| COURT: | Delhi High Court |
| CORAM: | A. K. Chawla J, Ravindra Bhat J |
| SECTION(S): | 206AA |
| GENRE: | Domestic Tax |
| CATCH WORDS: | India-Singapore DTAA, TDS |
| COUNSEL: | Sujit Ghosh |
| DATE: | February 5, 2018 (Date of pronouncement) |
| DATE: | February 20, 2018 (Date of publication) |
| AY: | - |
| FILE: | Click here to view full post with file download link |
| CITATION: | |
| S. 206AA TDS: The requirement (pre amendment) that TDS should be deducted at 20% on payments to non-residents even though the income is chargeable to tax at a lower rate under the DTAA is not acceptable because the DTAA has primacy over the Act. S. 206AA (as it existed) has to be read down to mean that where the non-resident payee is resident in a territory with which India has a Double Taxation Avoidance Agreement, the rate of taxation would be as dictated by the provisions of the treaty | |
Having regard to the position of law explained in Azadi Bachao Andolan Vs. Union of India, (2003) 263 ITR 706 (SC) and later followed in numerous decisions that a Double Taxation Avoidance Agreement acquires primacy in such cases, 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 Government has entered into a Double Taxation Avoidance Agreement with India, the rate of taxation would be as dictated by the provisions of the treaty
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