2026 (4) TMI 729

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....ing u/s 154 of the Income Tax Act. 2. The brief facts of the case are that the assessee had uploaded Statement of tax deduction at source in Form No. 27Q for Quarter-2 of Financial Year (F.Y.) 2020-21, wherein it had furnished details of TDS made u/s. 195 of the Act, in respect of payment of dividend of Rs. 21,15,000/- to its shareholders namely M/s Basswood Holdings Limited, a company tax resident of Mauritius. The statement was initially processed by CPC-TDS u/s. 200A of the Act on 01.09.2020 and was subsequently rectified u/s. 154 of the Act vide order dated 13.11.2020 raising demand of Rs. 3,26,770/- on account of short deduction of TDS and interest thereon. 3. Aggrieved with the rectification order passed by CPC-TDS, the assessee....

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.... 4. The Ld CIT(A) failed to appreciate that the non-resident shareholders had duly furnished valid Tax Residency Certificate (TRC) and Form No. 10F and thereby fully complying with the conditions laid down under Section 90(4) and 90(5) of the Act and hence entitled to the benefits of the applicable DTAA 5 The Ld CIT(A) erred in ignoring the binding provisions of Article 10 of DTAA between India and Mauritius, which clearly provide for TDS on dividend income at a concessional rate where the beneficial owner holds more than 10% of the capital of the company paying the dividend. 6. The Ld. CIT(A) failed to appreciate that your appellant had correctly deducted tax at source (TDS) at 5% on dividend payments of Rs 21,15,000/-....

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....a, Smt. Ananya Kulshresth, the Ld. SR-DR, submitted that the assessee did not furnish the Form No. 10F as well as the tax residency certificate of the deductee, either before CPC-TDS or before the Ld. Addl. CIT(A). In the absence of these details the assessee was not entitled to take benefit of the beneficiary provision of DTTA between India and Mauritius. She, therefore, supported the order of the Ld. Addl. CIT(A). 7. We have considered the rival submissions. There is no dispute to the fact that the dividend was paid by the assessee to its shareholder who was resident of Mauritius. There is also no dispute to the fact that the deductee was eligible to claim beneficial provision of DTTA between India and Mauritius as per which the divide....