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Brief Facts: Payment is being made by a resident to a non resident for deputing its engineer for rendering services in India for about a short period of ten days. The foreign entity does not have any operations in India and also no PAN in India. Also, the payment is to be made net of taxes in India. There is AADT between India and the country of the foreign entity, as per which the rate of tax for fee for technical services is 10%. 

Queries:  1. What rate should be applied for TDS, is it as per AADT or as per Section 206AA ?

2. If it is as per AADT at 10%, is 10% to be applied or are SC,EC and SHEC have also to be considered ?

Request to consider following observation: In case it is as per Section 206AA, there would be a substantial burden and undue hardship on the payer.  It is a common practice to obtain technical services from entities abroad which do not have PAN in India. In such cases, if 20.6% is applicable and the same is grossed up, the rate would be a substantial higher of 25.95% resulting in substantially higher  liability in the hands of the payer.

I seek esteemed clarification on the following issues:
1. Can Assessing Officer issue a generic letter seeking clarifications on various issues presumably pursuant to Audit Objections, after completion of assessment u/s.143(3). Such a letter does not contain any reference to the section under which it is being issued or the purpose for which it is issued. Is it possible for the Assessing Officer to issue letters generally without reference to any section under which it is being issued?

2. Can the assessee refuse to reply, on the ground that such letter has not been issued under any provision of the Income Tax Act and hence, there is no legal requirement to reply to such a generic letter under the I.T.Act.