Appeal details
Counselvise Citation
[2021] 108 COUNSELVISE.COM (IT) 2111 (ITAT-BANGALORE)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
9 month(s) 15 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
24-06-2021
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
B
Next Hearing Date
24-06-2021
Assessment Year
2016-2017
Appeal Filed On
08-09-2020
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI , JUDICIAL MEMBER IT (IT) A NO S . 658 & 659/BANG/2020 & 152 TO 155/BANG/2021 ASSESSMENT YEAR S : 2012 - 13 TO 2016 - 17 THE DEPUTY COMMISSIONER OF INCOME TAX (IT), CIRCLE 1(2), BANGALORE. VS. M/S. INFOSYS LTD., PLOT NO.44 & 97A, KONAPPANA AGRAHARA, HOSUR ROAD, ELECTRONICS CITY, PHASE I, BANGALORE 560 100. PAN: AAACI 4798L APPELLANT RESPONDENT APPELLANT BY : S HRI MUZAFF AR HUSSAIN, CIT(DR)( ITAT), BENGALURU. RESPONDENT BY : SHRI B.R. SUDHEENDRA, ADVO CATE DATE OF HEARING : 24.06 .202 1 DATE OF PRONOUNCEMENT : 24 .0 6 .202 1 O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER ALL THESE APPEALS BY THE REVENUE ARE DIRECTED AGA INST THE ORDERS OF CIT(APPEALS) WHICH IS PASSED CONSEQUENT TO THE ORDE R OF AO PASSED U/S. 248 R.W.S. 206AA OF THE INCOME-TAX ACT, 1961 [THE A CT[ FOR THE ASSESSMENT YEARS 2012-13 TO 2016-17. 2. THE COMMON GROUNDS RAISED BY THE REVENUE IN ALL THESE APPEALS ARE AS FOLLOWS:- IT(IT)A NOS. 658 & 659/BANG/2020 & 152 TO 155/BANG/2021 PAGE 2 OF 6 1. WHETHER ON FACTS AND CIRCUMSTANCES OF THE CASE , LD. CIT(A) IS JUSTIFIED IN HOLDING THAT THE OF DTAA OVE RRIDES THE PROVISION OF SEC 206AA OF THE IT ACT, 1961. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE, LD. CIT(A) IS JUSTIFIED IN NOT FOLLOWING THE DECISION O F THE HON'BLE ITAT IN THE CASE OF M/S. BOSCH LTD VS ITO REPORTED IN 141 ITD 387(2013), WHEREIN THE HON'BLE ITAT HAD CATEGORICAL LY DECIDED THAT THE PROVISIONS OF SEC 206AA HAVE OVERRIDING EF FECT OVER THE OTHER PROVISIONS OF THE ACT. 3. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE LD. CIT(A) IS JUSTIFIED IN HOLDING THAT THE DTAA PROVIS IONS OVERRIDE THE CLAUSES OF SEC 206AA OF THE IT ACT, 1961 WITHOU T APPRECIATING THE FACT THAT SECTION 90(2) OF THE IT ACT ONLY CONFERS THE BENEFICIAL APPLICABILITY OF TREATY BENEFITS, AN D AS SUCH SEC 90(2) IS OVERRIDDEN BY 206AA OF THE IT ACT, 1961. (ONLY FOR AY 2016-17} 4. WHERE ON FACTS AND CIRCUMSTANCES OF THE CASE, LD CIT (A) IS JUSTIFIED IN APP.I04 THE PROVISIONS OF RULE 37BC TO AY 2016- 17 WHEN THE SAID PROVISIONS WAS INSERTED ONLY WEF 2 4.06.2016 AND CAN NOT HAVE RETROSPECTIVE APPLICATION?. 3. IN THESE CASES, THERE WAS A DELAY IN FILING THE APPEALS AS FOLLOWS:- A.Y. DATE OF CIT(A)S ORDER DATE OF RECEIPT OF CIT(A)S ORDER DUE DATE FOR FILING THE APPEAL BEFORE THE TRIBUNAL DATE OF FILING THE APPEAL BEFORE THE TRIBUNAL NO. OF DAYS OF DELAY IN FILING THE APPEALS BEFORE THE TRIBUNAL 2012 - 13 27.1.2020 30.1.2020 30.3.2020 8.9.2020 1 6 1 DAYS 2013 - 14 27.1.2020 30.1.2020 30.3.2020 8.9.2020 16 1 DAYS 20 1 4 - 15 27.1. 2020 30.1.2020 30.3.2020 8.9.2020 1 61 DAYS 20 15 - 16 27.1.2020 30 .1.2020 30.3.2020 8.9.2020 161 DAYS 2016 - 17 27.1. 2020 30.1.2020 30.3.2020 8.9.2020 161 DAYS 2016 - 17 12.2.2020 20.2.2020 20.4.2020 8.9.2020 141 DAYS IT(IT)A NOS. 658 & 659/BANG/2020 & 152 TO 155/BANG/2021 PAGE 3 OF 6 4. THE LD. AR HAS FILED A LETTER BEFORE US STATING THAT THE DUE DATE FOR FILING THE APPEALS BEFORE THE TRIBUNAL EXPIRED AND APPEALS WERE FILED BELATEDLY AS ABOVE. IT WAS EXPLAINED THAT THE DELA Y WAS DUE TO NATIONAL LOCKDOWN DUE TO COVID-19 PANDEMIC FROM 24.3.2020 TO 31.5.2020. IT WAS SUBMITTED THAT THE DELAY MAY BE CONDONED IN VIEW OF THE EXTENSION OF LIMITATION FROM 15.3.2020 TILL 14.3.2021 BY JUDGMEN T OF THE HONBLE SUPREME COURT IN SUO MOTU WP(C) NO.3/2020 DATED 23.3.2020 W HICH WAS FURTHER EXTENDED UNTIL FURTHER ORDERS BY THE JUDGMENT DATED 27.4.2021. RELIANCE WAS ALSO PLACED ON THE TAXATION AND OTHER LAWS (REL AXATION AND AMENDMENT OF CERTAIN PROVISIONS) ACT, 2020 DATED 29 .9.2020. BEING SO, THOUGH THERE WAS A DELAY, IT CANNOT BE STATED AS BA RRED BY TIME IN FILING THE APPEALS. ACCORDINGLY, THE APPEALS ARE ADMITTED. 5. REGARDING THE ISSUE IN DISPUTE, THE ISSUE IS SQU ARELY COVERED BY THE JUDGMENT IN DCIT(IT) V. INFOSYS BPO LTD. [2015] 60 TAXMANN.COM 465 WHEREIN IT WAS HELD THAT WHERE ASSESSEE MADE ROYALT Y PAYMENTS TO NON- RESIDENTS, SINCE BENEFIT OF DTAA WAS AVAILABLE TO S AID RECIPIENTS, THEIR TDS LIABILITY COULD NOT BE MORE THAN RATE PRESCRIBED UN DER DTAA OR ACT WHICHEVER WAS LOWER . IN THESE CASES THE ISSUE WAS PERTAINING TO ASSESSMENT YEARS 2012-13 AND 2016-17. THE ASSESSEE WAS ENGAGED IN ACTIVITY OF BUSINESS PROCESS OUTSOURCING (BPO). DUR ING RELEVANT YEAR, ASSESSEE MADE PAYMENTS OF ROYALTIES AND FEES FOR TE CHNICAL SERVICES TO NON-RESIDENTS. ASSESSEE DEDUCTED TAX AT SOURCE AT R ATE OF 10 PER CENT AS PER PROVISIONS OF SECTION 115(A)(1)(B). ASSESSING O FFICER WHILE ISSUING INTIMATION UNDER SECTION 200A, COMPUTED TAX LIABILI TY AT RATE OF 20 PER CENT, AS PROVIDED UNDER SECTION 206AA. IT WAS HELD THAT S INCE THERE WAS NO DISPUTE THAT BENEFIT OF DTAA WAS AVAILABLE TO NON-R ESIDENT RECIPIENTS, TAX LIABILITY OF RECIPIENTS COULD NOT BE MORE THAN RATE PRESCRIBED UNDER DTAA OR ACT WHICHEVER WAS LOWER . IT(IT)A NOS. 658 & 659/BANG/2020 & 152 TO 155/BANG/2021 PAGE 4 OF 6 6. THE ITAT BANGALORE IN THE CASE OF WIPRO LTD. V. INCOME TAX OFFICER (INTERNATIONAL TAXATION), WARD 1(3), BANGALORE [201 7] 88 TAXMANN.COM 435 HAS HELD THAT WHEN NON-RESIDENT IS ELIGIBLE FOR BEN EFIT OF DTAA ON SUM IN QUESTION, THERE IS NO SCOPE FOR DEDUCTION OF TAX AT SOURCE AT 20 PER CENT AS PROVIDED UNDER PROVISIONS OF SECTION 206AA. 7. THE ITAT HYDERABAD (SPECIAL BENCH) IN THE CASE O F NAGARJUNA FERTILIZERS & CHEMICALS LTD. V. ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-15 (1), HYDERABAD [2017] 78 TAXM ANN.COM 264 (HYDERABAD - TRIB.) (SB) HAS HELD THAT IF RATE OF TAX APPLICABLE UNDER DTAA IS LOWER THAN 20 PER CENT TAX RATE PRESCRIBED UNDER SECTION 206AA, TDS WOULD HAVE TO BE DEDUCTED AT SUCH LOWER RATE EVEN I F NON-RESIDENT DEDUCTEE FAILS TO FURNISH HIS PAN. 8. THE DECISION OF AUTHORITY FOR ADVANCE RULINGS, N EW DELHI IN THE CASE OF SOUTH WEST MINING LTD., IN RE AAR [2005] 148 TAXMAN 366 (AAR - NEW DELHI) - AAR NO. 660 OF 2005 - SEPTEMBER 9, 200 5 IS RELEVANT. IN THIS CASE IT WAS HELD THAT RATE OF TAX APPLICABLE F OR PURPOSE OF TDS WOULD BE LESSER OF RATES PRESCRIBED UNDER FINANCE ACT, 2005 OR IN PARA 2 OF ARTICLE 12 OF THE DTAA BETWEEN INDIA AND CANADA, THAT IS WHICH EVER IS MORE BENEFICIAL TO APPLICANT. 9. THE APPELLANT HAS ALSO SUBMITTED THAT RULE 37(B) (1) WAS INTRODUCED FROM 24.06.2016 AND AFTER THIS DATE THE DETAILS AS PROVIDED IN THE RULE AS FURNISHED BY THE APPELLANT. THERE IS NO NEED TO DED UCT TAX AT HIGHER RATES. THESE PROVISIONS ARE AS UNDER:- IT(IT)A NOS. 658 & 659/BANG/2020 & 152 TO 155/BANG/2021 PAGE 5 OF 6 [RELAXATION FROM DEDUCTION OF TAX AT HIGHER RATE UN DER SECTION 2O6AA. 37BC. (I) IN THE CASE OF A NON-RESIDENT, NOT BEING A COMPANY, OR A FOREIGN COMPANY (HEREAFTER REFERRED TO AS 'DEDUCTEE ') AND NOT HAVING PERMANENT ACCOUNT NUMBER THE PROVISIONS OF S ECTION 2O6AA SHALL NOT APPLY IN RESPECT OF PAYMENTS IN THE NATURE OF INTEREST, ROYALTY, FEES FOR TECHNICAL SERVICES AND PAYMENTS ON TRANSFER OF ANY CAPITAL ASSET, IF THE DEDUCTEE FURN ISHES THE DETAILS AND THE DOCUMENTS SPECIFIED IN SUB-RULE (2) TO THE DEDUCTOR. (2) THE DEDUCTEE REFERRED TO IN SUB-RULE (A), SHALL IN RESPECT OF PAYMENTS SPECIFIED THEREIN, FURNISH FOLLOWING DETAI LS AND DOCUMENTS TO THE DEDUCTOR, NAMELY:- (I) NAME, E-MAIL ID, CONTACT NUMBER; (II) ADDRESS IN THE COUNTRY OR SPECIFIED TERRITORY OUTSIDE INDIA OF WHICH THE DEDUCTEE IS A RESIDENT; (III) A CERTIFICATE OF HIS BEING RESIDENT IN ANY C OUNTRY OR SPECIFIED TERRITORY OUTSIDE INDIA FROM THE GOVERNMENT OF THAT COUNTRY OR SPECIFIED TERRITORY IF THE LAW OF THAT COUNTRY O R SPECIFIED TERRITORY PROVIDES FOR ISSUANCE OF SUCH CERTIFICATE ; (IV) TAX IDENTIFICATION NUMBER OF THE DEDUCTEE IN T HE COUNTRY OR SPECIFIED TERRITORY OF HIS RESIDENCE AND IN CASE NO SUCH NUMBER IS AVAILABLE, THEN A UNIQUE NUMBER ON THE BA SIS OF WHICH THE DEDUCTEE IS IDENTIFIED BY THE GOVERNMENT OF THAT COUNTRY OR THE SPECIFIED TERRITORY OF WHICH HE CLAI MS TO BE A RESIDENT.]. 10. IN VIEW OF THE S.90(2) AND FOLLOWING THE ABOVE JUDICIAL RULINGS AND ON ACCOUNT OF RULE 37(B)(1) W.E.F 24.06.2016, WHEREIN HELD THAT THE RATE PRESCRIBED UNDER DTAA OR ACT WHICHEVER WAS LOWER I S APPLICABLE, 11. BEING SO, THE CIT(APPEALS) HAS TAKEN THE CORREC T VIEW IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND DECIDE THE ISSUE IN FAVOUR OF ASSESSEE. IT(IT)A NOS. 658 & 659/BANG/2020 & 152 TO 155/BANG/2021 PAGE 6 OF 6 WE DO NOT FIND ANY INFIRMITY IN THE ORDERS OF CIT(A PPEALS). THE SAME IS CONFIRMED. 12. IN THE RESULT, ALL THE APPEALS BY THE REVENUE A RE DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS 24 TH DAY OF JUNE, 2021. SD/- SD/- ( BEENA PILLAI ) ( CHANDRA POOJARI ) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 24 TH JUNE, 2021. / DESAI S MURTHY / COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. BY ORDER ASSISTANT REGISTRAR ITAT, BANGALORE.
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