Koshy, J.

While challenging the order of the income-tax Appellate Tribunal for the assessment year 1996-97, the appellant-assessee filed this appeal with the following substantial questions of law:

“(i) Whether the provisions of Double Taxation Avoidance Agreement between India and Malta is applicable to income arising in India within the previous year relevant to assessment year 1996-97?

(ii) Whether on the facts and circumstances of the case, the Tribunal went wrong in denying the benefits of DTAA between India and Malta to the appellant.”

Before answering the questions and deciding the appeal, we may refer to the short facts of the case. The assessee is a non-resident company engaged in the business of shipping in International Traffic and registered in the Republic of Malta. The appellant, though paid income-tax due in India, filed its return of income on 25-3-1997 for the assessment year 1996-97 claiming relief available under the Double Taxation Avoidance Agreement (in short ‘DTAA’ or ‘agreement) entered into between the Republic of Malta and the Republic of India as per section 90 of the Income Tax Act (hereinafter referred to as ‘the Ac’). Appellant claimed refund o