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2017 (5) TMI 1309 - ITAT HYDERABADShort deduction of TDS - Non residents not having PAN - TDS @10% or 20% - invoking the provisions of Section 206AA - Held that:- The provisions of DTAA prevail over the provisions of the Income Tax Act, 1961. In the case on hand, the appellant deducted tax at source at 10% of the payments made u/s 195 to the non residents relying on DTAAs prevailing with the countries in which the deductees are residing. While processing these returns, as the PAN of such deductees was not mentioned in the returns, higher rate of tax, i.e., 20% was applied, as per provisions of section 206AA. At the same time, there cannot be any doubt over the claim of the appellant that provisions of DTAA override the provisions of Income Tax Act, 1961. However, it appears that there is no channel available to the appellant to put this stand before the Assessing Officer while processing the TDS return. As seen from the list of deductees and the PANs now made available for both the assessment years, the deductees are mostly from USA, China, Korea, Finland and Italy. DTAAs are available with all these five countries. Hon'ble Supreme Court in the case of CIT Vs. P.V.A.L. Kulandagan Chettiar (Dead) Through LRs [2004 (5) TMI 8 - SUPREME Court] where it is clearly reiterated that the provisions of DTAA prevail over the provisions of I.T. Act, 1961. - Decided against revenue
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