The affix chaṇ comes in the sense of a descendant after the word pitṛṣvasṛ,
This debars अण् ॥ Thus पितृष्वसृ + छण् = पैतृष्वस्रीयः 'the son of the father's sister'. The छ of the affix is replaced by ईय ॥,
पितृष्वसुश् छण्
Adhyāya 4 · Pāda 1 · Rule 132