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2018 (4) TMI 516 - AT - Income TaxShort deduction of TDS and Interest - Adoption of rates of TDS when PAN is not furnished by the deductee - DTAA benefits - Held that:- It is fact that Assessee Company is a foreign company and section 206AA, which provides to decade TDS at a higher rate because non availability of PAN are no attracted here because respondent/non-resident cannot be compelled to obtain PAN no. when they are allowable to tax in India. Where the tax has been deducted on the strength of the beneficial provisions of section DTAAs, the provisions of section 206AA of the Act cannot be invoked by the Assessing Officer to insist on the tax deduction @ 20%, having regard to the overriding nature of the provisions of section 90(2) of the Act. The CIT(A), in our view, correctly inferred that section 206AA of the Act does not override the provisions of section 90(2) of the Act and that in the impugned cases of payments made to non-residents, assessee correctly applied the rate of tax prescribed under the DTAAs and not as per section 206AA of the Act because the provisions of the DTAAs was more beneficial. Thus, we hereby affirm the ultimate conclusion of the CIT(A) in deleting the tax demand relatable to difference between 20% and the actual tax rate on which tax was deducted by the assessee in terms of the relevant DTAAs. - Decided against revenue
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