TaxTMI 
TaxTMI 
2018 (11) TMI 120
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....that the assessee company filed statement of deduction of tax at source in Form 27Q for 2nd and 3rd quarter of the Asstt. Year 2011-12. The Income-tax Officer (TDS) (International Taxation), Ward 3(1), New Delhi after examining Form 27Q issued intimation u/s 200A of the Income-tax Act, 1961 ("the Act") wherein it was pointed out that there was a short deduction of tax at source and accordingly demand of Rs. 1,19,500/- comprising Rs. 1,00,419/- on account of short deduction of tax u/s 201 of the Act and Rs. 19,081/- on account of interest u/s 201(1A) of the Act for the 2nd Quarter and demand of Rs. 2,71,020/- comprising of Rs. 2,37,738/- on account of short deduction of tax u/s 201 of the Act and Rs. 33,280/- on account of interest u/s 201(1....
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....tes 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. It is the argument of the Ld. AR that the issues that is substantially involved in these appeal are - 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 nonresidents whether the tax has to be charged as per Secti....
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....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 over the general ....
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....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., (2009) 312 ITR 225 (....
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....y 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. A coordinate bench of this Tribunal in the case of Emmsons International Ltd. Vs DCIT, CPC-TDS, Ghaziabad (2012) 93 Taxmann.com 487 (Delhi-Trib.) while respectfully following the decision of the Hon'ble jurisdictional High Court in the case of M/s Danisco India (P) Ltd. Vs Union of India (2018) 250 Taxman 500 (Del) quashe....