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2020 (4) TMI 480 - AT - Income TaxDemand of Short deduction of TDS through rectification order u/s 154 - TDS done as per the DTAA - whether DTAA will prevail over the provisions of sec.206AA? - debatable issue or not? - HELD THAT:- Special Bench of the ITAT, Hyderabad in the case of Nagarjuna Fertilizers and Chemicals Ltd. vs ACIT [2017 (3) TMI 81 - ITAT HYDERABAD] has held that DTAA will prevail over the provisions of sec.206AA of the Act. Therefore, the TDS done as per the DTAA is correct. Similar view has been taken in the case of Danisco India (P)Ltd.vs Union of India [2018 (2) TMI 1289 - DELHI HIGH COURT] It was the ACIT-CPC-TDS who passed the order u/s.154 of the Act and therefore if the CIT(A) is of the view that the issue was debatable then the order u/s.154 of the Act should have been cancelled by him. He dismissed the appeals of the Assessee without realizing that the order u/s.154 of the Act was passed by the ACIT-CPC-TDS and not on any application filed by the Assessee. Again the question of limitation will also go against the revenue and not against the Assessee because it was the revenue i.e., the ACIT-CPC-TDS, who passed the order u/s.154 of the Act. The law as interpreted by the judicial forums by the Hon’ble Delhi High Court on 5.2.2018 prior to the order u/s.154 of the Act passed by the ACIT-CPC-TDS supports the plea of the Assessee. In the given and facts and circumstances of the case and the legal position on the issue, we are of the view that the orders u/s.154 of the Act raising demand for short deduction of tax at source and interest thereon cannot be sustained and the same is directed to be cancelled. The appeals of the Assessee are accordingly allowed.
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