The Ahmedabad bench of Income Tax Appellate Tribunal (ITAT) has granted relief to Adani Wilmar by dismissing 18 appeals filed by the income tax department.
In the intimation passed by learned AO dated the 03-08-2020, he had invoked section 206AA of the Act and held that the assessee company was under an obligation to deduct higher rate of TDS in case of non-availability of PAN of the nonresident payee. The assessee company, during the period under consideration had made payments to various non-resident parties and had deducted TDS as
per the rate mentioned in the Treaty between India and respective countries or as per the rate mentioned in the Act, whichever was more beneficial to the assessee.
An intimation under section 154 of the Act for the first quarter of financial year 2010-11 was issued by the Asst Commissioner of Income Tax, Centralised Processing Cell, TDS (AO) to theassessee on account of short deduction of TDS on the ground that in case of payments where PAN of the non—resident parties was not available, the assessee was required to deduct tax under section 206AA of the Act and there was short deduction of TDS in case where TDS was deducted at the rate applicable under the respective Tax Treaty.
The Department has 18 appeal against the aforesaid additions deleted CIT(Appeals) related to various annual years.
Biren Shah, appeared for the assessee and Atul Pandey, appeared for the department.
The Delhi Bench of Annapurna Gupta, (Accountant Member) and Siddhartha Nautiyal, (Judicial Member) dismissed the18 appeals filed by the department referring various decisions passed by the High Court, the SpecialBench of the ITAT and decision in assessee’s own case for assessment year 2016-17, in the same issue observed that,
“CIT(Appeals) has not erred in facts and in law in holding that in case
of payments made to nonresidents,the assessee was entitled to deduct taxes at source at the ratesapplicable in the respective Tax Treaties in case PAN of non-resident payeeis not available. In the instant facts, it is not the allegation of the Departmentthat taxes have not been deducted at source by taking recourse to relevantclauses of the Tax Treaty enabling the assessee not to deduct tax at source inrespect of payments made to non-resident payees.” “In the instant facts, the assessee has deducted taxes at the beneficial rate of 10% as applicable in therespective Tax Treaties in respect of all payments made to non-resident payees.”
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