The assessee had taken an engine on lease with a foreign compnay having no permanent establishment in India. It had deducted tax at rate of 10 percent on lease rental as per provision of DTAA between India and Netherland. On appeal the Tribunal held that provisions of section 206AA cannot have overriding effect on payment made to non-resident, rate prescribed under DTAA are applicable hence no demand was payable by assessee. On appeal High Court affirmed the order of the Tribunal. (AY. 2013-14)
CIT v. Air India Ltd. (2022) 289 Taxman 492/(2023) 456 ITR 117 (Delhi)(HC). Editorial: SLP of Revenue dismissed , CIT (IT) Air India Ltd ( 2023 ) 456 ITR 139/294 Taxman 163 ( SC)
S. 206AA : Requirement to furnish Permanent Account Number-Non-Resident-Provisions cannot have overriding effect on DTAA-Rates prescribed under DTAA are applicable-DTAA-India-Netherland. [S. 2(37A)(iii), 4, 5, 9(1)(i), 90(2), 206AA(7), Art. 12(4)]