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2017 (11) TMI 562 - AT - Income TaxTDS u/s 195 - default under section 201(1) & 201(1A) of the Act for not deducting tax while making remittance to non-residents - withholding of tax - PE in India - commission paid to export commission agents - Held that:- The issue in question is covered, in favour of the assessee, by the decision of the co-ordinate bench in the case of DCIT vs. Welspun Corp Ltd [2017 (1) TMI 1084 - ITAT AHMEDABAD] Commission payments made to the non resident agents did not have any taxability in India, even under the provisions of the domestic law i.e. Section 9. Once we come to the conclusion that the income embedded in these payments did not have any tax implications in India, no fault can be found in not deducting tax at source from these payments or, for that purpose, even not approaching the Assessing Officer for order under section 195. In our considered view, the assessee, for the detailed reasons set our above, did not have tax withholding liability from these payments. As held by Hon’ble Supreme Court in the case of GE India Technology Centre Pvt Ltd Vs CIT [2010 (9) TMI 7 - SUPREME COURT OF INDIA] payer is bound to withhold tax from the foreign remittance only if the sum paid is assessable to tax in India. The assessee cannot, therefore, be faulted for not approaching the Assessing Officer under section 195 either. As regards the withdrawal of the CBDT circular holding that the commission payments to non resident agents are not taxable in India, nothing really turns on the circular, as de hors the aforesaid circular, we have adjudicated upon the taxability of the commission agent’s income in India in terms of the provisions of the Income Tax Act as also the relevant tax treaty provisions.
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