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2014 (8) TMI 716 - ITAT AHMEDABADAssessee in default u/s 201(1) – Short collection of TCS amount - Submission of Form No. 27C mandatory requirement or not – Applicability of section 206C – Consignment dispatches results in stock transfer or not – Held that:- The assessee is not legally obliged to collect the TCS from a buyer who furnishes a declaration to the assessee to the effect that the purchases made by such buyer are to be utilized for the purposes of manufacturing, processing or producing articles or things or for purposes or generation of power and not for trading purposes - in a case where such a declaration is furnished by the buyer to the seller, the seller is not obliged to collect TCS from such buyer and consequently the seller assessee cannot be treated as an assessee in default in respect of not collecting TCS from such buyer – CIT(A) upheld the treatment of assessee as assessee in default in respect of those parties from whom the assessee already received declaration in Form 27C on the ground that such declaration was not furnished by the assessee to the Chief Commissioner or Commissioner as required by the provisions of section 206C(1B) of the Act. Once the declaration referred to in section 206C(1A) was received by the assessee, then thereafter the assessee could not legally collect the TCS from such buyers and consequently the assessee cannot be treated as an assessee in default for not collecting TCS from such buyers –Relying upon CIT Vs. Valibhai Khanbhai Mankad [2012 (12) TMI 413 - GUJARAT HIGH COURT] - the assessee cannot be treated as assessee in default for not collecting TCS from such buyers from whom the assessee received declaration as per provisions of section 206C(1A) of the Act - The assessee has not filed copy of declaration received by it u/s. 206C (1A) of the Act before the AO for his verification – thus, the matter is to be remitted back to the AO for proper verification - the auditor’s certificate which has been furnished was not furnished before the lower authorities and it could not be verified by them – Decided in favour of Assessee.
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