2018 (8) TMI 728 - HC - Income Tax

Scope of the person u/s 2(31) - Collection of Tax (TCS) on Tahbazari u/s 206C(1C) - Whether the term Parking Lot , Toll Plaza , Mining and quarrying include Tahbazari - Whether the Apar Mukhya Adhikari, Zila Panchayat was responsible for collecting the tax at source under Section 206C(1C) of Income Tax Act - Held that - The Tahbazari is not an item which is provided under this Section for collecting TCS. If a licence or lease is issued in favour of any other person for collecting the Tahbazari, it cannot be said that lessee is collecting toll on such licence or lease, as the case may be. We are required to construe the taxing provisions strictly and cannot give liberal interpretation to a taxing provision. The Tahbazari has different connotation and it is not a toll as held by the Tribunal. We do not agree with the view taken by the Tribunal that Tahbazari is nothing but a toll or it is not different from Toll Plaza. - Decided in favor of assessee.

Summary

Issues:
Interpretation of Section 206C(1C) of the Income Tax Act, 1961 regarding the inclusion of "Tahbazari" within its ambit and the responsibility of Apar Mukhya Adhikari, Zila Panchayat for tax collection at source.

Analysis:
1. The appellant, Apar Mukhya Adhikari, Zila Panchayat, challenged an order by the Income Tax Appellate Tribunal concerning the Assessment Years 2010-11, 2011-12, and 2012-13 under Section 260A of the Income Tax Act, 1961. The key questions raised included the classification of "Tahbazari" under Section 206C(1C) and the responsibility of the Apar Mukhya Adhikari for tax collection under this provision.

2. The appellant, as per the policy formulated, auctioned Tahbazari, Tahbazari-Vahan Stand, and Balu-Morang, Gitti Bolder-Vahan Shulk to regulate its functions. The Assessing Officer conducted a survey and identified different auctions conducted by the Zila Panchayat for these activities.

3. The Assessing Officer contended that the amounts collected by the Zila Panchayat fell within the scope of Tax Collected at Source (TCS) under Section 206C(1C) of the Act. The calculations showed discrepancies in the amount collected and interest due for various fiscal years.

4. The Court analyzed Section 206C(1C) which mandates tax collection for granting leases or licenses for parking lots, toll plazas, mines, or quarries. The Court emphasized the strict interpretation of taxing provisions and concluded that Tahbazari does not fall under the purview of TCS as it is not akin to toll collection.

5. The Court disagreed with the Tribunal's view equating Tahbazari with a toll plaza, stating that Tahbazari has a distinct meaning and cannot be considered a toll. Consequently, the Court set aside the Tribunal's order and ruled in favor of the appellant-assessee, answering the questions raised in the appeal against the Revenue.

In conclusion, the judgment clarified the interpretation of Section 206C(1C) regarding Tahbazari and the tax collection responsibility of the Apar Mukhya Adhikari, Zila Panchayat, providing a detailed analysis and resolving the issues in favor of the appellant-assessee.