Case Law Details
Infosys Limited Vs DCIT (ITAT Bangalore)
The relevant ground with regard to the above issue are grounds 9.1 to 9.3. The Special Bench of the Tribunal in the case of Nagarjuna Fertilizders and Chemicals Ltd. v. ACIT reported in (2017) 78 taxmann.com 264 had held if rate of tax applicable under DTAA is lower than 20% tax rate prescribed u/s 206AA of the Act, TDS has to be deducted at such lower rate even if non-resident deductee fails to furnish its PAN. Further, the Hon’ble Delhi High Court in the case of Danisco India P. Ltd. v. UOI reported in (2018) 90 taxmann.com 295 (Delhi) had held that provisions of DTAA override section 206AA of the Act. In view of the above cited judicial pronouncements, we hold that the applicable TDS on subcontracting charges paid to Infosys China should be considered at 10% as per the India-China DTAA instead of 20% as per section 206AA of the I.T.Act. It is also to be noted that while passing the order u/s 201(1) and 201(1A) of the Act for assessment year 2012-2013, the Assessing Officer has calculated TDS liability at 10% as per the Indo-China DTAA.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
These appeals at the instance of the assessee are directed against two orders of the CIT(A) and are pertaining to assessment years 2011-2012 and 2012-2013 (for assessment year 2011-2012, the CIT(A)’s order is dated 28.11.2013 and for assessment year 2012-2013, the CIT(A)’s order is dated 24.03.2014). The orders of the CIT(A) arise out of orders passed u/s 201(1) and 201(1A) of the I.T.Act. Common issues are raised in these appeals, hence, they were heard together and are being disposed of by this consolidated order.
2. The adjudication of appeal for assessment year 20112012 will apply mutatis mutandis for disposal of appeal for assessment year 2012-2013. Therefore, we shall adjudicate first IT(IT)A No.4/Bang/2014 pertaining to assessment year 2011-2012.
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