TMI Blog2020 (4) TMI 480X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led return of income TDS for Q-2 to Q-4 of FY 2010-11 (AY:2011-12) on 06-06-2011. The TDS return were in respect of TDS payment made to non-resident. Admittedly, the Assessee did not furnish Permanent Account Number (PAN) of non-resident with the Income Tax Department, Government of India, to whom the payments were made. As per the provisions of sec.206AA of the Income Tax Act, 1961 (Act), if the PAN of the non-resident is not mentioned in the TDS return and the payee is a non-resident then the rate at which the TDS is to be effected is 20%, as against the lesser/normal rate of TDS as per the provisions of the DTAA between India and the country of which the recipient of the payments are tax residents. While processing the TDS returns electr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of tax at source. 5. The assessee filed appeal against the intimation u/s 154 of the Act dated 11-03-2018 for Q-3 4 of AY 2011-12 and order dated 22-03-2018 for Q-2 of AY 2011-12 on 07-04-2018. It was the case of assessee that it had deducted tax at source on the payments made to non-resident as per the rates prescribed by the DTAA and that the provision of sec.206AA of the Act prescribing a higher rate of tax at source is not valid as against the provisions of DTAA. According to the assessee as per the provisions of sec.90(2) of the Act, if there is a conflict between the DTAA and the Act, provisions of DTAA will prevail and therefore, the higher rate of TDS demanded by the CPC is contrary to the provisions of section 90(2) of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he ACIT, CPC-TDS, Centralized Processing Cell (CPC) did not apply the higher rate of tax as per the provisions of Sec.206-AA of the Act. However by orders passed u/s.154 of the Act dated 11.3.2018 for Q1 to Q-3 of AY 2012-13 and order dated 15.03.2018 and 10.3.2018 and 10.3.2018 respectively for Q-1, Q-2 and Q-4 of AY 2013-14, the ACIT, CPC-TDS applied higher rate of tax as he found that the tax deducted by the assessee at source was at a lesser rate as per DTAA whereas the rate of tax that ought to have been applied was the higher rate of tax in terms of Sec.206AA of the Act. Therefore, the demand to the extent of short deduction and interest on short deduction of tax at source was raised by the CPC-TDS by the intimations u/s.154 of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in holding that the rates prescribed u/s 206AA of the Act should be applied. (ii) The Beneficial provisions of DTAA will prevail over the provisions of sec.206AA of the Act. 12. The learned counsel for the Assessee reiterated the stand of the Assessee as put forth before the revenue authorities. The ld.DR relied on the orders of ld.CIT(A). 13. We have carefully considered the rival stand of the Assessee and the revenue on the issue in the appeal. We find that the CIT(A) has rejected the appeals of the assessee on the ground that the issue whether DTAA will prevail over the provisions of sec.206AA of the Act is a debatable issue. On this issue, we find that the law as it evolved is that the Special Bench of the ITAT, Hydera ..... X X X X Extracts X X X X X X X X Extracts X X X X
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