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2019 (10) TMI 262 - HC - Income TaxTDS u/s 195 - Payment for services received by the respondent outside India - Permanent Establishment (PE) in India - Indo-China DTAA - HELD THAT:- Application of DTAA which results in no income arising for the service providers in India is a concluded issue. Therefore, the occasion to examine Section 195 of the Act in these facts would not arise. No occasion to deduct tax at source would arise in the absence of any income in the hands of the service providers outside India in view of Section 195 of the Act. Even otherwise a retrospective amendment cannot cast an obligation to deduct tax when not in force at the relevant time i.e. when payment was made. This Court in Commissioner of Income Tax V/s. M/s. NGC Networks (India) Pvt. Ltd. [2018 (5) TMI 1148 - BOMBAY HIGH COURT] has held that a party cannot be called upon to perform an impossible act i.e. to comply with the provision which was not in force at the relevant time. Admittedly, the Explanation if applicable is introduced later by a retrospective amendment. Thus, there could be no obligation to deduct tax at source when the payments have been made to the service providers abroad in the absence of a specific provision at the time when the payments were made. - Decided against revenue
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