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ITA No. 211 of 2021 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 29TH DAY OF NOVEMBER, 2022 PRESENT THE HON'BLE MR JUSTICE P.S.DINESH KUMAR AND THE HON'BLE MR JUSTICE T G SHIVASHANKARE GOWDA INCOME TAX APPEAL NO.211 OF 2021 BETWEEN: 1. THE COMMISSIONER OF INCOME-TAX INTERNATIONAL TAXATION, 4TH FLOOR, BMTC BUILDING, 80 FEET ROAD, KORMANGALA, BENGALURU-560 095. 2. THE DEPUTY COMMISSIONER OF INCOME TAX INTERNATIONAL TAXATION, CIRCLE-1(2) 4TH FLOOR, BMTC BUILDING, 80 FEET ROAD, KORMANGALA, BENGALURU - 560 095. … APPELLANTS (BY SRI. ARAVIND K.V., ADVOCATE) AND: 1. M/S MANTRI TECHNOLOGY CONSTELLATIONS PVT LTD MANTRI HOUSE, 41, VITTAL MALLYA ROAD, BANGALURU - 560 001 PAN: AAFCM 1653 D … RESPONDENT (RESPONDENT - SERVED) Digitally signed by VIJAYA P Location: High Court of Karnataka
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ITA No. 211 of 2021 THIS INCOME TAX APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 24/08/2020 PASSED IN IT(IT)A NO.130/BANG/2018, DATED 24.08.2020 FOR THE ASSESSMENT YEAR 2014-2015 ANNEXURE C, PRAYING TO: 1. FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW
STATED ABOVE; 2. ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY
THE INCOME TAX APPELLATE TRIBUNAL, BENGALURU IN
IT(IT)A NO. 130/BANG/2018 DATED 24/08/2020 FOR
ASSESSMENT YEAR 2014-2015 ANNEXURE-C AND CONFIRM
THE ORDER OF THE APPELLATE COMMISSIONER CONFIRMING
THE ORDER PASSED BY THE DEPUTY COMMISSIONER OF
INCOME TAX, INTERNATIONAL TAXATION, CIRCLE-1(2),
BENGALURU. 3. TO PASS SUCH OTHER SUITABLE ORDERS AS THIS HON'BLE
COURT DEEMS FIT TO GRANT IN THE FACTS AND
CIRCUMSTANCES OF THE CASE IN THE INTEREST OF JUSTICE
AND EQUITY.
THIS APPEAL, COMING ON FOR HEARING, THIS DAY, P.S. DINESH KUMAR J., DELIVERED THE FOLLOWING:
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ITA No. 211 of 2021 JUDGMENT This appeal by the Revenue, challenging the order dated 24.08.2020 in IT(ITA) No.130/Bang/2018 (Assessment /year 2014-15) by the ITAT has been admitted to consider the following questions of law. "Whether on the facts and in the circumstances of the case, the Tribunal is right in law in remanding the matter back to the file of first appellate authority by directing the said authority to consider whether TDS is required to be made by assessee in respect of payments made to non- resident entities and if found to be made then rate of TDS has to be rate prescribed under DTAA or Act whichever is lower even though as per Section 195 or Section 206AA nor under Section 90(2) of the Act do not contemplate such restriction? Whether on the facts and circumstances of the case and in law, the Tribunal is justified in holding that the DTAA overrides the provisions of Section 206AA of the Act without appreciating that Section 90(2) of the Act, which confers the right to choose tax rates between Income Tax Act and
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ITA No. 211 of 2021 DTAA is over ridden by provisions of Section 206AA of the Act?"
Shri. K.V. Aravind, learned Standing Counsel for the Revenue submits that the issue involved in this appeal is similar to one in I.T.A.No.181/2019 and connected matters, in which this Court has held that, where there exists Double Taxation Avoidance Agreement, the Tax Deductible at Source shall not exceed 10%.
Accordingly, for the reasons stated in I.T.A.No.181/2019 and connected matters, this appeal also fails and it is dismissed. The question of law is answered in favour of the assessee and against the revenue.
No costs. Sd/- JUDGE Sd/- JUDGE VP