The ITAT held that where a domestic company declares,...

The ITAT held that where a domestic company declares, distributes, or pays dividends to non-resident shareholders, attracting Additional Income-tax (Tax on Distributed Profits) u/s 115-O of the Act, such additional income tax payable by the domestic company shall be at the rate mentioned in Section 115-O and not at the rate applicable to the non-resident shareholders as per the relevant DTAA. The ITAT was conscious of the sovereign's prerogative to extend treaty protection to domestic companies paying dividend distribution tax through DTAAs. However, the domestic company can claim the benefit of the DTAA only if the Contracting States intend to extend such treaty protection. The decision was against the assessee.