These appeals are filed by assessee against separate orders both dt. 30th Aug., 2002 of CIT(A) for asst. yrs. 1997-98 and 1998-99. Ground raised common to both appeals is as under: "The CIT(A) erred in law and on facts in upholding action of Jt. CIT thereby rejecting appellant s claim for benefit of non-discrimination clause of Indo-Korea Double Taxation Avoidance Agreement ("the DTAA") and taxing appellant s income at rate of 48 per cent instead of 35 per cent." At time of hearing, learned counsel for assessee fairly conceded that only issue in both appeals is covered against assessee by decision dt. 25th Nov., 2005 of Tribunal D Bench in ITA No. 4948/Mum/2005 for asst. yr. 2002-03 in assessee s own case. However, he submitted that there have been several developments on interpretation of non-discrimination article of DTAAs signed by India and to override favourable rulings given by judiciary, legislature has amended provisions of Act twice in recent past. counsel submitted that in aforesaid decision in assessee s own case for asst. yr. 2002-03 (supra) reasons given for non-granting of benefit of arts. 25(1) and 25(2) are as under: Article 25(1): assessee bank and Indian banks cannot be said to be functioning under same circumstances. area of operation of Explanation and art. 25(1) are in different field. provisions of Finance Act prevail over provisions of DTAA. Indian banks are required to promote certain social and economical objectives. Non-discrimination article of India-UK DTAA specifically permits discrimination. Article 25(2): Levy of tax at higher rate cannot be construed as "less favourable". activities of appellant and Indian banks are not same. Co-operative societies are engaged in social engagement, etc. and should be considered as privileged public body. counsel further submitted that he does not wish to rely on provisions of art. 25(1). However, it is submitted that order of Hon ble Mumbai Tribunal (ITA No. 4948/Mumbai/2005) does not take into consideration order of Hon ble Calcutta Tribunal ABN Amro Bank (ITA No. 692/Cal/2000). This is because Calcutta Tribunal has specifically held that provisions of DTAA override provisions of Finance Act. Further, even argument of social obligations is not accepted by Calcutta Tribunal. Subsequently provisions of s. 90 are amended by virtue of Explanation. insertion of this Explanation indicates that legislature has accepted fact that without such Explanation foreign companies are entitled to benefit of non-discrimination article of respective DTAA. Even CBDT had clarified same position in form of letter in case of ABN Amro Bank. Thus, he submitted that following arguments do not hold good after amendment of s. 90: (a) Higher rate of tax on foreign companies does not result in discrimination. (b) non-discrimination article ( taxation ) does not apply to rate of tax . (c) provisions of Finance Act prevail over DTAAs. (d) Indian banks have social obligations and hence foreign banks and Indian banks cannot be said to be engaged in same activities . It was submitted that in subsequent decision of ABN Amro Bank NV vs. Jt. CIT (2005) 96 TTJ (Kol)(TM) 1041: (2005) 4 SOT 643 (Kol)(TM), Kolkata Tribunal has specifically observed that Explanation to s. 90 has been inserted with intention of overriding provisions of non-discrimination of DTAAs. If based on aforesaid arguments read with provisions of s. 90, Finance Act and DTAA if it was possible to levy tax at higher rate on foreign companies then there was no need to amend s. 90. As regards comparison with provisions of other DTAAs, he invited our attention to decision of Supreme Court in case of Union of India vs. Azadi Bachao Andolan (2003) 184 CTR (SC) 450: (2003) 263 ITR 706 (SC). In this case availability of provisions of DTAA between India-Mauritius w s disputed. Supreme Court compared provisions of DTAA between India-USA and India-Mauritius. India-USA DTAA contained specific provision (limitation of benefit) which provided that benefit on India-USA DTAA would not be available under certain circumstances. However, such provisions do not appear in India-Mauritius DTAA. Supreme Court held that in absence of provisions similar to those contained in India-USA DTAA, benefit of India-Mauritius DTAA cannot be denied. It was further submitted that in context of discrimination on account of rate of tax, it is submitted that DTAA signed by India with certain countries such as UK, Germany, Bulgaria, Canada, etc. specifically permit taxation of PE at rate higher than rate applicable to domestic companies. However, DATA between India and Korea does not contain such specific provision. He relied on provisions of relevant para of articles are as under: India-UK "2. taxation on PE which enterprise of Contracting State has in other Contracting State shall not be less favourably levied in that other State than taxation levied on enterprises of that other State carrying on same activities in same circumstances or under same conditions. This provision shall not be construed as preventing Contracting State from charging profits of PE which enterprise of other Contracting State has in first-mentioned State at rate of tax which is higher than that imposed on profits of similar enterprise of first-mentioned Contracting State, nor as being in conflict with provisions of para 4 of art. 7 of this Convention." India-Korea "2. taxation on PE which enterprise of Contracting State has in other Contracting State shall not be less favourably levied in that other State than taxation levied on enterprises of that other State carrying on same activities. This provision shall not be constituted as obliging Contracting State to grant to residents of other Contracting State any personal allowances, reliefs and reductions for taxation purposes on account of civil status or family responsibilities which it grants to its own residents." It is submitted that DTAA containing difference between aforesaid provisions is obvious and both cannot have same interpretation. Thus art. 26(2) of India UK DTAA specifically permits India to levy tax at higher rate on Indian PE of UK company as compared to tax rates applicable to Indian enterprise. However, art. 25(2) of India-Korea DTAA does not permit India to levy tax at higher rate on Indian PE of Korean company as compared to tax rates applicable to Indian enterprise. With regard to reliance on art. 25(2), counsel placed reliance on provisions of art. 25(2) of DTAA. In terms of art. 25(2) taxation of Indian PE of Korean enterprise "shall not be less favourably levied in that other State (India) than taxation levied on enterprises of that other State (India) carrying on same activities". aforesaid provision restricts discrimination as compared to enterprise of India. enterprise in simple terms is business unit. Thus enterprise could be Indian company or Indian co-operative society . counsel submitted that it is discriminated as compared to Indian co-operative society carrying on banking activities. appellant further submits that Hon ble Supreme Court has in case of Madhya Pradesh Co-op. Bank vs. Addl. CIT (1996) 134 CTR (SC) 92: (1996) 218 ITR 438 (SC) held that even co-operative banks are engaged in banking business like any other banking company. Calcutta Tribunal has in case of ABN Amro Bank (ITA No. 692/Cal/2000) upheld this interpretation. He further relied on scope of Explanation to s. 90 as under: "Explanation For removal of doubts it is hereby declared that charge of tax in respect of foreign company at rate higher than rate at which domestic company is chargeable, shall not be regarded as less favourable charge or levy of tax in respect of such foreign company. aforesaid Explanation provides that if foreign company is required to pay tax at rate higher than rate applicable to domestic company then same is not to be considered as less favourable charge . Explanation uses term domestic company and accordingly it is obvious that scope of Explanation restricted to comparison with domestic company . term domestic company is defined under s. 2(22A) of Act. co-operative society cannot be said to be domestic company ." It was submitted that in terms of provisions of art. 25(2) of DTAA between India and Korea, India cannot levy tax on Indian PE of Korean enterprise at rate higher than rate applicable to: (a) Indian company, (b) Indian co-operative society. Further, Explanation to s. 90 provides that if foreign company (PE) is charged tax at rate higher than domestic company then same is not to be considered as less favourable charge for foreign company. However, Explanation does not provide that if foreign company (PE) is charged tax at rate higher than rate applicable to co-operative society then same is not to be considered as less favourable charge for foreign company. In absence of any specific provision in Explanation in this regard, if Indian PE of foreign company is made liable to pay tax at rate higher than rate applicable to co-operative society engaged in same activities, then same amounts to less favourable charge for foreign company. In such circumstances provisions of DTAA override provisions of domestic law and foreign company is entitled to claim benefit of non- discrimination article. He further narrated social obligations of co-operative society and benefits as privileged public body. Based on decision of Supreme Court in case of Madhya Pradesh Co-operative Bank (supra) read with decision of Calcutta Tribunal in case of ABN Amro Bank (ITA No. 692/Cal/2000) it is submitted that foreign bank and co-operative bank can be said to be engaged in same activity, i.e., banking. Further, subsequent to amendment of s. 90 it may not be correct to take same social obligations argument as amendment of s. 90 indicates that it was not acceptable argument. As regards special benefits available to co-operative society as privileged public body engaged in fulfilment of social obligations, appellant submits that it does not wish to claim same benefits. co-operative society was subject to tax at maximum rate of 35 per cent for asst. yr. 1997-98. Further, in terms of provisions of s. 80P income earned by co-operative society from banking business is deductible from taxable income and not chargeable to tax. appellant submits that tax benefit available to co- operative society in terms of provisions of s. 80P should be considered as special benefit for fulfilling social obligations, etc. appellant does not wish to claim benefit of s. 80P. appellant merely claims tax rate applicable to co-operative society on its income without any specific tax exemptions i.e., rate of 35 per cent. On other hand, learned Departmental Representative contended that only issue involved in both appeals is squarely covered against assessee in assessee s own case (supra). Therefore, following said decision of co-ordinate Bench, appeals filed by assessee be dismissed. learned Departmental Representative further submitted that assessee is not co-operative society, therefore, reliance placed by assessee is misplaced. benefit available to co-operative society cannot be extended to bank based in Korea. We have heard both sides and carefully gone through orders of authorities below. facts of assessee s case are identical with that in asst. yr. 2002-03, wherein, Tribunal vide order dt. 25th Nov., 2005 in ITA No. 4948/Mum/2005 (supra) held that Explanation to s. 90(2) introduced by Finance Act, 2001 with retrospective effect from 1st April, 1962 is integral part of section, which clearly laid down that charging of foreign company at of section, which clearly laid down that charging of foreign company at higher rate will not be regarded as less favourable as compared to domestic company. In view of this, in our opinion, no comparison of tax rate/treatment given to co-operative society in India can be given to foreign company. incentive given to co-operative bank/society cannot be extended to foreign bank. We, therefore, following decision of co-ordinate Bench in assessee s own case for asst. yr. 2002-03 (supra), we dismiss appeals of assessee. In result, both appeals are dismissed. *** CHOHUNG BANK v. DEPUTY COMMISSIONER OF INCOME TAX