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INCOME TAX (DOUBLE TAXATION RELIEF)
(UNITED KINGDOM)
RULES, 1950

Notification No. 6, dated 10th March, 1950. - In exercise of the powers conferred by section 49A of the Income-tax Act, 1922 (XI of 1922), the Central Government is pleased to make the following Rules for granting relief in respect of income on which tax has been paid both in the Provinces and the Capital of the Federation and in the United Kingdom.

1. These Rules may be called the Income-tax (Double Taxation Relief) (United Kingdom) Rules, 1950.

2. In these Rules:-

(a) "Pakistan income-tax" means income-tax and super-tax charged in accordance with the provisions of the Income-tax Act, 1922 (XI of 1922) hereinafter referred to as the said Act;

(b) "Pakistan rate of tax" means the amount of income-tax exclusive of super-tax after deduction of any relief due to a claimant under other provisions of the said Act but before deduction of any relief under these Rules, divided by his total income after deduction therefrom any income (including income from a share in an unregistered firm) exempted from tax by or under the provisions of the said Act added to the amount of sur-tax before deduction of any relief due to the claimant under these Rules divided by his total income;

(c) "United Kingdom income-tax" means income-tax and sur-tax chargeable in accordance with the provisions of the Income-tax Acts for the time being in force;

(d) "appropriate rate of United Kingdom income-tax" has the meaning assigned to that expression in section 27 of the Finance Act, 1920, as amended by the Finance Act, 1927.

3. If any person who has paid by deduction under section 18 of the Social Act or otherwise Pakistan income-tax for the year of assessment ending on the 31st day of March, 1950 or for any earlier year on any part of his income, proves to the satisfaction of the Income-tax Officer that he has paid by deduction or otherwise United Kingdom income-tax for the corresponding year in respect of the same part of his income and that the rate at which he was entitled to, and has obtained relief under the provisions of section 27 of the Finance Act, 1920, is less than the Pakistan rate of tax charged in respect of that part of his income he shall be entitled to a refund of a firm calculated on that part of his income at a rate equal to the difference between the Pakistan rate of tax or the appropriate rate of United Kingdom income-tax, whichever is less, and the rate at which be was entitled to, and obtained relief under that section.

4. (1) The application for refund of income-tax under these Rules shall be made as follows:

(i) if the applicant is resident in any Province of Pakistan or the capital of the Federation, to the Income-tax Officer of the District in which the applicant is chargeable directly to Income-tax Officer of the district in which he ordinarily resides;

(ii) if the applicant is resident outside the Provinces of Pakistan and the capital of the Federation, to the Income-tax Officer appointed by the Central Board of Revenue.

(2) Such application may be presented by the applicant in person or by a duly authorised agent or may be sent by post, and shall be in Form A appended to these Rules.

5. No claim to any refund of Pakistan income-tax under these Rules shall be allowed unless it is made within four years from the last day of the financial year commencing next after the expiry of the previous year in which the income arose accrued or was received or was deemed to have arisen, accrued or been received or was brought into the Provinces of Pakistan or the Capital of the Federation.

6. An applicant for refund under these Rules may appeal to the Appellate Assistant Commissioner of Income-tax from any order of the Income-tax Officer disallowing the claim for refund either wholly or in part.

7. The appeal shall be presented within thirty days of the date on which the order of the Income-tax Officer was communicated to the applicant and shall be in Form B, appended to these Rules.

FORM A

APPLICATION FOR RELIEF FROM DOUBLE INCOME-TAX UNDER THE INCOME-TAX
(DOUBLE TAXATION RELIEF) (UNITED KINGDOM)

RULES, 1950

I ______________________________of_______________________________ do__________________hereby state that I have paid (or under the provisions of section 49B of the Income-tax Act, 1922, must be deemed to have paid) United Kingdom income-tax and super tax amounting to £ ......... for the year ending 19 ......... an income of ......... and that Pakistan income-tax and super-tax of Rs .......... has also been paid or under the provisions of section 49B of the said Act must be deemed to have been paid on the same income/incomes from the same source amounting to Rs ......... I have obtained relief under the provisions of section 27 of the Finance Act, 1920, at the rate of ......... in accordance with the attached certificate from His Majesty's Inspector of Taxes.

I now pray for a further relief at the rate of.....amounting to Rs.........to which I am entitled, my income from all sources to which this Act applies during the "previous year" ending on the ......... 19 .......... amounting to Rs ........ only see Return of income attached already submitted.

FORM (B)

APPEAL FROM AN ORDER OF THE INCOME-TAX OFFICER DISALLOWING A CLAIM
FOR REFUND UNDER THE INCOME-TAX (DOUBLE TAXATION RELIEF)
(UNITED KINGDOM)
RULES, 1950.

The Appellate Assistant Commissioner of Income-tax.
The..............day of................19
The petition of.............of................
Post Office ............ District sheweth as follows:-

Your petitioner applied to the Income-tax Officer for a refund under the Income-tax (Double Taxation Relief) (United Kingdom) Rules, 1950, of Rs.

The Income-tax Officer has by his order dated .......................... of which a copy is attached ............ Intimation of this order was received by your petitioner on .............

Your petitioner therefore requests that the order of the Income-tax Officer may be set aside and the refund asked for may be granted.

Signed.

GROUNDS OF APPEAL
Form of Verification

I, -------------the petitioner named in the above-petition do declare that what is stated therein is true to the best of my information and belief.

Signed.

The form of appeal and the form of verification appended thereto shall be signed.

(a) in the case of an individual, by the individual himself;

(b) in the case of a Hindu undivided family, by the Manager or Karta;

(c) in the case of a company or local authority, by the principal officer;

(d) in the case of a firm, by a partner; and

(e) in the case of any other association, by a member of the association.

STATUTORY PROVISION IN THE UNITED KINGDOM FOR RELIEF FROM
UNITED KINGDOM INCOME-TAX IN RESPECT OF INCOMES SUBJECTED TO
DOMINION INCOME-TAX INCLUDING PAKISTAN INCOME-TAX VIDE
SECTION 27, FINANCE ACT, 1920.

27. (1) If any person who has paid, by deduction or otherwise, or is liable to pay, United Kingdom income-tax for any year of assessment on any part of income proved to the satisfaction of the Special Commissioners that he bas paid Dominion income-tax for that year in respect of the same part of his income, he shall be entitled to relief from United Kingdom income-tax paid or payable by him on that part of his income at a rate thereon to be determined as follows:-

(a) if the Dominion rate of tax does not exceed one-half of the appropriate rate of United Kingdom income-tax, the rate at which relief is to be given shall be Dominion rate of tax;

(b) in any other case the rate at which relief is to be given shall be one-half of the appropriate rate of United Kingdom income-tax.

(2) Where a person has not established his claim to relief under this section for any year of assessment before the first day of January in that Year, the relief shall be granted by way of repayment of tax.

(3) Where by reason of the allowance of relief under this section the rate of United Kingdom income-tax deducted from or paid in respect of any part of the income of any individual is less than the standard rate, and the rate of the relief so allowed is greater than the rate appropriate to the case of that individual, such an adjustment shall be made in allowing to that individual any relief to which he may be entitled under the provisions of this part of this Act relating to the rate of tax on the first two hundred and twenty-five pounds of taxable income as may be necessary to secure that the amount of United Kingdom income-tax finally paid or borne by him shall be equal .to the amount which would have been paid or borne if the relief under this section had in the first instance been given at the rate appropriate to his case.

(4) Notwithstanding any thing in the Rules applicable to Case IV or Case V of Schedule D or in any other provision of the Income-tax Acts, no deduction shall be made on account of the payment of Dominion Income-tax estimating income for the purposes of United Kingdom Income-tax and where income-tax has been paid or is payable in any Dominion either on the income out of which income subject to United Kingdom income-tax arises or is received or as a direct charge in respect of that income, the income so subject to United Kingdom income-tax shall be deemed to be income arising or received after deduction of Dominion income-tax and an addition shall, in estimating income for the purposes of the United Kingdom income-tax, be made to that income of the proportionate part of the income-tax paid or payable in the Dominion in respect of the income out of which that income arises or is received together with the full amount of any Dominion income-tax directly charged or chargeable in the Dominion in respect of that income:

Provided that -

(a) where any income arising or received as aforesaid consists of dividends which are entrusted to any person in the United Kingdom for payment and the Special Commissioners are satisfied that the person so entrusted is not in a position to ascertain the amount of the addition to be made under this sub-section the assessment and charge may be made on the amount of the dividends as received by the person so entrusted, but in any such case the amount of the addition shall be chargeable on the recipient of the dividends under Case IV Schedule D; and

(b) Where under the laws in force in any Dominion no provision is made for the allowance of relief from Dominion no income-tax in respect of the payment of United Kingdom income-tax, then in assessing or charging income-tax in the United Kingdom in respect of income assessed or charged to income-tax in the Dominion deduction shall be allowed in estimating income for the purpose of United Kingdom income-tax of an amount equal to the difference between the amount of the Dominion income-tax paid or payable in respect of the income and the total amount of the relief granted from the United Kingdom income-tax in respect of the Dominion income-tax for the period on the income of which the assessment or charge to United Kingdom income-tax is computed.

In this sub-section the expression "dividends" includes any interest, annuities, dividends, shares of annuities, pension, or other annual payments or sums in respect of which tax is charged under the Rules applicable to Schedule C or under Rule VII of the Miscellaneous Rules applicable to Schedule D.

(5) Where under Rules 20 of the General Rules, applicable to Schedule A, B, C, D, and E, a body of persons is entitled to deduct income-tax from any dividends tax shall not in any case be deducted at a rate exceeding the rate of the United Kingdom income tax as reduced by any relief from that tax given under this section in respect of any payment of Dominion income-tax.

(6) Where under the law in force in any Dominion provision is made for the allowance of relief from Dominion income-tax in respect of the payment of United Kingdom income-tax the obligation as to secrecy imposed by the Income-tax Acts upon persons employed in relation to Inland Revenue shall not prevent the disclosure to the authorised officer of the Government of the Dominion of such facts as may be necessary to enable the proper relief to be given in cases where relief is claimed both for United Kingdom income-tax and from Dominion income-tax.

(7) The Commissioners of Inland Revenue may from time to time make regulations generally for carrying out the provisions of this section, and may, in particular by those regulations provide:-

(a) for making such arrangements with the Government of any Dominion to which the last preceding sub-section applies as may be necessary to enable the appropriate relief to be granted;

(b) for prescribing the year which in relation to any Dominion income-tax is, for the purposes of relief under this section, to be taken as corresponding to the year assessment for the purposes of United Kingdom income-tax.

(8) In this section:-

(a) The expression "Dominion" means any British possession, or any territory which is under His Majesty's protection or in respect of which a mandate is being exercised by the Government of any part of His Majesty's dominions;

(b) The expression "United Kingdom income-tax" and "United Kingdom Sur-tax" means respectively income-tax and sur-tax chargeable in accordance with the provisions of the Income-tax Acts;

(c) The expression "Dominion income-tax" means any income-tax or sur-tax charged under any Law in force in any Dominion, if that tax appears to the Special Commissioners to correspond with United Kingdom income-tax or sur-tax.

(d) The expression "Dominion rate of tax" means the rate determined by dividing the amount of the Dominion income-tax paid for the year by the amount of the income in respect of which the Dominion income-tax is charged for that year, except that where the Dominion income-tax is charged on an amount other than the ascertained amount of the actual profits the Dominion rate of tax for the purposes of this section shall be determined by the Special Commissioners.

"The appropriate rate of United Kingdom income-tax" for any year of assessment shall be as follows:-

(a) In the case of a person whose income is chargeable at the standard rate only, a rate ascertained by dividing the amount of tax payable by him for that year in respect of his total income (before deduction of any relief granted in respect of life assurance premiums or any relief granted under the provisions of section twenty-seven of the Finance Act, 1920) by the amount of his total income less any amount by reference to which he is by virtue of sub-section (1) of section forty of the Act, granted relief from income-tax by means of a deduction of tax;

(b) In the ease of a person part of whose total income is chargeable at a rate or rates in excess of the standard rate, the sum of the following rates:-

(i) The rate which would have been the appropriate in the ease of that person if his income had been chargeable at the standard rate only; and

(ii) The rate ascertained by dividing the amount of the super-tax payable by that person for the preceding year by the amount of his total income for that year.

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