TMI Blog2018 (4) TMI 516X X X X Extracts X X X X X X X X Extracts X X X X ..... re 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 - I.T.A. Nos. 3554, 3555 & 3556/Ahd/2016 - - - Dated:- 9-4-2018 - Shri Mahavir Prasad, Judicial Member And Shri, Manish Borad, Accountant Member Appellant by : Shri V. K. Singh, D.R. Respondent by : Shri Ira Kapoor, A.R. ORDER Per Mahavir Prasad, Judicial Member These three captioned appeals have been filed at the instance of the revenue against the separate appellate order of the Commissioner of Income Tax(Appeals)-8, Ahmedabad [CIT(A) in short] dated 04/10/2016 arising in the order passed under s.154 of the Income Tax Act, 1961 (hereinafter referred to as the Act ) dated 08/04/2015 relevant to Assessment Year (AY) 2011-12, 2012-13 2013-14 respectively. 2. Since in all three appeals issues and grounds are common only figures and assessment years are different. Therefore, for the sake of convenience, we would like to dispose of these three appeals altogether. 3. In ITA No.3554/Ahd/2016 for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to an agreement with the Government of any country outside India or specified territory outside India, as the case may be, under sub-section (1) for granting relief of tax, or as the case may be, avoidance of double taxation, then, in relation to the assessee to whom such agreement applies, the provisions of this Act shall apply to the extent they are more beneficial to that assessee. 6. In order to get the benefit of tax treaties, non-resident are required to share Tax Residency Certificate ( TRC'), or otherwise the normal rate of Tax as per the Act would apply. SEC has obtained TRC, on the basis of which TDS is deducted as per the Treaty Rate. The copy of TRC is submitted vide Annexure-1. 7. This appeal lies against the Intimation u/s.200A r.w.s. 154 from CPC-TDS vide CPC reference number TDS/1011/27Q/D/100014342031 dated 8-Apr-15. In the aforesaid Intimation, CPC-TDS has observed that the appellant has short deducted by 10% while making payment to SEC. A tax demand on short deduction of TDS of ₹ 3,12,645/- is also raised on the appellant along with interest on short deduction of TDS of ₹ 1,53,174/-. Being aggrieved of the said demand, the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (6) Where the Permanent Account Number provided to the deductor is invalid or does not belong to the deductee, it shall be deemed that the deductee has not furnished his Permanent Account Number to the deductor and the provisions of sub-section (1) shall apply accordingly. 9. The purpose behind introducing S. 206AA(1) has been stated in the Memorandum explaining the provision of the Finance (No. 2) Bill, 2009 as under: d. Improving compliance with provisions of quoting PAN through the TDS regime. Statutory provisions mandating quoting of Permanent Account Number (PAN) of deductees in Tax Deduction at Source (TDS) statements exist since 2001 duly backed by penal provisions. The process of allotment of PAN has been streamlined so that over 75 lakh PANs are being allotted every year. Publicity campaigns for quoting PAN are being run since the last three years. The average time of allotment of PAN has come down to 10 calendar days, Therefore, non-availability of PAN has ceased to be an impediment. In a number of cases, the non-quoting of PAN's by deductees is creating problems in the processing of return of income and in granting credit for tax deducted at source, l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in India. 16. In this regard, ld. AR cited an order of co-ordinate bench in ITA Nos.2244, 2245 2246/Ahd/2016, in which, similar matter was dismissed with following observation: 5. We find that, in the case of DDIT Vs Serum Institute of India Pvt. Ltd. [(2015) 40 ITR Trib 684 (Pune)], a coordinate bench of the Tribunal has, inter alia, observed as follows: 7. We have carefully considered the rival submissions. Section 206AA of the Act has been included in Part B of Chapter XVII dealing with Collection and Recovery of Tax Deduction at source. Section 206AA of the Act deals with requirements of furnishing PAN by any person, entitled to receive any sum or income on which tax is deductible under Chapter XVII-B, to the person responsible for deducting such tax. Shorn of other details, in so far as the present controversy is concerned, it would suffice to note that section 206AA of the Act prescribes that where PAN is not furnished to the person responsible for deducting tax at source then the tax deductor would be required to deduct tax at the higher of the following rates, namely, at the rate prescribed in the relevant provisions of this Act; or at the rate/rates in f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reme Court in the case of Azadi Bachao Andolan and Others (supra). Thus, in so far as the applicability of the scope/rate of taxation with respect to the impugned payments make to the non-residents is concerned, no fault can be found with the rate of taxation invoked by the assessee based on the DTAAs, which prescribed for a beneficial rate of taxation. However, the case of the Revenue is that the tax deduction at source was required to be made at 20% in the absence of furnishing of PAN by the recipient non-residents, having regard to section 206AA of the Act. In our considered opinion, it would be quite incorrect to say that though the charging section 4 of the Act and section 5 of the Act dealing with ascertainment of total income are subordinate to the principle enshrined in section 90(2) of the Act but the provisions of Chapter XVII-B governing tax deduction at source are not subordinate to section 90(2) of the Act. Notably, section 206AA of the Act which is the centre of controversy before us is not a charging section but is a part of a procedural provisions dealing with collection and deduction of tax at source. The provisions of section 195 of the Act which casts a duty on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view of the matter, and respectfully following the binding judicial precedents, we approve the conclusions arrived at by the CIT(A) and decline to interfere in the matter. 7. In the result, the appeals are dismissed. 17. In ITA No.792/PN/2013, Bench dismissed the appeal of the revenue with following observation: 7. We have carefully considered the rival submissions. Section 206AA of the Act has been included in Part B of Chapter XVII dealing with Collection and Recovery of Tax - Deduction at source. Section 206AA of the Act deals with requirements of furnishing PAN by any person, entitled to receive any sum or income on which tax is deductible under Chapter XVII-B, to the person responsible for deducting such tax. Shorn of other details, in so far as the present controversy is concerned, it would suffice to note that section 206AA of the Act prescribes that where PAN is not furnished to the person responsible for deducting tax at source then the tax deductor would be required to deduct tax at the higher of the following rates, namely, at the rate prescribed in the relevant provisions of this Act; or at the rate/rates in force; or at the rate of 20%. In the present ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt in the case of Azadi Bachao Andolan and Others (supra). Thus, in so far as the applicability of the scope/rate of taxation with respect to the impugned payments make to the nonresidents is concerned, no fault can be found with the rate of taxation invoked by the assessee based on the DTAAs, which prescribed for a beneficial rate of taxation. However, the case of the Revenue is that the tax deduction at source was required to be made at 20% in the absence of furnishing of PAN by the recipient non-residents, having regard tosection 206AA of the Act. In our considered opinion, it would be quite incorrect to say that though the charging section 4 of the Act and section 5 of the Act dealing with ascertainment of total income are subordinate to the principle enshrined in section 90(2) of the Act but the provisions of Chapter ITA Nos.1601 to 1604/PN/2014 XVII-B governing tax deduction at source are not subordinate to section 90(2) of the Act. Notably, section 206AA of the Act which is the centre of controversy before us is not a charging section but is a part of a procedural provisions dealing with collection and deduction of tax at source. The provisions of section 195 of the Act whi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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