TMI Blog2018 (4) TMI 1272X X X X Extracts X X X X X X X X Extracts X X X X ..... relatable to difference between 20% and the actual tax rate on which tax was deducted by the assessee in terms of the relevant DTAAs. Appeals are allowed accordingly. - I.T.A. Nos.5124 to 5127/Del/2015 - - - Dated:- 2-4-2018 - SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER AND SHRI K. NARASIMHA CHARY, JUDICIAL MEMBER For The Appellant : Shri Suresh Kumar Gupta, CA For The Respondent : Shri S.R. Senapati, Sr. DR ORDER PER K. NARASIMHA CHARY, JM Challenging the order dated 12/06/2015 in Appeal Nos.93 to 96/14-15 passed by the learned Commissioner of Income-tax (Appeals)-41, New Delhi {for short ld.CIT(A)} for Asstt. Year 2013-14, assessee preferred these appeals. 2. Fact in brief are that the assessee is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reference at the rates applicable to the nonresident in India as per the provisions of the DTAA and Section 206AA of the Act cannot override section 90(2) of the Act. He placed reliance on the decisions reported in Azadi Bachao Andolan vs UOI (2003) 263 ITR 706 (SC), and CIT versus Ely Lily and company (2009) 312 ITR 225 (SC). Ld. DR placed reliance on the orders of the authorities below. 5. We have gone through the record in the light of the submissions on either side. At the outset it is the submission of the Ld. AR that the issue that is substantially involved in this appeal is this whether Section 206AA of the Act override the provisions of Section 90(2) of the Act and whether in cases of the payments made to non-residents, what is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 90(2) provides that the provisions of the DTAAs would override the provisions of the domestic Act in cases where the provisions of DTAAs are more beneficial to the assessee. There cannot be any doubt to the proposition that in case of non-residents, tax liability in India is liable to be determined in accordance with the provisions of the Act or the DTAA between India and the relevant country, whichever is more beneficial to the assessee, having regard to the provisions of section 90(2) of the Act. In this context, the CIT(A) has correctly observed that the Hon'ble Supreme Court in the case of Azadi Bachao Andolan and Others vs. UOI, (2003) 263 ITR 706 (SC) has upheld the proposition that the provisions made in the DTAAs will prevail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the assessee to deduct tax at source on payments to a non-resident cannot be looked upon as a charging provision. In-fact, in the context of section 195 of the Act also, the Hon'ble Supreme Court in the case of CIT vs. Eli Lily Co., (20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... correctly applied the rate of tax prescribed under the DTAAs and not as per section 206AA of the Act because the provisions of the DTAAs was more 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. As a consequence, Revenue fails in its appeals. 7. It is therefore, clear that that section 206AA of the Act does not override the provisions of Section 90(2) of the Act and that in the cases of payments made to non-residents, assessee correctly applied the rate of tax prescribed under the DTAAs and not as per Section 206 AA of the Act because the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
