TaxTMI 
TaxTMI 
2020 (8) TMI 849
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.... the applicability of provisions of section 206AA of the Income-tax Act,1961 ['the Act' for short] to the payments made to non-resident entities. 2. We heard the parties and perused the record. The provisions of section 206AA of the Act was introduced from financial year 2010-11 and it requires every tax payer who receives taxable income to furnish his PAN number to the payer of income. If the recipient of income does not furnish PAN number, then payment so received shall suffer TDS at higher rate as specified in section 206AA of the Act. In all these cases, the A.O. had also invoked section 206AA of the Act while initiating proceedings u/s 201(1) and 201(1A) of the Act. The Ld. CIT(A) held that section 206AA of the Act is not appl....
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....t of exhibition fees, both payments had been made to the non-residents (Tax residents of Germany) and therefore the DCIT passed an order u/s. 201(1) & 201(1A) of the Income-tax Act, 1961 [the Act] dated 31.03.2018 holding the assessee to be an assessee in default for nondeduction of tax at source. The rate of tax was also applied by the DCIT @ 21.115% in terms of section 206AA of the Act at a higher rate because of the provisions of Sec.206AA of the Act. Section 206AA was introduced from FY 2010-11. Section 206AA requires every taxpayer who receives taxable income to furnish their PAN to the payer of such income. This applies to both the resident as well as non-resident recipients. The payments in case of residents would include salary, ren....
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....tute of India Ltd. in ITA No.792/PN2013. Aggrieved by the aforesaid part of the order of the CIT(Appeals) allowing relief to the assessee, the revenue has preferred the present appeal before the Tribunal. 5. We have heard the rival submissions. At the time of hearing it was not disputed that the issue raised by the revenue in its appeals are already decided by a Special Bench of ITAT, Hyderabad. The issue regarding the applicability of provisions of section 206AA of the Act, in cases of tax to be deducted at source, when the income is exigible to tax under DTAA and the payees are unable to provide valid Permanent Account Numbers, came up for consideration before the Special Bench, ITAT Hyderabad in the case of Nagarjuna Fertilizers & Chemi....
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.... Special Bench held that DTAA overrides the Act, even if it is inconsistent with the Act. DTAAs are entered into between two nations in good faith and are supposed to be interpreted in good faith. Otherwise it would amount to the breach of Article 253 of the constitution. 8. The Hon'ble Delhi High Court in the case of Danisco India Private Limited Vs. Union Of India & Ors. (Delhi High Court) in W.P.(C) 5908/2015 Judgement/Order dated 05/02/2018 held that where reciprocating states mutually agree upon acceptable principles for tax treatment, the provision in Section 206AA (as it existed) has to be read down to mean that where the deductee i.e., the overseas resident business concern conducts its operation from a territory, whose Govern....