section 90A.
32. In section 90A of the Income-tax Act,—
(a) after sub-section (2), the following sub-section shall be inserted with effect from the 1st day of April, 2013, namely:—
“(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.”;
(b) after sub-section (3) and before Explanation 1, the following sub-section shall be inserted with effect from the 1st day of April, 2013, namely:—
“(4) An assessee, not being a resident, to whom the 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 specified territory outside India, is obtained by him from the Government of that specified territory.”;
(c) after Explanation 2, the following Explanation shall be inserted and shall be deemed to have been inserted with effect from the 1st day of June, 2006, namely:—
“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.”.
Notes on Clauses:
Clause 32 of the Bill seeks to amend section 90A of the Income-tax Act relating to adoption by Central Government of agreement between specified associations for double taxation relief.
The existing provisions of the aforesaid section 90A provides that any specified association in India may enter into agreement with any specified association in a specified territory outside India and the Central Government may, by notification in the Official Gazette, make the necessary provisions for adopting and implementing such agreement for grant of double taxation relief, for avoidance of double taxation or exchange of information for the prevention of evasion of avoidance of income-tax or for recovery of income-tax. It further provides that in relation to any assessee to whom the agreement referred to in the said section applies, the provisions of the Income-tax Act shall apply to the extent they are more beneficial to the assessee. It also provides that any term used but not defined in the income-tax Act or the said agreement shall have the same meaning as assigned to it in the notification issued by the Central Government, unless the context otherwise requires and it is not inconsistent with the provisions of the Income-tax Act or the said agreement.
It is proposed to insert a new sub-section (2A) in the aforesaid section 90A so as to provide that the provisions of newly inserted Chapter X-A shall apply even if such provisions are not beneficial to the assessee.
It is further proposed to insert a new sub-section (4) in the aforesaid section so as to provide that an assessee, not being a resident, to whom the agreement referred to in sub-section (1) applies, shall not be entitled to claim any relief under such agreement unless a certificate, containing prescribed particulars, of his being a resident in any specified territory outside India is obtained by him from the Government of that specified territory.
These amendments will take effect from 1st April, 2013 and will, accordingly, apply in relation to assessment year 2013-2014 and subsequent assessment years.
The existing sub-section (3) of the aforesaid section provides that any term used but not defined in the Income-tax Act or in the said agreement shall have the same meaning as assigned to it in the notification issued by the Central Government, unless the context otherwise requires and it is not inconsistent with the provisions of the Income-tax Act or the said agreement.
It is proposed to insert an Explanation in the aforesaid section so as to provide that for the removal of doubts, it is hereby declared that any term used in any agreement, where such agreement is entered into under sub-section (1) and not defined under the 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.
This amendment will take effect retrospectively from 1st June, 2006.
