Held that  a Double Taxation Avoidance Agreement being a sovereign document between two countries the assessee was entitled to take the benefit thereunder. Therefore, the Tribunal’s view that the Double Taxation Avoidance Agreement cannot be considered in proceedings under section 201 was untenable. Held that  amendment to the provisions of section 9(1)(vi) inserting the Explanations would not result in amendment of the Double Taxation Avoidance Agreements. The Supreme Court had held that Explanation 4 to section 9(1)(vi) was not clarificatory of the position as on June 1, 1976 and had expanded that position to include what was stated therein by the Finance Act, 2012. Explanations 5 and 6 to section 9(1)(vi) had been inserted with effect from June 1, 1976. Held that the fact that for the subsequent years in the assessee’s own case, the Tribunal had held that tax was not deductible under section 195 when payment was made to non-resident telecommunications operators was not refuted. Therefore, the payments made to non-resident telecommunications operators for providing inter-connectivity services and transfer of capacity in foreign countries was not chargeable to tax as royalty under section 9(1)(vi). Held that the Department had no jurisdiction to bring to tax income that arose from extra-territorial sources. The non-resident telecommunications operators to whom the assessee had made payments had no presence in India. The assessee’s contract was with B, a Belgium entity which had made certain arrangement with OMT for utilisation of bandwidth and B had permitted the assessee to utilise a portion of the bandwidth which it had acquired from OMT. The facilities were situated outside India and the agreement was with B, a foreign entity which did not have any permanent establishment in India. Therefore, the assessee was not liable to deduct tax at source under section 195 on the payments made to the non-resident telecommunications operators. Held that Deputy Director (International Transaction) was not right in holding that for the assessment years 2013-14 to 2015-16 the withholding of tax liability could be levied at a higher rate at 20 per cent. Held that  as a deductor the assessee was not liable for deduction of tax at source for payments made for the assessment years 2008-09 to 2012-13 on the basis of a subsequent amendment to section 9(1)(vi) whereby Explanations 5 and 6 were introduced.(AY.2008-09 to 2012-13, 2013-14 to 2015-16)