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TMI Blog2017 (2) TMI 642X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that, where the tax has been deducted on the strength of the beneficial provisions of DTAAs, in that case, the provisions of section 206AA of the act cannot be invoked because section 90(2) of the act provides that the provisions of the act shall apply to the extent they are more beneficial to the assessee. In view of the above stated facts and legal findings, in our considered opinion the ld. CIT(A) has not substantiated the sustaining of impugned demand raised by the assessing officer ,therefore, we allow the appeal of the assessee. - ITA No. 947/Ahd/2016 - - - Dated:- 6-2-2017 - R. P. Tolani, Judicial Member And Shri Amarjit Singh, Accountant Member For The Revenue : Shri Dileep Kumar, Sr. D.R. For The Assessee : Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they are decided together as under:- 3. In this case during the year the assessee has received legal services from Kracht+Strohe Rechtsanwalte Koln, a law firm having principal place of business at Germany. The assessee had remitted a sum amounting EURO 10,395/- equivalent to Indian ₹ 7,38,045/- on December, 2012. In accordance with article 12 fee for technical services of DTAA between India and Germany, the assessee had deducted TDS @ 10% to the amount of ₹ 73,804/- and deposited the same on 5th January, 2013. Subsequently, the DCIT CPC TDS, Vaishali, Gajiabad raised a demand of ₹ 90,750/- including interest of ₹ 12512/- on a/c. on short deduction of tax by the assessee. The DCIT CPC TDS, Vaishali, Gajiabad pass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll as rectification order dt: 01.03.2014. In the present appeal the core facts are the same as were present in the appellant's own case in Appeal No. CIT(A)/VLS/250/13-14 vide order dt:28.05.2015, which was decided against the appellant by following an earlier decision on the same taken in ITA NO.CIT(A)/VLS/215/13-14 which is enumerated below: This is a case of short deduction of TDS. During the year the appellant remitted as per terms of agreement an amount of Euro 5 Lakhs equivalent to Indian ₹ 4,23,00,000/- (Net of Tax) to a German Limited Liability Company M/s MSA AUER Gmbh(MSA), towards purchase of Technical Know which according to the appellant represents purchase of capital asset not liable to deduction of tax at sou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urnish the PAN and such furnishing would be possible only where the recipient required to obtain -PAN. Thus, where the non-residents are not obliged to obtain a PAN, the requirement of furnishing the same view of Section 206AA of the Act does not arise. In the appellant's case MSA is a nonresident and therefore the submissions of PAN to the appellant and consequent applicability of section 206AA does not arise. I have given my careful thoughts to the submissions of the appellant along with the decisions relied upon and do not agree with him. On the issue of deduction of TDS at higher rate even in case of non-residents, CBDT has issued a press release No.402/92/2006- MC(04 OF 2010) dt:20.01.2010. The relevant portion of this press ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that date. The above is applicable to the case of the appellant also. In view of it the appellant is at default for deducting TDS at a lower rate therefore, the action of the DOT CPC-TDS for creating a demand of ₹ 48,87,990/- is confirmed and the ground of appeal of the appellant is dismissed. However, the appellant in the written submission stated that subsequent to the above decision given by CIT(A) vide order dt:28.05.2015, the Bangalore Bench of ITAT in the case of Infosys BPO Ltd. vide order dt:29.06.2015 has held that provisions of IT Act cannot override the provisions of the Double Taxation Avoidance Agreement (DTAA) and the tax liability of the non-resident cannot exceed the rate prescribed in the relevant DTAA. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liable to deduct tax at higher rate in all transactions not having PAN of the deductee w.e.f. from 1st April, 2010. In this connection we have perused the decision of the Banglore Bench of ITAT decision dated 29/06/2015 in the case of Infosys BPO Ltd in which it was held that the provisions of IT Act, 1961 cannot override the provisions of DTAA. 6.1 We also find that the Co-ordinate Bench of the ITAT Ahmedabad in the case of the assessee itself pertaining to assessment year 2014-05 vide ITA No. 1974/Ahd/2015 decided the identical issue in favour of the assessee on 30/09/2019. The relevant part of the decision is reproduced as under:- [4] It is only elementary that, under the scheme of the Income Tax Act 1961- as set out under sect ..... X X X X Extracts X X X X X X X X Extracts X X X X
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