DTAA overrides the Act, even if it is Inconsistent with the Act

DCIT Vs Bharath Fritz Werner Ltd. (ITAT Bangalore) The issue under consideration is whether the assessee has to deduct tax at source at the rates prescribed in section 206AA in case the payees are unable to furnish their PANs, even if tax liability arises out of the treaty? In the present case, the rate of tax at which TDS should be made by the assessee is 10% in accordance with the Treaty for Avoidance of Double Taxation between India and Germany (DTAA) and not at the higher rate of tax @ 20% by invoking the provisions of section 206AA of the Act. This submission was accepted by the CIT(A). A...